The Rio de Janeiro you see advertised in videos promoting the Olympics is the iconic one everyone knows: Ipanema, Sugarloaf Mountain, the statue of Christ the Redeemer. But that’s just a tiny slice of this sprawling metropolis of 12 million people, most of whom live miles from the beach. You can see the other Rio, their Rio, as you drive into town from the international airport, past the walls enclosing the freeway: a sea of red cinderblock shacks stacked precariously atop one another, with narrow roads snaking in between. One in seven Rio residents make their home in so-called favelas like these.
When Brazil won the right to hold this year’s Summer Games back in 2009, it seemed ready to vault into the club of developed nations. Luiz Inácio Lula da Silva, then the country’s wildly popular president, pitched the Olympics as an opportunity to develop Rio’s infrastructure, and remake the city into a new world capital. But this was also a rare moment of Brazilian self-confidence—one ultimately undone by hubris.
Seven years later, Lula’s Olympic dream seems a distant memory. Despite an ambitious government campaign to pacify Rio favelas ruled by violent drug gangs, since last year homicides are on the rise. With sewage lines still lacking, world-class rowers and sailors will compete in waterways tainted by drug-resistant bacteria. Meanwhile, amid Brazil’s deepest recession in decades, Rio’s governor declared a “state of public calamity” last month because—thanks in part to the Olympics—his administration had run out of money to pay for public security and healthcare. Cops and firemen have taken to camping out at the international airport, holding banners that read “Welcome to Hell.”
Not everyone, however, has emerged a loser. Contracts for everything from stadium and train-line construction to port renovations have funneled billions of dollars in taxpayer-subsidized revenues to a handful of Brazil’s most powerful, well-connected families and their companies. This disconnect—between populist promise and the uneven benefits that followed—is emblematic of the failed Olympic ambition to remake Rio, and a slew of questionable priorities that have brought Brazil to its knees.
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Rio Mayor Eduardo Paes has been the upcoming Olympics’s most vocal champion. He is a contradictory figure. He strives for a modern image, often speaking at events held by global nonprofits like the Clinton Foundation. But he also belongs to the Brazilian Democratic Movement Party, which represents the country’s old establishment. The son of a high-profile lawyer, he hails from Rio’s elite.
In 2012, Paes laid out an Olympic plan that would bring vital infrastructure and public services to all of Rio’s roughly 1,000 favelas. “The city of the future,” he declared in a TED talk that year, “has to be socially integrated.” The idea was to bridge the gap between rich and poor in the divided city, where favelas did not even appear on official maps until several decades ago.
Some projects associated with the Summer Games, such as new express bus lines, will undoubtedly improve life for working-class Rio residents—cariocas—who often face five-hour round-trip commutes each day. But not long after his TED talk, Paes drastically scaled back his plan to “urbanize” the favelas, blaming a shortfall of federal money. Instead, most of the government’s Olympic budget has been poured into the wealthy suburb of Barra da Tijuca, home to only 300,000 people.
At a total cost of $12 billion, the Rio Olympics are among the priciest in history. In marketing this number to the citizens of Rio, Paes insists that most of the money was put up by private investors. Outside researchers, however, point out that his calculations often leave out subsidies in the form of tax breaks, government loans, and land transfers. The state is fronting almost the entire cost of the single-most expensive Olympic project: a $3-billion subway extension linking Barra to the chic beach neighborhoods of Leblon and Ipanema. All the new express bus lines lead to Barra, too.
This flood of public money is benefiting the coterie of men who own most of Barra’s land. One of them, a 92-year-old billionaire named Carlos Carvalho, controls some 65 million square feet of property in the area. His most famous project for the Olympics is the so-called Athletes’ Village. After the games are over, all 31 of the Village’s 17-story towers will be transformed into luxury condos featuring multiple swimming pools, tropical gardens, and an unobstructed view of Jacarepaguá Lake. It makes for a glaring contrast with London, where athlete accommodations were largely converted into affordable housing after the 2012 Summer Games.
Carvalho is less tactful than Paes. In an interview with The Guardian last year, he spoke of his dream to turn Barra into “a city of the elite, of good taste.” This is why he dubbed the Athletes’ Village development Ilha Pura, or pure island. “It needed to be noble housing,” Carvalho said, “not housing for the poor.” On social media, some Brazilians expressed disgust at what they saw as Carvalho’s brazen elitism. The reaction was so inflamed that Paes felt he had to publicly disavow Carvalho’s words. (Paes and Carvalho both declined to comment for this article.)
