* State prosecutor alleges bribes for construction permits
* Brookfield denies accusations, opens internal review
* Group has operated in Brazil since late 19th century
By Brad Haynes
SAO PAULO, Feb 5 A Brazilian prosecutor filed
charges on Tuesday against a unit of Canada's Brookfield Asset
Management Inc. alleging the subsidiary paid bribes to
obtain permits needed to expand a Sao Paulo shopping center.
Brookfield Brasil Shopping Centers, a property-management
company, allegedly paid 1.3 million reais ($656,000) to a city
representative and chief inspector who approved construction at
the Shopping Patio Paulista, according to civil charges filed by
state prosecutor Marcelo Camargo Milani.
"There are a series of documents showing that reforms had
been paralyzed for two years and then permits appeared within
four days of the payments," Milani said in an interview. He said
damages in the suit could start around 30 million reais and
climb to more than 20 times that.
Reports of corruption in the licensing of Shopping Patio
Paulista and other malls have circulated in the Brazilian press
for months. Milani said his case was the first of many that
could be brought against Brookfield, including criminal charges
against its executives.
A spokeswoman for the property management company said
Brookfield had not been informed of any charges against it.
"Brookfield vehemently denies participating in any bribery
scheme and is adopting the necessary measures to defend itself,"
the company said in a written statement.
Brookfield is the successor company of a Canadian-based
group that has operated in Brazil for more than a century.
If a judge agrees to hear the case, the suit against
Brookfield could take years for a final decision. Milani said he
expected a preliminary order within two weeks freezing
Brookfield's assets and granting access to its banking records.
Milani has not been granted such a ruling in other
high-profile cases he brought against Sao Paulo's mayor and top
police officials over the past year.
A spokesman for Brookfield Asset Management, which manages
about $13 billion in assets in Brazil, said the allegations
against the local property management company came from an
employee who was fired in 2010 and then sued by the company for
"Brookfield takes the allegations that have been made very
seriously and is cooperating fully with Brazilian authorities,"
said spokesman Andrew Willis in Toronto in an email.
The company is conducting an internal review with input from
an outside legal counsel, Willis said, and the investigation has
not yet revealed evidence of wrongdoing.
Starting in 1899, Brookfield, formerly known as
Brazilian-Canadian Traction and Brascan, built some of the
Brazil's first hydroelectric dams, helped electrify Rio de
Janeiro and Sao Paulo and built street-car and telephone
The Brazilian word "bonde" for streetcar or cable-car comes
from the bonds the company sold to finance the systems.
After public-utility nationalizations in the 1960s and
1970s, the group transferred its main Brazilian investments into
property and developed some of the country's first modern
suburban shopping centers.