Odebrecht and Braskem pay $ 3.5 Billion in Lava Jato Corruption Case
Investigators found a system of “professional” corruption in the Brazilian construction company. The company had a bribe management department.
Construction company Odebrecht and its petrochemical arm Braskem testified before a US court last Wednesday that they are guilty of paying bribes in exchange for contract benefits.
This corruption was discovered in Operation Lava Jato, the operative group of the Brazilian Prosecutor’s Office that has been investigating corruption for more than two years in relation to the scandal that broke at the oil giant Petrobras.
This declaration, in the US, is part of a leniency agreement (confession in exchange for reduction of punishment) involving the US, Swiss and Brazilian governments, and provides for a total payment of $ 3.5 billion by Odebrecht and Braskem to get rid of the accusations in the three countries.
This figure represents the highest fine ever paid in the world in such deals and is seen as one of Lava Jato’s triumphs.
“Odebrecht and Braskem used a secret but fully functional Odebrecht business unit – a bribe department, to put it simply – that systematically paid hundreds of millions of dollars to corrupt government officials in countries in the three Continents,” said Sung-Hee Suh, assistant attorney general for the Criminal Division of the US Department of Justice, in a press release.
The two companies filed their claims in a federal court in Brooklyn, New York. Both admitted having paid employees to obtain contracts. Beyond the fine, firms pledged to adopt practices to prevent actions like this one from happning again.
Odebrecht agreed with the US authorities that the appropriate amount of the fine would be $ 4.5 billion, but said it could disburse only $ 2.6 billion.
The final amount will be determined in a new hearing, on April 17. Braskem, for its part, agreed to pay 957 million dollars.
Under the agreement, the US will pay the amount that companies also owe to Brazil and Switzerland, partners in the leniency agreement. Brazil will keep 80% of that amount, while the remaining 20% will be shared equally by the US and Swiss governments.
In a statement, the Brazilian Federal Public Ministry, responsible for the Petrobras case, said that the Brazilian part of this leniency agreement was signed with Odebrecht on December 1, 2016 and with Braskem on the 14th of this month.
The agreements have already been approved by the Anti-Corruption Court of the Brazilian Prosecutor’s Office, but the will still be submitted to the approval of the competent courts.
“In both agreements, the companies revealed and committed to uncovering illegal facts learned in an internal investigation, carried out in Petrobras and other spheres of power, involving political agents of the federal, state, municipal and foreign governments.
These illegal activities, within the framework of the Odebrecht group, were carried out with the support of the structured operations sector, whose activities were denounced by Operation Lava Jato, the agency said.
According to the US Department of Justice, Odebrecht assumed to have been involved in a “massive bribery scheme for more than a decade, starting in 2001.”
“During that period, Odebrecht paid nearly $ 788 million in bribes to government officials, their representatives and political parties in several countries to have preference on business contracts.
This illegal conduct was directed by the highest levels of the company, with bribes paid through a complex network of companies, unaccounted transactions and offshore bank accounts, the text notes.
This procedure was repeated in countries such as Angola, Argentina, Colombia, Dominican Republic, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru and Venezuela.
The US Government also maintains that payments to members of the Brazilian Executive began in 2003 and continued until approximately 2016, while Operation Lava Jato was already underway.
Construction giant Odebrecht, one of the largest Brazilian companies, had a department dedicated to irregular payments, according to the Federal Police of Brazil.
Those in charge of the Petrobras case, who are investigating a complex plot of corruption by the state oil company and contractors, believe that senior executives of the Odebrecht group operated a parallel accounting system called “structured operations sector” to pay bribes, with its own electronic payment system. Eight company executives were arrested this morning.
The Federal Police believe that there are indications that Odebrecht made improper payments through intermediaries, with the objective of obtaining advantages for the company, and points out that several recipients of cash bribes had “direct or indirect links with public power in all spheres “.
The former president of the group, Marcelo Odebrecht, was sentenced in early March to 19 years in prison for his involvement in the corruption plot at Petrobras, which is led by Judge Sérgio Moro.
The supposed payments of the department dedicated to the bribes were carried out at least until the second half of 2015, when Marcelo Odebretch had already been detained.
Investigators believe that the contractor’s president consented to corruption and even intervened directly to control the accounts of this fraudulent department.
Investigations have led to suspicion of corruption in projects such as the Corinthians stadium in São Paulo and in Porto Maravilha, the project that reformed the port area of Rio in January in order to prepare it for the Olympic Games scheduled for August.
The prosecution believes that the bribery department has also made payments to those responsible for works at Goiânia airport, SuperVia, the Rio de Janeiro urban train system, and Trensurb, which manages the rail lines in Rio Grande do Sul, the southern most state of the country.
The new phase of Operation Lava Jato began early on Tuesday. Earlier in the day, investigators issued 67 search and arrest warrants, 28 of which have a mandate for suspects to testify, 11 temporary detentions and four pretrial detention orders in the states of São Paulo, Rio de Janeiro, Santa Catarina , Rio Grande do Sul, Bahia, Piauí, Brasilia, Minas Gerais and Pernambuco.
Today, people close to the Government of Brazil watched nervously as a Federal Police car drove to the Royal Tulip hotel in Brasilia, where former President Luiz Inacio Lula da Silva is staying.
However, according to the Folha de S. Paulo newspaper, the patrol car left the place shortly afterwards without arresting anyone. The Prosecutor’s Office requested this month preventive detention for the former president, accused of crimes of money laundering and hiding of patrimony.
According to the indictment, Lula and his wife, Marisa Letícia da Silva, hid the ownership of a luxury apartment in Guarujá, São Paulo. The address is in the name of the Brazilian construction company OAS, investigated in the same anti-corruption operation. Lula has always denied that the property was his.
Some of the information that points to misconduct at Odebrecht was revealed by María Lucia Tavares, a company secretary who was detained in a previous operation and who has agreed to work with the authorities in exchange for a reduction of the sentence.
Those investigated at Odebrecht will be responsible for crimes of corruption, evasion, the formation of a criminal organization and money laundering.