Secret unit facilitated bribes
AT LATIN America’s biggest construction company, bribing government officials around the world became so common that a division was created devoted to tracking and facilitating kickbacks.
When wire transfers were inconvenient, workers in this division at Odebrecht of Brazil would organise deliveries of cash-stuffed suitcases to secret locations.
The scheme lasted more than two decades and involved bribes to government officials in a dozen countries across three continents, but eventually it came undone. On Wednesday, Odebrecht and its affiliated petrochemical firm, Braskem, pleaded guilty in US District Court in Brooklyn, New York, to charges that they paid hundreds of millions of dollars in bribes. Together the companies will pay at least $3.5 billion in penalties in a case brought by authorities in the United States, Brazil and Switzerland.
It is the biggest penalty for a violation of the Foreign Corrupt Practices Act of 1977, surpassing a $800 million penalty paid by Siemens in 2008 to authorities in the United States. US officials said Wednesday that their investigation was continuing and that individuals could also be prosecuted.
The settlement followed a broad investigation in Brazil into corruption at Petrobras, the state-owned oil compa- ny, that plunged the country into political crisis and spurred protests that led to the ouster of President Dilma Rousseff. While not implicated – Rousseff was convicted by Brazil’s senate in a separate matter – the plunge in popular support paved the way for her impeachment in August.
Odebrecht, which built the Miami International Airport and has operations in 27 countries including the United States, China and Venezuela, has been accused of colluding with Petrobras executives and other contractors as well as Braskem to take more than $1 billion in kickbacks from the oil company. Under the terms of the agreement with prosecutors, Odebrecht has said it will pay $2.6 billion, while Braskem has agreed to pay $957 million.
Under the terms of the agreement, the company “will continue to cooperate with the competent authorities and improve its governance and anticorruption compliance practices”. It noted that it will be subject to external monitoring for about three years.
The Brazilian investigation into Petrobras, called “Operation Carwash,” a reference to a service station that laundered money, has shaken the political establishment to the core. The authorities there have secured 112 convictions of 83 people ensnared in the investigation, including executives of Odebrecht. The scandal has left Brazil’s oil industry bereft of investment during the country’s worst economic crisis in decades.