Brazil’s Odebrecht to Pay R$2.7 Billion for Corrupt Practices

By Lise Alves, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – Odebrecht announced it has signed a leniency deal with two of Brazil’s federal agencies, where it agrees to pay R$2.7 billion during the next twenty years for its role in the Lava Jato (Car Wash) corruption scheme.

According to the company, once one of the Latin America’s largest construction conglomerates, the agreement strengthens anti-corruption actions in Brazil.

“This agreement allows us to move forward in a more sustainable way in the resumption of growth, mainly in Odebrecht Engenharia e Construção,” said Odebrecht’s CEO, Luciano Guidolin, in a note released on Monday.

“Our commitment is to act as an example of ethics, integrity and transparency in the search for projects that demand the best we have to offer to society: the technical experience of those who are recognized as one of the best representatives of Brazilian engineering excellence,” added the executive.

Brazil’s Ministry of Transparency and Comptroller General of the Federal Government (CGU) and the Federal Attorney General’s Office (AGU) signed the agreement with the legal entity which is equivalent to plea deals given to individuals charged with corruption.

According to the federal agencies, the amount to be repaid by Odebrecht to public Brazilian companies will be adjusted by the Selic (benchmark interest) rate and may total R$6.8 billion by the end of the term.

Government backed news agency, Agencia Brasil, the first installment of R$60 million was paid this week.

Of the total to be paid, approximately R$900 million correspond to bribes involving 150 public agents (both civil servants and politicians), R$1.3 billion to profit received on contracts obtained through these bribes and R$442 million correspond to the fine to be paid due to corrupt practices.

The Odebrecht conglomerate has been at the center of the Lava Jato corruption scheme, with its former CEO, Marcelo Odebrecht sentenced initially to nineteen years in jail and charged with paying more than US$30 million in bribes to obtain government contacts for his company.

In 2015, after months in jail, the former CEO made a plea-bargaining deal with federal prosecutors which reduced his jail term to ten years and R$73 million in fines. In December 2017, Brazilian courts accepted his appeal and ordered him to serve the rest of his term in house arrest.

After removing most of the executives who were accused of wrongdoing, Odebrecht now tries to recover its good name.

“This agreement will serve as an example to disseminate the good practices expected in the public-private relationship. Upon completion of this process, the actions of impropriety and administrative proceedings conducted by AGU and CGU against Odebrecht will be extinguished,” concluded the release distributed by the company.