While Carvalho’s comments caused a furor, they seemed to reflect the aspirations of his customers. Starting in the 1970s, affluent cariocas began fleeing to Barra from the neighborhoods of Ipanema and Copacabana, where fancy homes owned by highly paid professionals and business owners rub up against hills blanketed by favelas. Today, Barra resembles the sleekest parts of Miami far more than the classic images of sultry Rio. Hardly anyone walks, unless they’re maids or doormen. Gated condo complexes of shining glass and pastel cement dot the wide avenues.
But why should Carvalho’s plans for Ilha Pura matter to the taxpayer? After all, Paes says the nearly one-billion-dollar project was built entirely with private money. As part of Carvalho’s deal with the city to build Ilha Pura, however, he secured a low-interest government loan and permission to build several stories higher than the limit for neighboring developments. Carvalho is also a partner in construction of the nearby Olympic Park, a sprawling spit of concrete sprinkled with a billion dollars’ worth of sporting facilities. Here, the city handed over lakeside land that Carvalho is expected to develop into a whole new neighborhood, once the economy rebounds and demand picks up again.
As scarce as resources are in Brazil, such subsidies are common for well-connected businessmen. But they are no guarantee of quality. For Olympic athletes arriving this month, Carvalho delivered apartments with blocked toilets, leaky pipes, and exposed wiring.
Of all the contradictions between Olympic vision and reality, perhaps the most glaring is in Carvalho’s choice of partners, the construction firms Odebrecht and Andrade Gutierrez. These companies are at the center of the multibillion-dollar corruption scandal that has plunged Brazil into political chaos, and investigators now believe they skimmed bribes from Olympic projects, too. Both companies are cooperating with investigators. As recently as May, Paes surreally claimed the Olympics were free of corruption, even though his own party is deeply implicated in the wide-ranging bribery scheme.
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Beyond the economic concerns surrounding the projects of the Summer Games, there is the substantial human cost. Under Paes, more than 20,000 families have been evicted from their homes. It’s the most extensive favela removal drive in Rio’s history—and a far cry from the mayor’s declared goal of social integration.
Wedged between the Olympic Park and the Athletes’ Village is a favela called Vila Autódromo, which was slated for demolition in 2010 to make way for access roads. Many of Vila Autódromo’s residents, like Márcio Moza, a cable-company employee who lived there for eight years, refused to leave. Though he lacked the legal title held by older residents, he told me, “I built that house with my own sweat.” He showed me a smartphone video he shot earlier this year, in which Rio police manhandled him when he tried to approach his home as bulldozers worked next door. His wife was nearly nine months pregnant at the time. He resisted as long as he could, but ultimately gave in and moved his family out after the birth of his youngest child, for fear of how the constant commotion might affect her.
Like many of his former neighbors, Moza now lives in a low-income housing project less than a mile from Vila Autódromo. Thanks in part to attention from the international press, others negotiated sizeable indemnities and bought homes elsewhere. Of the nearly 600 families who once lived there, Paes allowed some 20 of them to stay, even agreeing to build new houses for them. But such concessions are rare. In evictions across Rio, residents often received indemnities or rental assistance too meager to allow them to purchase housing anywhere near their communities. Others were transferred outright to projects 25 miles away. While some of the favelas were torn down for express bus corridors—an obvious public good—some were demolished to make room for stadium projects, whose benefit is decidedly hazier.
When it comes to Vila Autódromo, Moza believes that the Olympics were just a pretext for a real estate push. “Carvalho doesn’t want to live next to poor people,” he said. And Paes, meanwhile, “has wanted to get rid of Vila Autódromo for a long time.”
Paes himself once said in an interview that he has used the Olympics as an excuse to carry out unrelated projects. And he wants to turn Barra into a new center for international business, a legitimate goal. But it’s impossible to separate Paes’s plans for Barra from his ties to Barra’s developers. Carvalho was one of the top donors for Paes’s 2012 reelection campaign, officially contributing the equivalent of half a million dollars to him and his party’s local chapter. Renato Cosentino, a Ph.D. candidate at the Federal University of Rio de Janeiro researching the development of Barra, calls Paes “a political project of these local businessmen.”
Paes’s roots in Barra run deep. He got his start there in 1993, when he was named the area’s subprefeito, a position similar to that of borough president in New York City. Only 23 then, Paes dubbed himself the “sheriff of Barra” and announced a war on “invasions”—a derogatory term for favelas, and one that gives short shrift to the squatters’ rights enshrined in Brazil’s constitution. Paes first attempted to remove Vila Autódromo in those years. Amid tensions between residents and city officials, one community leader died after being shot in the face twice. Another favela leader accused Paes of complicity in the crime, an allegation he denied vehemently. The hit men were never identified.
