No formal explanation was recorded for the reversal
Cedae director Antonio Carlos dos Santos, appointed by Castro, ignored internal alerts to reduce R$200M+ Master Bank exposure and blocked a R$44M withdrawal order without documented justification. The R$200M Cedae investment in Master Bank began one week after Castro attended a R$60K dinner paid by banker Daniel Vorcaro in New York in May 2023.
- R$ 44.7 million withdrawal order canceled without documented reason on May 28, 2025
- R$ 200 million Cedae investment in Banco Master began one week after Castro attended R$ 60,000 dinner paid by banker Vorcaro in May 2023
- Director Antonio Carlos dos Santos, appointed by Castro, ignored internal alerts and negotiated unfavorable repayment terms as bank collapsed
- Master Bank's credit rating fell to CC (near-certain default) after Cedae agreed to monthly R$ 20 million installments
Cedae employees linked to ex-governor Cláudio Castro aborted a R$44 million withdrawal from Banco Master in May 2025 as the institution collapsed, with internal investigation revealing suspicious dealings and a director's meeting with the banker.
In May 2025, as Banco Master teetered toward collapse, employees of Rio's state water company Cedae made a choice that would cost the utility dearly. A financial manager named Rodrigo Borges Mendes issued an order to withdraw R$ 44.7 million from the failing bank. Ninety minutes later, the order was canceled. No formal explanation was recorded. An internal ethics investigation later found that Borges had simply followed instructions from his superior's assistant—without understanding why.
The man at the center of these decisions was Antonio Carlos dos Santos, Cedae's director of finance and investor relations. He had been appointed to the position by then-governor Cláudio Castro in November 2022, after serving as Castro's chief of staff earlier that year. For months, internal committees at Cedae had urged Santos to reduce the company's exposure to Banco Master, which held more than R$ 200 million of the utility's money. Santos ignored them.
When the withdrawal order came through on May 28, 2025, Santos's office killed it. The ethics commission found no documented reason for the reversal. Borges later admitted in an interview that he had simply canceled the transaction because his boss's assistant told him to, without knowing the justification. It would not be until September 2025—after the Central Bank rejected a proposed rescue of Master by another institution—that Cedae would even begin formal steps to recover its investment.
By then, the damage was already done. With the bank's collapse imminent, Santos and Cedae's president Aguinaldo Ballon (another Castro appointee) agreed to accept repayment in monthly installments of R$ 20 million. At that pace, it would take roughly a year to recover what Cedae had invested. Within weeks, Master's credit rating plummeted to CC—a designation signaling near-certain default. The utility still had R$ 220 million outstanding.
Master never paid in October or November. Yet Santos did not demand immediate repayment. Instead, on November 10, he met directly with Daniel Vorcaro, the bank's owner, to negotiate a contract modification and seek "real guarantees" to secure the debt. Those guarantees never materialized. The investigation notes simply that they "were not consolidated in time."
The origins of the investment itself now appear equally questionable. In May 2023, Governor Castro attended a R$ 60,000 dinner in New York paid for by Vorcaro. Six days later, Santos met with representatives from Banco Master at Cedae's headquarters in downtown Rio. This encounter marked the beginning of negotiations for the R$ 200 million investment—a transaction that violated Cedae's own investment policies at the time. Around the same time, Santos initiated a review of those policies, tailoring them to permit exactly the kind of investment he was about to make.
The ethics investigation, which ICL Notícias obtained, documents a pattern of decisions that favored the banker over the utility. A dinner in New York. A meeting six days later. A policy change. An investment. Ignored warnings. A blocked withdrawal. A collapsed bank. A director meeting privately with the owner to negotiate better terms for him, not for Cedae. What emerges is not a series of coincidences but a chain of choices, each one moving in the same direction, each one made by people appointed by the same governor, each one benefiting the same banker.
Notable Quotes
The financial manager acknowledged in an interview that he canceled a R$ 44 million withdrawal from Banco Master following orders from the director's assistant without knowing the reason— Cedae ethics investigation
The real guarantees sought by Santos to secure the debt were not consolidated in time— Cedae ethics commission report
The Hearth Conversation Another angle on the story
Why would a financial director block a withdrawal order without explanation when the bank was clearly failing?
That's the question the ethics commission couldn't answer either. There's no documented reason in the files. The manager who canceled it said he was just following orders from the director's assistant.
And this director—Santos—he was appointed by Castro. Did Castro benefit from keeping the money in Master?
Not directly that we know of. But Castro had just had a R$ 60,000 dinner paid for by Vorcaro a week before Santos even met with the bank. The timing is what makes people suspicious.
So the investment itself might have been political, not financial?
It looks that way. Cedae had rules against this kind of investment. Santos changed the rules right before making it. That doesn't happen by accident.
What about after the bank started failing? Couldn't Santos have just demanded the money back?
He could have. Instead he negotiated monthly payments while the bank was collapsing. Then he met with Vorcaro privately to ask for contract changes, not to demand repayment.
It sounds like he was protecting the banker, not the utility.
That's what the investigation suggests. Every decision favored Vorcaro. The blocked withdrawal, the installment plan, the private meeting—they all gave the banker more time and flexibility while Cedae lost money.
Did anyone face consequences?
The investigation documented what happened. What comes next is up to authorities with actual enforcement power.