Federal police arrest ex-Rio de Janeiro Governor Sérgio Cabral on corruption charges

On 17 November 2016, Brazilian federal police arrested the former Governor of the State of Rio de Janeiro, Sérgio Cabral (PMDB) (Folha de S. Paulo, Globo G1). As a part of Operação Calicute, an operation occurring in concurrence with the Operação Lava Jato investigating corruption at Petrobras, investigators are attempting to account for US$64 million embezzled from state government projects during terms. Among the projects being investigated is the renovation of Maracanã for the 2014 World Cup. The Federal Public Ministry of Rio, involved in the investigation, suspects Cabral of masterminding corruption, money laundering, and cartelization, in addition to receiving over US$800,000 from construction firms, such as Andrade Gutierrez, during his tenure as Governor. The State of Rio de Janeiro, currently undergoing a fiscal crisis, had ~US$50 million blocked by the federal government for failing to pay interest charges. Cabral is currently being held in Bangu prison outside of the city of Rio.

Brazilian federal government freezes accounts of state of Rio de Janeiro

The Federal Government froze the State of Rio de Janeiro's accounts on 7 November 2016 because it has failed to make a US$53 million interest payment to BNDES (Valor, Globo G1). The freeze means the state will be unable to pay its providers until it pays the debt. The State Finance Secretary confirmed the freeze and said it will not interfere with this payment. The government expects the account to become unblocked in three business days. The announcement of the freeze came after Governor Luiz Fernando Pezão announced a group of austerity measures on 4 November 2016, which he insists is necessary for the state to have the liquidity to pay salaries in 2017.