Brazilian police have arrested Marcelo Odebrecht (pictured), chief executive of Latin America’s biggest construction firm, Odebrecht SA, accusing his family-run conglomerate of spearheading a $2.1bn bribery scheme at state-run oil firm, Petrobras.
Police also arrested Otavio Marques Azevedo, chief executive of Andrade Gutierrez, Brazil’s second-largest builder, as the scandal known as Operation Lava Jato – Operation "Car Wash" – has now ensnared those at the very top of Brazil’s construction industry.
Billionaire Odebrecht, grandson of Norberto, who founded the company in 1944, and Otavio Marques Azevedo were arrested on Friday 19 June in Sao Paulo and were flown immediately to the southern city of Curitiba, where Brazil’s largest-ever corruption scandal is being investigated.
A prosecutor involved in the probe, Carlos Fernando dos Santos Limas, said he had "no doubt" Odebrecht and Andrade Gutierrez led what he called a "cartel" that inflated the price of contracts carried out for Petrobras, with a percentage of the kickback being passed to Brazil’s ruling Workers Party, led by Brazil’s president, Dilma Rousseff.
The men were not charged, and it was not clear how long they would be detained. Arrests of other executives in the probe have resulted in months-long pre-trial incarceration in Curitiba, Reuters reported.
Both firms issued statements after the arrest. Odebrecht protested that the arrests were "unnecessary" since its executives had always been available to cooperate with the investigation.
Andrade Gutierrez also said it was collaborating with the investigations, and denied "any involvement whatsoever with the facts investigated under the ‘Lava Jato’ Operation and hopes that the Justice system can elucidate all matters as soon as possible".Â
The scandal has rocked Brazil, bankrupted companies and halted major infrastructure projects.Â
In December 2014 police arrested 35 senior executives from well-known Brazilian construction and engineering firms including OAS, Camargo Correa, Engevix, Galvao Engineering, Mendes Jr and UTC Engenharia.
Until now Odebrecht had avoided being implicated in bribery accusations although, in January, ratings firm Moody’s changed Odebrecht’s outlook to negative amid uncertainties caused by the scandal.
The scandal erupted when police arrested a former Petrobas director, Paulo Roberto Costa, in March 2014. According to Costa’s sensational testimony, given in return for leniency, bribes were paid by a number of construction companies that had dealings with Petrobras.
Photograph: Marcelo Odebrecht, 46, is chief executive of Latin America’s biggest construction firm, Odebrecht SA (Globalfamilybusinessaward.com)