Brazil & Southern Cone - August 2026

Since taking over in March as interim governor of Brazil’s third most populous state, Rio de Janeiro, Ricardo Couto has sought to address alleged corruption that occurred during the administration of former governor Cláudio Castro (2021-2026), a member of the right-wing Partido Liberal (PL) who has been implicated in various corruption probes. Among the main scandals that made headlines in July was a corruption case involving the public policy coordination agency Instituto Rio Metrópole (IRM), which prompted Couto to sack various leading IRM personnel.

On 9 July the state prosecutor’s office of Rio de Janeiro launched an operation into alleged corruption in the IRM which saw the arrest of six suspects tied to the scheme, including IRM president Davi Perini Vermelho, who is suspected of crimes such as money laundering and passive corruption. The alleged scheme involves suspicious contracts signed by IRM from 2022-2024 with various infrastructure consultancy firms, with the estimated value of the allegedly fraudulent contracts totalling over R$86m (US$16.9m).

Media reports have highlighted that the investigation also comes amid an internal audit of IRM that Couto requested shortly after assuming office, which has discovered possible financial irregularities in every secretariat of the agency. On 20 July Couto ordered a purge of the institution in charge of overseeing projects in the Greater Rio metropolitan region, with around 30 senior appointees in the agency being dismissed. At the time of writing, Perini Vermelho’s permanent replacement has not yet been confirmed, with Couto appointing the Rio state government’s institutional security secretary, Roberto Leão, to oversee IRM in the interim until a new president is chosen.

Although Castro has not been personally implicated in the IRM scandal, the alleged corruption occurred during his administration, under the watch of officials he appointed. The case adds another chapter to the history of corruption concerns that have plagued many state administrations, with almost every governor of Rio in recent decades having been accused of or convicted on corruption charges. Castro himself officially assumed office in 2021 after his former boss Wilson Witzel (Partido Social Cristão, PSC) was impeached after being found guilty of misappropriating public funds tied to the state government’s response to the coronavirus (Covid-19) pandemic.

Serving as Witzel’s deputy governor, Castro took over the governorship and won re-election in 2022, but authorities found evidence that he misused public funds to boost his re-election campaign. On 25 March this year the superior electoral court (TSE) declared Castro and his deputy governor Thiago Pampolha guilty of abuse of power, sentencing them to a several-year electoral ban. Just two days before the TSE decision, Castro had already stepped down in order to run for a senate seat in the congressional elections in October, but the ruling has blocked his ambitions.

In addition to committing electoral infractions, Castro has also been implicated in various corruption investigations. On 15 May the federal police (PF) served search warrants against Castro in relation to an alleged tax fraud scheme involving the Rio state government and the fuel producer Refit. Less than two weeks later, PF investigators searched Castro’s home again on 26 May in relation to a different corruption probe, the high-profile Banco Master fraud investigation [EB-26-01], due to alleged connections between the controversial bank and the Rio state government’s RioPrevidência pensions and social security fund.

PL candidates

With Castro banned from running for office, his right-wing Partido Liberal (PL) has chosen other options to run in the general elections in October. On 25 July the PL held a conference to confirm which of its members it will field for various electoral contests. The party affirmed its support for Senator Flávio Bolsonaro to run in the presidential election and confirmed that the head of the Rio state legislative assembly, Douglas Ruas, will be its candidate for the Rio gubernatorial race. For the federal senate elections, the PL will back the re-election of Senator Carlos Portinho (PL) rather than pick a new candidate for the constituency of Rio.