Originally published on Telesur.
Over the last 73 years,
Odebrecht has become the leading construction company in Latin America,
currently active in 27 countries worldwide.
Odebrecht has helped usher in a new era of modern infrastructure
development in the Americas, building state-of-the-art highways in Colombia,
power plants in Dominican Republic, canals and aqueducts in Ecuador, the metro
in Panama City, and hydroelectric plants in Peru. The company’s presence is not limited to
Latin America. Odebrecht has been
awarded high-profile development projects in Africa, Europe, and the Middle
East.
However, few imagined
that behind this successful business empire laid hidden an entrenched
corruption scheme that spread systematically throughout the region with more
force than the Zika virus that has plagued Brazil in recent years. Under the leadership of the founder’s
grandson, Marcelo Odebrecht, one of the largest international corruption
scandals was uncovered upon discovering that Odebrecht used deceitful practices
to award lucrative public works projects in the countries it operated.
A 3-year investigation,
known as “Operation Car Wash” began with an inquiry into illegal payments made
to executives at Petrobras, and ended up tarnishing the popularity of Brazil’s
then-President Dilma Rousseff, implicating congressmen involved in President’s
Rousseff’s controversial impeachment, tainting beloved politician and former
President Lula da Silva, in addition to unraveling a dirty secret behind Odebrecht’s
success. This investigation received its name
because of a nefarious network of car service stations discovered at the
beginning of the probe that were used to divert illegal payments.
On December 21, 2016,
the U.S. Department of Justice published an investigation into Odebrecht, where
the company was accused of paying bribes to public officials from 12 countries
in order to win development contracts. Bloomberg
reported that U.S. Deputy Assistant Attorney General Sung-Hee Suh said, “This
was 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.”
As a result of these
serious accusations, the company agreed to pay a $3.5 billion fine, the largest
bribery fine in history, after being linked to paying $439 million to public
officials from Angola, Argentina, Colombia, Dominican Republic, Ecuador,
Guatemala, Mozambique, Panama, Peru, and Venezuela.
In the beginning of
2016, the Brazilian judge behind Operation Car Wash, Sergio Moro, had filed
various court orders against Odebrecht executives for corruption charges. Judge Moro left the Brazilian government with
no alternative other than reform and reconciliation. As a result of his work, Fortune magazine named Judge Moro among the World’s 50 Greatest
Leaders in 2016.
Brazil
has taken great strides in establishing a higher degree of transparency and
accountability by embarking upon Operation Car Wash, considered the largest
anticorruption investigation in the history of the Americas. The corruption scandal uncovered political
linkages, and in April 2014, the Car Wash Operation consisted of 36 people
summoned for money laundering and forming a criminal organization, while 30
people had been detained, among them the former director of Petrobras, Paulo
Roberto Costa.
Nearly
one year later, in March 2015, Minister of the Federal Supreme Court of Brazil
Teori Zavascki reopened the Operation Carwash investigation into 47 politicians
suspected of becoming involved with Petrobras, among them various congressmen
and senators. The media attention and
corruption accusations made the National Development Bank of Brazil suspend the
disbursement of $3.6 billion that had been approved for 16 infrastructure
projects in Argentina, Dominican Republic, Guatemala, Honduras, Venezuela,
among other countries.
Then, in February 2016,
well-known publicist and political strategist Joao Santana was arrested and
accused of receiving money from Petrobras.
Brazilian authorities detained Santana upon his return from Dominican
Republic, where he was advising the victorious reelection campaign for
Dominican President Danilo Medina.
Santana, a political marketing genius and campaign mastermind, played a
key role in electing six presidents across Latin America, and one president in
Africa. During these election campaigns, Santana leveraged his franchise of
advisory firms, “Polis” which he established in the countries he worked.
