Odebrecht hopes to emerge from the wreckage of Lava Jato “by middle of year”19 January 2017 | By GCR Staff 0 Comments
Odebrecht, the Brazilian construction and engineering giant at the centre of the Lava Jato corruption scandal, plans to reach settlements in each of the 12 countries where it has admitted to paying bribes.
Sources close to the company told Reuters that Odebrecht hoped to complete the process by the middle of the year.
In a deal with Brazilian, US and Swiss prosecutors on 21 December Odebrecht and another company pleaded guilty and agreed to pay up to $4.5bn, the largest penalty ever in a foreign bribery case.
As part of its plea, the company admitted to paying officials to help secure construction contracts in 12 countries.
Those countries included Venezuela, Guatemala, Peru, Ecuador, Argentina, Panama, Colombia, Dominican Republic, Angola and Mexico.
“The company has to pass through this phase if it is to return to growth”– An unnamed source
Nearly 80 Odebrecht executives and employees have agreed to turn state's witness as part of a leniency deal, and their testimony is expected to provide even more evidence about the firm’s corruption, which spanned Latin America and reached as far as Angola, in Africa.
The deal with the US triggered a downgrade in the company’s credit rating. The rating agency Fitch downgraded the company from B– to CC, as the deal “increased Odebrecht’s image risk and triggered a number of investigations in countries where the company operates”.
Altogether, Odebrecht said it paid $439m in bribes outside of Brazil, with the largest going to officials in Venezuela, the Dominican Republic and Panama.
According to a plea deal signed by the company with the US Department of Justice, the company paid $98m to intermediaries for services in Venezuela “knowing the money would be passed as bribes to officials”.
According to the Wall Street Journal, the administration of late President Hugo Chávez awarded Odebrecht $11bn in contracts to build industrial and agricultural communes in remote parts of the country and connect them to metropolitan areas with roads and railways.
The opposition state governor for Miranda, Henrique Capriles Radonski, was summoned to appear before the Venezuelan Comptroller General’s office last week in connection with the scandal, although he failed to attend.
Family-owned Odebrecht, which is the largest construction concern in Latin America, has agreed to pay $59m to Panama. This is equal to the amount it paid in bribes to “individuals and entities” between 2010 and 2014 to obtain contracts valued at $175m.
Panama is seeking the extradition of its former president Ricardo Martinelli and has barred Odebrecht from bidding for future public tenders. It is seeking to remove the company from projects it is already involved in, including a line of the Panama City’s metro, a bridge over the Panama Canal and plan for a hydroelectric dam.
Odebrecht had a portfolio of projects worth $21.3bn in September and debts of $3.4bn.
Its long-term prospects depend on its ability to reconstruct its reputation. One of Reuters’ unnamed sources commented: “The company has to pass through this phase if it is to return to growth.”
Image: Odebrecht’s use of bribery extended across Latin America and the Caribbean (Odebrecht)