State-controlled Brazilian financial institution Banco do Brasil has suspended payments to the country’s national volleyball federation (CBV) after a government investigation reported that CBV directors failed to distribute $11.3m of sponsorship income to athletes between 2010 and 2013.
Banco do Brasil is the CBV’s main sponsor but has pledged not to restore funding until the organisation deals with the irregularities identified by auditors from Brazil’s Comptroller General’s Office (CGU).
The report pinpoints contracts that it claims directed sponsorship revenue towards friends and family of CBV officials, most notably implicating International Volleyball Federation (FIVB) president Ary Graca.
The period in question covers Graca’s previous role as CBV chief, when the CGU states that administration costs rose sharply while monies were not distributed to athletes.
“It was in exactly that context that the CBV hired companies [owned by] directors, ex-directors and their relatives,” the report said, as quoted by the Reuters news agency.
It said that administration costs went to two companies “that perhaps don’t even exist,” before adding, “The owners are sons-in-law of the confederation’s ex-president Ary Graca.
Banco do Brasil released a statement, which read: “Banco do Brasil reiterates that it would never agree with illegal practices that harm sports and the volleyball community.” The CBV and Graca are yet to offer a comment at this stage.
Volleyball represents a major medal target for Brazil when it hosts the 2016 Olympic Games in Rio de Janeiro. The men’s team has won gold or silver at the past three Olympics, while the women are two-time reigning champions.
In response the FIVB released a statement refuting the corruption claims: "It is important to point out that Ary Graca, and others accused, have rigorously and consistently denied any wrongdoing and have openly explained how, at all times, they acted in the best interests of Brazilian volleyball.
"The recent external auditing conducted by PWC and supported by independent legal experts, confirmed that all contracts questioned by media were legally binding and no evidence of any malpractice was found.
"Under Ary Graca’s leadership and through these legally contracted commercial services, Brazilain volleyball benefitted by R$350m (US$131m) for the period 2012-17 and several commercial relationships have continued successfully to this day, well after Ary Graca left the CBV. Furthermore under the presidency of Ary Graca, Brazil were World Champions three times, won three Olympic Gold Medals and won eight World League titles.
"As the president and others from the former CBV management team have mounted legal proceedings against the organisations and individuals for making false accusations, it is not appropriate for the FIVB to comment further on these matters until all investigations and legal action have been completed."