Exec Gets 19 Years in Kickback Scheme

THURSDAY, MARCH 10, 2016


The former president of Brazil’s largest construction company is the latest official to be sentenced in the ongoing investigation into corruption at the country’s state-run oil company.

Marcelo Odebrecht, who headed his family’s 72-year-old engineering and construction conglomerate Odebrecht SA, received a 19-year prison sentence for his role in the kickback schemed known as “Operation Carwash,” Reuters reported Wednesday (March 9).

Odebrecht, 47, was convicted of bribery, money laundering and taking part in organized crime, a sentence his defense lawyer Nabor Bulhoes called "a grave judicial error."

Courtroom Activity

According to federal judge Sérgio Fernando Moro, who presided over the case, Odebrecht paid nearly 109 million Brazillian reals  (about US $29.6 million) as well as another $35 million reals (US $9.5 million) in bribes in corruption related to Petrobras, the Financial Times wrote.

“Corruption with the payment of bribes worth more than R$100m [about US $27.1 million] and causing as a consequence equivalent losses to the public coffers deserves special reprobation,” Moro said in his ruling, according to the Times.

He added that there was “robust evidence”—including phone and email exchanges—that showed Odebrecht to be acting as the “mastermind of the scheme,” according to the Chicago Tribune.

Bulhoes, however, explained that the judgment was "unfair and unjust because none of the evidence produced backs it," the Houston Chronicle reported, adding that no documentation linking Odebrecht to the illegal activities had been produced to date.

Maintaining his innocence, Odebrecht is reported to have referred questions from investigators during his testimony to a written document he had submitted prior to the hearing.

"I, personally, never involved myself in the management of more than 300 companies in 15 different sectors that make up the group," Odebrecht said in his written response, according to The Guardian.

"Be it because that interference would be humanly impossible, or because it's totally contrary to our culture of planned delegating, entrepreneurship and decentralization of the group's businesses."

Bulhoes and his client will appeal the judgment, reports said.

Operation Carwash  

The bribery, price fixing and money laundering operation, known as “Operation Carwash” (Lava Jato) because of a location where the money was laundered, is said to cover more than $20 billion in government contracts. Authorities have said this is the largest corruption scheme ever uncovered in the country.

Petrobras tanks
By Marcello Casal Jr/ABr / CC BY 3.0br via Wikimedia Commons

In the country's largest corruption scheme, several participating companies overcharged Petrobras for contracts, split the take with certain Petrobras officials and then used that money to persuade politicians to “provide cover” for the activity.

Prosecutors have said at least $2 billion in bribes were paid over a decade, according to sources. Most of the bribes were from construction and engineering firms to Petrobras executives who, in return, awarded those companies with inflated contracts for building refineries, drilling platforms and ships.

As previously reported, several participating companies overcharged Petrobras for contracts, split the take with certain Petrobras officials and also used that money to persuade politicians to “provide cover” for the activity.

One of those companies—Camargo Correa—agreed to cooperate in the investigation and pay what amounted to a US $29.7 million fine in exchange for a reduced penalty and assurances that further investigations into its administration would be dropped.

More than 50 sitting congressmen and other top political officials are also reported to be under investigation for their roles in the scheme.

Among those sentenced earlier, were João Vaccari, former treasurer of Brazil’s Workers party, who was found guilty of taking at least $1 million in bribes between 2008 and 2012, and Renato Duque, former head of corporate services for Petrobras, said to be responsible for providing Vaccari with cash. They received 15 and 20 years in prison respectively, as reported earlier.

Rejected Plea Bargain

Odebrecht is said to be the highest-profile private-sector executive to be convicted in the investigations into the kickback scheme, according to the Chronicle. His relationships with political leaders, including President Luiz Inacio Lula da Silva, also put him in the spotlight for this case.

Lula was reported to have been taken into custody for questioning on Friday (March 4), as investigators claimed to have evidence that Lula took “payments and favors” from Odebrecht and other firms, Reuters said, adding that Lula denies the accusation.

Meanwhile, Odebrecht was reported to have turned down the opportunity to accept a plea bargain from the prosecutor. According to the news agency, he told the lawyers “he had inherited morals that would not let him collaborate with prosecutors."

Odebrecht’s spokeswoman, quoting his attorneys, added, “He is, as he has always been, available to give the authorities all due clarification," according to the news agency.

Two other executives from Odebrecht, Marcio Faria and Rogerio Santos, have also received sentences of 19 years and four months in jail, reports said.

   

Tagged categories: Asia Pacific; Criminal acts; EMEA (Europe, Middle East and Africa); Government; Government contracts; Latin America; Laws and litigation; North America; Oil and Gas; Petrobras; Petrochemical Plants; Program/Project Management

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