Yahoo – AFP,
Heather Scott, with Sebastian Smith in Rio de Janeiro, December 22, 2016
Washington (AFP) - Scandal-plagued Brazilian construction giant Odebrecht and petrochemical affiliate Braskem have agreed to pay a record $3.5 billion to settle a vast international bribery case, US officials said.
Brazilian construction company Odebrecht pled guilty to paying hundreds of millions to bribe government officials in countries on three continents (AFP Photo/YASUYOSHI CHIBA) |
Washington (AFP) - Scandal-plagued Brazilian construction giant Odebrecht and petrochemical affiliate Braskem have agreed to pay a record $3.5 billion to settle a vast international bribery case, US officials said.
Odebrecht,
a key player in the Petrobras corruption scandal gripping Brazil, agreed to a
fine of $4.5 billion but said it was only able to pay $2.6 billion, the US
Justice Department said in a statement. Braskem, meanwhile, will pay $957
million.
The fines
are to be paid to Brazilian, Swiss and US authorities, the department said,
calling it "the largest-ever global foreign bribery resolution."
It is the
latest in a string of terrible headlines for Odebrecht, which Brazilian
investigators say was one of the ringleaders of a scheme to plunder billions of
dollars from state oil company Petrobras.
Revelation
of the scandal has rocked Brazil's political and business establishment to its
foundations, with ex-president Luiz Inacio Lula da Silva facing trial and
current President Michel Temer reportedly under suspicion.
The bribery
case settled Wednesday includes the Petrobras allegations, but is even bigger.
The
Odebrecht conglomerate pleaded guilty to bribing government officials and
political parties to the tune of $788 million to secure business on three
continents -- mostly in Brazil, but also 11 other countries in Latin America
and Africa.
"Odebrecht
and Braskem used a hidden but fully functioning Odebrecht business unit -- a
'Department of Bribery,' so to speak -- that systematically paid hundreds of
millions of dollars to corrupt government officials in countries on three
continents," US Deputy Assistant Attorney General Sung-Hee Suh said in a
statement.
"Such
brazen wrongdoing calls for a strong response from law enforcement, and through
a strong effort with our colleagues in Brazil and Switzerland, we have seen
just that."
Political
fallout
In the main
scheme, Odebrecht targeted top Brazilian politicians and executives at
Petrobras for more than a decade starting in about 2001. The bribes were used
to secure inflated contracts and even get favorable legislation passed in
Congress.
Suh praised
Brazil's judiciary for tackling the issue head on.
"I
cannot praise their efforts enough. They have been under enormous pressure,
done an extraordinary job of initiating the investigation and carrying it
through," she said.
The
Brazilian probe, known by its codename Operation Carwash, has cast dark shadows
over two of Brazil's most important companies, Petrobras and Odebrecht, adding
to economic pain as the country flounders in deep recession.
Odebrecht's
jailed boss Marcelo Odebrecht and 76 other current and former executives have
signed plea deals agreeing to tell all in exchange for lighter sentences.
The
Brazilian press has described the deal as potentially apocalyptic for the
political establishment.
Panama,
meanwhile, said it would request information from the United States about
alleged Odebrecht bribes paid in Panama to secure contracts, its foreign
ministry said.
Shattered
record
The
previous record bribery settlement was $1.6 billion for German engineering
group Siemens in 2008. It settled charges of systematically using bribes and
slush funds to land public works contracts around the world.
Margarida
Gutierrez, an economist at the Federal University of Rio de Janeiro, told AFP
that this settlement, Odebrecht's newest move to come clean, would open the
door for its return to the market.
"Right
now they are unable to participate in any bids in Brazil or probably out of
Brazil," she said. "Now they can start again, and try to clear their
name. They will succeed but it will be hard."
The US
Justice Department will conduct an "inability to pay analysis" by
March 31 to determine the final amount that Odebrecht must come up with.
Sentencing has been scheduled for April 17.
Under the
plea agreement, Brazil will receive 80 percent of Odebrecht's fines, while the
United States and Switzerland will garner 10 percent each.
Braskem,
which is traded on the New York Stock Exchange through American Depositary
Receipts (ADR), saw its shares soar after the deal was announced, closing up
four percent.
It will pay
a criminal fine of $632 million, and another $325 million penalty to the US
Securities and Exchange Commission.
Under the
Braskem deal, Brazil will receive 70 percent of the fines, while US and Swiss
authorities receive 15 percent. Sentencing for the firm has not yet been
scheduled.
Brazil's Odebrecht, Braskem pay record fine in bribery case https://t.co/Wn8k2rgyX2 pic.twitter.com/RM9Shs8gzG— AFP news agency (@AFP) December 22, 2016