Additionally, Joao
Santana had received millions of dollars from Odebrecht to finance and advise
political campaigns in key markets for their business. Moreover, Swiss
authorities sent documents that indicated some transactions could have been
made through a Swiss bank account that Joao and his wife had under the name of
an offshoring company called Shellbill, headquartered in Panama. The arrest of famed publicist Santana, “the
maker of presidents”, affected leaders from Dominican Republic to Angola. This quid-pro-quo scheme revealed the funding
of political campaigns were in exchange for awarding Odebrecht significant
development contracts for infrastructure projects. According to the Brazilian newspaper Folha and Brazilian magazine Veja, Joao and his wife Monica Moura
admitted that $3 million of the $7 million that Santana’s firms received from
Odebrecht were expressly for the advisory services to presidential campaigns in
Argentina, Panama, and other countries.
Similar to Brazil’s
Operation Carwash, other countries in Latin America have begun investigating
the extent of Odebrecht’s corruption schemes in their respective nations. The following is a country-by-country
dashboard analysis and valiant efforts made to hold those involved accountable.
Argentina
Bribes
Paid: $35 million
Fines: 0 Charged: 0 (1 under investigation) Detained:
0
Odebrecht paid more
than $35 million from 2007-2014 to intermediaries, with the knowledge that
these payments would be made, in part, to government officials in Argentina,
according to Argentinean newspaper Infobae.
Argentina Prosecutor Federico Delgado decided to investigate the country’s Director
of the Federal Intelligence Agency Gustavo Arribas, one of President Mauricio
Macri’s closest advisors, to find out if Arribas received $600,000 from
Odebrecht. On February 2, 2017, Arribas claimed his innocence before a
Congressional Bicameral Intelligence Commission.
Colombia
Bribes
Paid: $11 million
Fines: 0 Charged:
2 Detained:
2
According to a report from Colombia’s Attorney General, the Vice
Minister of Transport Gabriel Garcia Morales, from the administration of former
President Alvaro Uribe, has been detained accused of receiving $6.5 million to
guarantee that Odebrecht was selected for the construction of the major highway,
Ruta del Sol, through Colombia. During the years 2009 and 2014,
Odebrecht paid $11 million in bribes throughout Colombia. Former Senator Otto Bula was detained for his
alleged connection to receiving a $4.5 million bribe in order to secure the
contract for the Ocaña-Gamarra highway.
Recently, suspicions emerged about the previous presidential candidate
for the opposition party Democratic Center Oscar Ivan Zuluaga received
financing from Odebrecht for his campaign in Colombia’s 2014 Presidential
election. Recently, Colombian prosecutors have said that they
suspect President Juan Manuel Santos, winner of the 2016 Nobel Peace Prize,
received a bribe from the Brazilian construction firm for his 2014 re-election
campaign.
Dominican
Republic
Bribes
Paid: $92 million
Fines: $184 million Charged:
0 Detained: 0
Second
only to Venezuela, Dominican Republic received the largest amount of bribes
from Odebrecht at $92 million. The
company has been constructing major highways and the Punta Catalina
thermoelectric plant whose contract was awarded on December 9, 2013 in the
amount of the $2.4 billion. The Punta
Catalina Project value was supposedly discounted to $1.9 billion following
public outcry. However, according to
legal documents filed in Dominican courts, for the same thermoelectric plant
construction, a Chinese firm Gezhouba Group submitted a bid to complete the
same project for less than half the cost, $900 million, which is a difference
of $1.1 billion following the supposed discount offered by Odebrecht.
The Punta Catalina
hydroelectric power project will be built to utilize coal power, failing to
take into account that Dominican Republic is a fragile island vulnerable to the
adverse affects of climate change, accelerated by dirty power sources. Despite this large amount of bribes paid in
Dominican Republic, the country has carried out just a few interrogations that
have not led to any formal charges or detentions. In fact, legal action has been limited to
accusations against businessman Angel Rondon as the individual responsible for
receiving $92 million in bribes. Before
the Odebrecht case, little was known about this businessman, but due to this
high-profile scandal, photos and videos have emerged indicating a close
relationship between Rondon and Dominican President Danilo Medina, in addition
to other politicians and the Dominican press.
Among the images, there
is one where the Attorney General of the Dominican Republic Jean Alain
Rodriguez is standing directly behind Rondon during an inauguration
ceremony. Furthermore, on October 27,
2013, President Medina presented Rondon with the Dominican Republic’s national merit
award for breeding livestock. Since the
announcement that Odebrecht will pay the Dominican Republic a $184 million fine,
little has been reported about the case.
