Brazilian Federal Police have carried out 13 searches as part of an investigation into suspected fraud in emergency contracts for pumps used after the 2024 floods in Rio Grande do Sul.
The inquiry concerns equipment rented to remove floodwater from neighbourhoods in Canoas and Cachoeirinha, two cities in the metropolitan area of Porto Alegre. Investigators allege that some services in Canoas were charged at between nine and ten times their actual cost.
More than R$10 million in financial assets was blocked and three vehicles were seized during the operation on Friday 13 November. The searches were authorised by a federal court in Porto Alegre. The asset freeze does not mean a court has found that the money was obtained unlawfully.
Emergency contracts under scrutiny
The contracts were funded with federal money intended to support the response to the 2024 disaster. Police are examining the hiring and operation of motor pumps used to drain water from affected neighbourhoods.
Investigators allege that a company without the capacity needed to perform the work was favoured in the contracting process. They say it then subcontracted specialist firms to provide the services for less than the amount charged to the public authorities.
In Canoas, the inquiry compares measurements submitted to the municipality with contracts held by the companies that actually supplied and operated the equipment. Investigators estimate that at least R$7 million in overpricing has been documented there. The nine-to-ten-times comparison relates to particular services, rather than every item in the contracts.
In Cachoeirinha, the work being examined ran from 13 May to 13 June 2024 and involved two transfer pumps, assisted operation and associated equipment. Investigators also allege that some quotations were prepared or signed after work had begun, and in some cases after it had finished.
The inquiry has identified cash withdrawals and transfers to individuals and businesses with no apparent connection to the operation of the pumps. Those transactions form part of what investigators are examining; their presence does not establish that any recipient committed an offence.
Councils respond
Both municipalities say the contracts under investigation relate to their previous administrations and have offered to cooperate with the authorities. Cachoeirinha says no search took place at the premises of its municipal executive.
Canoas has dismissed a senior official who was finance secretary at the time of the contracts. The council has also ordered the preservation of physical and digital records connected to the pump agreements, prohibiting their destruction, disposal or alteration while its review continues.
Its internal review is to identify the contracts and procedures involved, the departments responsible for procurement, delivery and payment, and any earlier audits or control measures. The municipal transparency and control department has been asked to provide a preliminary report within five working days. The council says identifying a member of staff in a procedure does not in itself assign responsibility.
A former mayor of Cachoeirinha says his administration opened internal inquiries into the matter and referred cases to prosecutors. He has suggested the current investigation might follow from those steps, but that connection has not been established.
Flood response
The pump contracts arose during a disaster that affected communities across southern Brazil. By August 2025, 185 deaths had been confirmed from the May 2024 floods in Rio Grande do Sul, with more than 2.3 million people affected across 478 municipalities.
In Canoas, the flooding forced many residents from their homes. The municipal authorities managed 55 shelter locations, while more than 80 spaces across the city were used to accommodate people seeking refuge.
Federal Police have listed a range of possible offences that could be considered as the inquiry continues, including contracting fraud, corruption and money laundering. Those are potential lines of investigation, not convictions. The searches, seizure and asset freeze do not establish criminal responsibility, and the allegations remain unproven.
