Brazilian contractor UTC fined $175m for corruption

Brazilian construction company UTC Engenharia has finally learned what it will be fined for its part in the Lava Jato corruption scandal: $175m.

Brazil’s comptroller general said on 10 July that the sum that was lessened by a leniency agreement in which UTC admitted guilt.

The money will be used to reimburse Petrobras, electrical utility Eletrobras  and the federal rail company, Valec.

The fine seeks to recover 70% of UTC’s profits from contracts that it obtained illegally with the public sector companies.

In exchange, UTC may be allowed to compete for public sector work, if allowed by the Federal Court of Audit.

Brazil’s attorney general Grace Mendonça said the decision to grant leniency and bring an end to the prosecution of UTC meant that money would be returned to the government more quickly. 

However, UTC has up to 22 years to pay the entire amount, after an initial payment $9.5m due by the end of this year. If it fails to meet that deadline, it will be liable for a further fine of about $1bn.

In January, UTC admitted its participation in the Petrobras corruption ring, in which construction companies were overpaid for contacts they obtained from state-owned companies. The politicians who helped them win those contracts then received a kickback for their services.

The case, which has since been one of the largest corruption scandals in history, has led to the prosecution and imprisonment of dozens of officials and executives, including a number of senior politicians including José Dirceu, the chief of staff of former president Lula da Silva (pictured). 

In the case of UTC, Ricardo Pessoa, the president of the company, was sentenced to eight years in prison in June last year after agreeing to cooperate with the authorities. 

Image: Politician José Dirceu is arrested during the Lava Jato investigation (Agencia Brasil/Creative Commons)

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