On January 22, 2017, Dominican citizens took to the streets with the
largest public march against corruption in the country’s history.
Bribes
Paid: $59 million
Fines: $59 million (initial
guarantee) Charged: 17 Detained: 0
Odebrecht
has a long track record of completed and active development projects in Panama
totaling more than $3 billion, such as the Panama City Metro, Pan-American
Highway, coastal beltway, transmission lines, hydroelectric power plant, and
irrigation systems. Panama’s Attorney
General Kenia Porcell decided to tackle the Odebrecht corruption scandal and
has charged 17 people, among them three former government officials, eight
local businessmen, five foreigners, and an executive from a local bank, after
Switzerland terminated the confidentiality of these clients. Switzerland
revealed to Panamanian authorities the $22 million deposited in bank accounts
of the sons of former Panamanian President Ricardo Martinelli. As a result of these investigations, on
January 28, 2017, Panama notified Odebrecht they would be terminating the
company’s ongoing work on the hydroelectric power plant Chan II. Additionally, Panama’s current President Juan
Carlos Varela agreed to an investigation into his own administration as well as
that of his two predecessors, Martin Torrijos (2004-2009) and Ricardo
Martinelli (2009-2014).
Peru
Bribes:
$29 million Fines: $262 million Charged: 4 Detained:
4
In
Peru, Odebrecht has built large infrastructure projects including a
hydroelectric power plant and hydraulic transfer system linked to $29 million
in bribes. This information was revealed
in the U.S. Department of Justice report covering the management of presidents
Alejandro Toledo (2001-2006), Alan García (2006-2011) y Ollanta Humala
(2011-2016). A former Ministry of
Transport & Communications official during the government of Alan Garcia
has been detained, in addition to the former government official Edwin
Luyo. In addition, the former Vice
Minister of Communications Jorge Cuba, who until recently was a fugitive with
an international warrant for his arrest.
According
to the news agency Andina, Odebrecht
paid $7 million to Luyo and Cuba to gain an unfair advantage on contract
bids. Odebrecht has just paid $262
million as a fine for not completing its construction contract of the gas
pipeline Gasoducto del Sur that the
company was retained to build in Peru.
On February 3, 2017, several developments turned the case around: Jorge
Cuba’s wife, a former professional volleyball player, returned from Miami and
was charged with owning 35 percent of the offshore business Oblong
International, created in Andorra to receive money from Odebrecht. On the same day, Panama’s Attorney General
Kenia Porcell visited Lima to meet with her counterpart about the Odebrecht
case. Moreover, according to the
Peruvian newspaper La República,
former President Alejandro Toledo had received $20 million for awarding major
highway engineering and construction contracts.
It is thought that this money was deposited in the bank account of
Toledo’s friend Josef Maiman. On
February 4, 2017, Peruvian prosecutors raided the house of former president
Alejandro Toledo, and with each passing day, Odebrecht case threatens to
imprison all Peruvian former presidents.
Just What the Doctor Ordered
Finally,
according to Switzerland’s Public Ministry, for each million of dollars that
Odebrecht paid in bribes, the company generated $4 million in profit. Given the lucrative nature of this level of
corruption and the entanglements of virtually all levels of government and the
private sector, the only elixir to cure this regional disease is stronger
democratic institutions throughout Latin America. The widespread investigations
and fines challenging a culture of impunity and its profitability are just what
the doctor ordered to guarantee a greater degree of transparency that can vaccinate
the region from the destabilizing effects of endemic corruption.
Geovanny Vicente Romero is the founder of the
Dominican Republic Center of Public Policy, Leadership and
Development (CPDL-RD). He is a political analyst and lecturer based in
Washington, D.C. Reach him on Twitter @geovannyvicentr
#Odebrecht #PoliticalAnalysis #AnalistaPolitico #GeovannyVicente #PoliticalAnalyst #CPDLRD #Telesur #Telesurtv #GeovannyVicenteRomero
No comments:
Post a Comment