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Rio is a violent city. Killings by police, paramilitaries, and drug gangs occur virtually every day. But much of the Olympics will take place on land whose very ownership is entangled in a history of violence. According to an official intelligence report from 1979 provided by the lawyer and activist Jean Carlos Novaes, the real-estate tycoons of Barra staked a claim to the area by kicking out poor families who possessed legal rights to their homes. Across Brazil, property is established as much through force and possession as through official documents, falsified so frequently that there is a slang word for the practice: grilagem. The word comes from grilo—grasshopper—because if you put grasshoppers in a drawer with your fake land title, their excrement will make it appear convincingly aged.
Rio’s new Olympic golf course was built on such contested land. Paulo Ramos, a state assemblyman from the opposition Socialism and Liberty Party, opened an official investigation into fraudulent titling in the Barra area. In a recent interview, he called Pasquale Mauro, the golf course’s official owner, “Brazil’s greatest grileiro.” Vast expanses of land, now occupied by Mauro and Carvalho, rightfully belong to the state, he alleged. When I asked why his investigation, which analyzed documents stretching back decades, produced no indictments, Ramos pointed out that the assemblyman who was appointed as rapporteur openly admitted to being a personal friend of Carvalho. “They forged a kind of legality and progressively consolidated it,” Ramos said. “It’s a massive con, carried out with complicity from the judiciary.”
In Brazil’s chummy business world, Mauro, 89, is that rare self-made man. But his penchant for testing the limits of the law is typical. He lives not far from the golf course on a sprawling ranch with five artificial lakes, where he raises buffalo and ostrich, and where, a few years ago, inspectors found workers laboring in allegedly slave-like conditions. (Mauro was fined for this, but never faced criminal charges.) He received me recently at his office, his shirt buttoned down far enough to reveal a tangle of white chest hair. A large gold watch hung loosely around one wrist. During our three-hour interview, he threw back three espressos and smoked one Dunhill after the other. At one point, a bee floated toward him, and he clapped it between his hands.
Mauro scoffed at the idea that his holdings could be illegitimate. Eager to prove his entrepreneurial bona fides, he explained how he had come to Rio from Italy at the age of eight, and started out reselling lottery tickets on the street. In his teens he worked as a middleman in the fish trade. By his 20th birthday, he owned several newsstands. After cornering the local banana market, he became known as the Banana King, he told me. He said he started buying land in Barra in the 1960s because he saw, long before anyone else, that the city would end up expanding in that direction.
When I asked Mauro how he wound up winning the contract to build the Olympic golf course, he said Paes had approached him. He had known the mayor—a “hard worker”—since his term as Barra’s subprefeito in the 1990s. He warmed to Paes’s idea, he claimed, because of his vision of a golf course open to the public, where underprivileged youngsters could learn the sport. “Anything I can do for my fellow man, I do,” Mauro said. “I’ve always tried to create things that the country needed. My whole life, I’ve tried to help.”
Only begrudgingly did Mauro concede that, since 2006, he had been trying to build a golf course in the Barra area to accompany a condo project. He had initially failed to obtain approval because much of the land, on the banks of Marapendi Lake, had been classified as an environmental protection area. With the Olympics’ impending arrival, the city council changed the area’s status in a lame-duck session at the end of 2012. Paes justified the decision by saying the area had already been “degraded” by a sand-mining operation. At the inauguration of the golf course, he stood triumphantly on the green. “Does this look like an environmental crime?” he asked. He neglected to mention that the operation had belonged to Mauro himself—one of the many businesses that the old tycoon had proudly listed off to me.
As is often the case in the mayor’s pronouncements, it’s hard to separate spin from fact. Rio already had two golf courses that could have been refurbished, but Paes said neither fit the requirements of the Olympic organizers. When he heard this, Thomas Bach, head of the International Olympic Committee, responded: “I’m a little surprised because as we all know, the mayor was pushing very much for this [new course] to happen.” While there is no official record of donations from Mauro to Paes, Mauro’s partner in the condo development adjacent to the golf course, a company known as Cyrela, gave around $300,000 to his reelection campaign in 2012.
Ironically, several top golfers have since decided not to compete in the Olympics. They’re worried about catching the Zika virus.
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Though Paes rejects the idea that the Olympics have disproportionately benefited the well-to-do, even he now admits that the games are a “missed opportunity” for Rio. But he alone can’t be blamed for the city’s problems, which are shared by cities across Brazil and reflect decades, if not centuries, of neglect for its poorest citizens. Eight years under a different mayor would not have fundamentally transformed a divided city, even if that mayor had managed to put an end to the give-and-take between campaign donors and public servants.
At this point, perhaps the best Olympic legacy that Brazilians can hope for is that the event will serve as a cautionary tale to future generations. Still, it’s worth asking: If Rio’s priorities had been different, what might the city look like today?