Odebrecht They used these bribes to win building

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Odebrecht is a Brazilian construction company that has become an international giant thanks to their completion of over 100 projects in 12 countries, generating gains of about $3.3 billion (USD). But in order to secure these building contracts, they engaged in years of bribery and corruption.The company focuses on building large projects, such as Caracas’ subway, a port in Cuba, dams, airport terminals, and many of the stadiums and infrastructure used by Brazil in the 2014 World Cup and 2016 Summer Olympics.The US authorities said that starting in 2001, and lasting until 2014, Odebrecht paid $788 million in bribes – in several countries – to government officials, political parties, and those in high power. They used these bribes to win building contracts and influence. In at least 12 countries, Odebrecht employees made connections with those in power and those who were favoured to get into power soon. The US Department of Justice said, “The criminal conduct was directed by the highest levels of the company, with the bribes paid through a complex network of shell companies, off-book transactions and offshore bank accounts.” The company created an entire division with the sole purpose of making corrupt payments — called the Division of Structure Operations. It’s computers were separate from the rest of the company for its communications and payments. Payments could go through up to four levels of offshore bank accounts before reaching their final destination – usually someone with political power. When Odebrecht or its recipients wanted to communicate, they used a system separate from the main computer systems to avoid detection.Former CEO Marcelo Odebrecht (pictured) and 76 other company executives were aware that Odebrecht was committing acts of fraud and corruption.Those who are alleged to have accepted bribes from Odebrecht include:Almost a third of Brazil’s current government ministersThe vice-president of Ecuador, Jorge GlasColombia’s current president, Juan Manuel SantosCurrent Mexican president, Enrique Peña NietoFormer Peruvian presidents, Alan García, Alejandro Toledo, Ollanta HumalaCurrent president of Venezuela, Nicolás MaduroMultiple other politiciansOdebrecht’s corruption schemes came crashing down in 2014, when Brazilian officials launched an investigation known as Operation Car Wash (Lava Jato in Portuguese). Operation Car Wash was initially a money laundering investigation, but had expanded to cover allegations of corruption by the state-controlled Brazilian oil company, Petrobras. Petrobras executives allegedly accepted bribes in return for awarding building contracts to Odebrecht. Odebrecht, however, overcharged Petrobras for their building contracts and had robbed them of large sums of money. Petrobras’ stock lost over a quarter of its value, and investigators found that $2.1 billion had gone missing from its balance sheet.In June 2015, former CEO Marcelo Odebrecht was arrested (pictured right) and started serving a 19-year jail term after being convicted of paying more than $30 million in bribes in exchange for contracts and influence. The 76 other company executives who were privy to the corruption scandals have been jailed, but many have agreed to plea deals. They have agreed to provide information for a more lenient sentence. In December 2016, Odebrecht agreed to pay authorities in the US and Switzerland at least $2.6 billion in fines for its corruption and bribery – the largest fine of its kind in the world.At Odebrecht’s peak, around 2010, the company had more than 180 000 employees across 21 countries, with revenues of over $40 billion. After the scandal, in 2016, the revenues were cut to $26 billion, and staff to 80 000.The Odebrecht stock value was sliced due to the decrease in both construction projects and the Brazilian economy. The credit ratings agency Standard and Poor’s cut the company to the lowest rating.The company has overturned two CEOs in two years since Marcelo Odebrecht was jailed.The streets of many countries have been filled with protests over the Odebrecht case, and the events have brought corruption to the top of news headlines and prosecutors’ agendas. Political analyst Geovanny Vicente Romero told the BBC, they are “clamouring for justice”. “Protesters are demanding people be held responsible for the negligence and corruption that are part of the historic inequalities in many of the region’s countries,” he said. “Overall, people hope that the Odebrecht case will set a precedent so that these situations can be avoided in the future.”

Categories: Construction


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