Home/Noticias/Brazil Arrests Head of Odebrecht in Petrobras Scandal
Brazil Arrests Head of Odebrecht in Petrobras Scandal
SÃO PAULO, Brazil — Brazilian police on Friday arrested one of the country’s richest men, Marcelo Odebrecht, as the fallout broadens in an investigation into corruption at the state-run oil giant Petrobras.
The investigation, which is looking into whether subcontractors may have colluded with top Petrobras executives to overbill the company and pay bribes, has touched the highest levels of government and business.
In the latest development, Mr. Odebrecht, the billionaire chief executive of the Odebrecht conglomerate, was arrested with three other senior company executives and the chief executive of Andrade Gutierrez, another major construction conglomerate. The federal prosecutor accused the executives of knowing that their companies paid bribes to politicians that added up to 710 million reais ($230 million).
“We have material proof that they knew about the practice of overbilling contracts with Petrobras and they participated directly in the division of contracts within the cartel,” a police investigator, Igor Romário de Paula, said in a news conference Friday.
Both companies issued statements on Friday denying wrongdoing. Odebrecht added that the arrest of Mr. Odebrecht was “unnecessary” because the company and its executives were already fully cooperating with the investigation.
The investigation has been a political and corporate scandal, putting the broader economy at risk as Petrobras has frozen contracts and its subcontractors have cut payrolls in response.
The federal prosecutor’s office filed corruption charges against the former treasurer of President Dilma Rousseff’s Workers’ Party and against several former senior Petrobras executives. Petrobras’s top management resigned in February over the scandal, and the company in April attributed about $2 billion in losses to corruption.
Odebrecht and Andrade Gutierrez are major Petrobras subcontractors and receive a significant portion of their revenue from government contracts. Odebrecht in particular is a linchpin of Brazil’s economy, active in areas including infrastructure, petrochemicals, real estate, agribusiness and military contracting. The company, which operates in 21 countries, had over $35 billion in revenue last year.
The police called Friday’s wave of arrests “Erga omnes,” a Latin phrase that means “valid for all.” It was an apparent message that the country is trying to end its so-called culture of impunity, in which the rich and powerful break the law without fear of punishment.
The executives were arrested on Friday either as a “preventive” or “temporary” measure, so they may be released soon.
But a wave of executives arrested on similar charges last November in an earlier phase of the investigation spent five months in jail before they were released. Several companies ensnared by the corruption scandal have also gone bankrupt.
“So far punishment has been mild, but at least the number of arrests has increased,” said Sérgio Lazzarini, a professor at the Insper business school here who has written widely about the relationship between government and business in Brazil. “Businessmen now are fearful about making deals with politicians.”