By Pedro Fonseca
RIO DE JANEIRO (Reuters) - Brazilian investigators said on Tuesday that politicians and the head of the national Olympic committee arranged a $2 million bribe to bring the 2016 games to Rio de Janeiro, despite the city having the worst conditions to host the event.
Police in Rio raided the home of Brazil's Olympics chief, Carlos Arthur Nuzman, after prosecutors accused him of conspiring with former state Governor Sergio Cabral, already convicted in a separate corruption case, to buy the games.
Nuzman's lawyer, Sergio Mazzillo, said his client was innocent. Calls to Cabral's attorney were not returned.
The legacy of South America's first Olympics, which ended just over a year ago, has been muddied by allegations of graft.
Nearly every infrastructure project connected to the games is under investigation. Prosecutors allege that major construction firms bribed politicians and others to win contracts worth billions of dollars for the event.
Tuesday's development drove home the stunning fall from grace of officials who sold the idea that Rio's Olympics would transform a developing-world city through giant strides in security, infrastructure and environmental improvements.
Prosecutor Fabiana Schneider said at a news conference that what was striking about Rio winning the games was it did so despite being "the worst candidate."
"The Olympics were used as an enormous trampoline for corruption," Schneider said, citing billions of dollars spent on construction projects.
Most of the building was done by large construction firms now ensnared in Brazil's sweeping "Car Wash" anti-corruption investigation. The firms have admitted paying massive bribes to politicians and former executives at state-run companies in return for contracts.
Prosecutors suspect the same arrangement also took place in works for the 2014 World Cup, which Brazil hosted.
As part of "Operation Unfair Play," a federal judge ordered the seizure of Nuzman's passport and his questioning about an alleged $2 million bribe to secure the vote of Lamine Diack, former president of the International Association of Athletics Federations (IAAF).
Police also served two arrest warrants and conducted search operations as part of the investigation started nine months ago in cooperation with French authorities.
In Paris, prosecutors said the probe had revealed a corruption scheme centred on Papa Massata Diack, the son of Lamine Diack, once an influential member of the IOC now detained in France.
The younger Diack, speaking to Reuters in Senegal, said he was ready to provide proof of his innocence to French investigators if they came to the West African country.
"They have no proof," he said. "They want to justify why they are holding my father in France."
Rio was announced as the winning city in 2009 at a ceremony in Copenhagen, beating out Chicago, Tokyo and Madrid. The Brazilian city lost the first vote to the Spanish capital but bounced back to win the nomination on a third ballot, by a 66-32 vote.
Brazil's then-president, Luiz Inacio Lula da Silva, soccer great Pele, Nuzman, Cabral and others celebrated the announcement in the Danish capital by leaping into the air, waving Brazilian flags and weeping.
In Rio, tens of thousands watched the announcement on the sands of Copacabana beach and erupted into an ear-splitting celebration rivaling the free-wheeling town's Carnival parties.
Brazil, its economy then booming, was on a winning streak. The Olympics were meant to shine a spotlight on the nation as it emerged as a global power, but instead coincided with Brazil's worst recession on record and public anger at the massive Car Wash scandal.
Jules Boykoff, a professor of political science at Pacific University and author of the 2016 book "Power Games: A Political History of the Olympics," said a lack of oversight of the IOC made it more difficult to root out corruption surrounding the games.
"When you graft the Olympic money shuffle onto the full-throttle 'Car Wash' debacle, you have a crucible for corruption," Boykoff said.
Prosecutors allege that conspirators led by Cabral gave $2 million for the elder Diack's influential vote and for him to convince other IOC members from Africa to bring the 2016 games to Rio, with Nuzman making connections on both sides.
The French newspaper Le Monde first reported in March on a payment to the Diack family three days before the 2009 IOC vote to choose the host city for the 2016 games.
After the publication of the Le Monde report, the IOC said it had started investigating the allegations and Rio 2016 games spokesman Mario Andrada said the 2009 IOC vote was clean.
On Tuesday, Andrada declined to comment. A media representative for the Lausanne, Switzerland-based IOC said the organisation learned about Tuesday's operations in the media and was trying to get more information.
A spokesman for the IOC said the situation is of the highest interest to the body because it seeks "to protect the integrity of the candidature process and to address and sanction any infringements."
The spokesman underscored that Papa Massata Diack never held any position within the IOC and that his father lost his honorary membership in late 2015.
(Reporting by Pedro Fonseca and Richard Lough in Paris; Additional reporting by Rodrigo Viga Gaier in Rio de Janeiro, Brad Brooks in Sao Paulo, Silvio Cascione in Brasilia, Karolos Grohmann in Berlin and Diadie Ba in Dakar; Writing by Brad Brooks; Editing by W Simon and Bill Trott)