How Corruption Is Bringing Down the Odebrecht Empire in Brazil

Rio de Janeiro: Brazilians are overwhelmed by information in regards to the huge net of corruption woven by the nation’s largest development firm, Odebrecht, which is energetic in dozens of areas and international locations.

The enterprise empire constructed by three generations of the Odebrecht household is crumbling after a three-year investigation by the Lava Jato (automotive wash) operation in Brazil launched by the Federal Public Prosecutor’s Workplace, which is investigating corruption that has generated tens of millions of {dollars} in bribes. invested. In return for main public works contracts from state-run oil big Petrobras.

Marcelo Odebrecht, who headed the corporate from 2008 to 2015, was arrested in June 2015 and initially sentenced to 19 years in jail.

In October 2016, he and the corporate reached a cut price deal to cooperate with the investigation. A complete of 77 former and present Odebrecht officers made greater than 900 sworn statements to Lava Jato prosecutors, inflicting a political earthquake in Brazil and all through Latin America.

In December, the US Division of Justice revealed that Odebrecht allegedly spent $1.04 billion in bribes to politicians and authorities officers in ten Latin American and two African international locations, together with Brazil, accounting for 57.7% of the full.

The US is conducting its personal investigation, which might finish in legal convictions, as a number of Odebrecht subsidiaries, such because the petrochemical firm Braskem, function there and their shares are traded on the New York Inventory Change.

That is additionally occurring within the case of Petrobras, which is embroiled in a corruption scandal and is beneath investigation on the initiative of shareholders within the US.

Arrest warrants issued by a Peruvian court docket in opposition to former Peruvian President Alejandro Toledo (2001–2006), who resides within the US, and fees implicating present Colombian President Juan Manuel Santos and Panama President Juan Carlos Varela simply tip There are icebergs.

What was disclosed by Odebrecht executives and former executives, in addition to former administrators of assorted departments resembling exterior affairs, infrastructure, industrial engineering or logistics, has but to be made public.

New figures associated to the alleged bribery are anticipated to emerge over the subsequent few months, which have already been disclosed within the US, together with $599 million distributed in Brazil, $98 million in Venezuela, $92 million within the Dominican Republic, and Panama. $59 million and $50 included. MN in Angola

In Peru, “solely” $29 million has been disclosed since 2005. The quantity is small, contemplating that for the Southern Peru Pipeline – nonetheless beneath development – alone, the estimated funding quantity is $7 billion. The Peruvian authorities has determined to terminate the contract with Odebrecht for the mission.

Marcelo Odebrecht (R), head of Latin America’s largest engineering and development firm Odebrecht SA, and Ottavio Marx Azevedo (L), CEO of Brazil’s second largest builder Andrade Gutierrez, are escorted by federal law enforcement officials as they depart the Institute of Forensic Science . In Curitiba, Brazil, June 20, 2015. credit score: Reuters

Along with Odebrecht, the Inter-Oceanic Freeway, which runs from the Brazilian border to Pacific Ocean ports in southern Peru, is being constructed by three different Brazilian development companies – Camargo Correa, Andrade Gutierrez and Queiroz Galva – who reportedly They’re additionally beneath investigation for corruption. ,

Through the presidency of Alan García (2006–2011), Peru and Brazil signed an settlement for the development of 5 massive hydroelectric crops in Peru, which was annulled by his successor Ollanta Humala (2011–2016), nevertheless, doubts. Is. To obtain $3 million from Brazil for his election marketing campaign.

Odebrecht, which has a concession to handle Chagla, the third largest hydroelectric plant in Peru with a capability of 462 MW, was the principle development firm for the development of the brand new crops.

A rising wave of native and trade scandals highlights the attain of Odrebrecht’s entice. Braskem is accused of distributing a $250 million bribe to keep up its management place within the US within the manufacturing of thermoplastic resins, with 36 crops unfold throughout Brazil, Mexico, the US, in addition to Germany.

The empire, born in 1944 as a easy development firm, started to diversify into actions resembling logistics and shipbuilding corporations over the previous half century, with the event of the sugarcane enterprise, army applied sciences and oil providers.

Within the early Nineteen Seventies, the group constructed the Petrobras headquarters in Rio de Janeiro, sealing a connection that led to the present catastrophe that destroyed the status of the corporate, which was so happy with its “entrepreneurial know-how”, There was a set of moral and operational enterprise. The ideas to which its speedy growth was attributed.

However Odebrecht’s success can really be attributed to a strategic imaginative and prescient and a technique that proved profitable till the Lava Jato operation. A few of its strategies included “friendship with the king”.

Angola is the very best instance. The present chairman of the corporate’s board of administrators, Emilio Odebrecht, son of founder Norberto Odebrecht, meets with Angolan President José Eduardo dos Santos in Luanda yearly to debate tasks for the nation.

Formally, what they do is assess the tasks undertaken by the corporate and outline new objectives.

The reason given for the particular remedy Odebrecht obtained is that it has such a powerful presence in important infrastructure works within the nation in areas resembling reconstruction, power, water, highways and urbanization.

Odebrecht has a fantastic status in Angola, because it constructed the Capanda hydroelectric energy plant on the Kwanzaa River between 1984 and 2007, going through delays and dangers as a result of 1975–2002 civil struggle. It’s now additionally constructing the biggest plant on the Kwanzaa River, in Lauca, Angola, with a capability to generate 2,067 MW.

The group is ubiquitous within the nation, managing Belas Mall – an upscale procuring heart within the south of Angola’s capital Luanda – implementing a plan to produce water to the capital, creating the primary a part of the economic district on the outskirts of Luanda, the constructing Constructions are taking part in a significant function in housing growth and saving the nationwide sugarcane trade.

It led the strategic mission of increasing the Mariel Port and managing a sugar plant in Cuba to assist gasoline the restoration of this ailing sector of the Caribbean nation’s economic system.

In different international locations, resembling Panama, Peru, and Venezuela, the Brazilian group has a formidable variety of duties and tasks available, as numerous as city transport, roads and bridges, ports, energy crops, fossil fuels and even agriculture. in areas. ,

However that cycle of growth is over. Heavy indebtedness, declining enterprise and no entry to credit score, not even from Brazil’s growth banks, and the stigma of corruption, the group has been making an attempt to cooperate with justice authorities within the international locations concerned, looking for settlement. in order that it may proceed to function and finally recuperate.

It now stays to be seen whether or not Odebrecht is “too massive to be bankrupt”, as was mentioned of some banks initially of the worldwide disaster that started in 2008.

The US and Switzerland, the place banks have been allegedly used to bribe or launder cash, have signed cooperation agreements with authorized authorities in Brazil as a part of an ongoing assault in opposition to corruption within the Latin American big. Did it

The consequences are heavy. In Brazil, revelations about Odebrecht are anticipated to impress a tsunami within the political system. 2 hundred MPs and authorities officers, together with senior members of the present administration and legislature, could have obtained the bribe.

The commerce group had created a particular bribery division. In keeping with US justice officers, each greenback “invested” in bribes produced $12 in contracts.

The estimate relies on greater than 100 tasks undertaken or in progress in Argentina, Brazil, Colombia, the Dominican Republic, Ecuador, Guatemala, Mexico, Panama, Peru and Venezuela, in addition to Angola and Mozambique in Africa.


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