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Odebrecht corruption scandal hits across Latin America

Editor: Zhang Jianfeng 丨Xinhua

02-13-2017 07:12 BJT

RIO DE JANEIRO, Feb. 12 (Xinhua) -- Odebrecht, the largest construction firm in Latin America, is at the eye of a maelstrom of corruption, bribery and influence peddling, which has transcended the borders of Brazil to reach across the continent.

The company, which has already fired around 100,000 of its 180,000 staff in 28 countries, first came under investigation by the Brazilian judiciary as part of Operation Lava Jato (Car Wash), which unveiled the gigantic corruption ring within state oil company Petrobras.

In June 2015, federal police arrested the firm's president, Marcelo Odebrecht, who was later condemned to nine years in prison. The company also agreed to pay over 3.5 billion U.S. dollars in fines in Brazil, the U.S. and Switzerland.

However, the opening of an investigation by the U.S. Department of Justice (DOJ) and the confessions of 77 company executives pulled back the curtain on corruption links extending to Peru, Mexico and Colombia.

"We are facing a unique case," said Tomaz Paoliello, a professor of international relations at the Pontifical Catholic University of Sao Paulo.

"This is unprecedented as previous similar cases in Central and South America happened with the involvement of American or European companies," he told Xinhua.

The Odebrecht case has also happened against a backdrop of internationalization for major Brazilian firms, including mining company Vale, bank Itau and Petrobras itself.

"Since the 1970s, the image of Odebrecht has been closely linked to that of the Brazilian government," said Paoliello, stating that this case could also show "a corrupt executive," which might have helped the company's illegal practices.

The DOJ announced that, among other facts, Odebrecht had paid 35.5 million U.S. dollars in bribes to Ecuadorian politicians between 2007 and 2016, in return for profits of over 116 million U.S. dollars in the country.

In Argentina, allegations have been made of bribes, not only during the 13 years in power of Nestor and Cristina Kirchner, but also to an associate of current President Mauricio Macri.

Investigations by the Argentinian judiciary have shown that Odebrecht paid 35 million U.S. dollars in bribes to the Kirchner governments, in order to access contracts valued at 278 million U.S. dollars.

In parallel, Gustavo Arribas, the current head of the Argentinean Federal Intelligence Agency and a close friend of Macri, is having to explain why he received a bank transfer worth 600,000 U.S. dollars from Odebrecht intermediaries.

In Peru, an arrest warrant has been issued against former president, Alejandro Toledo, who is accused of receiving 20 million U.S. dollars in bribes.

Former president, Ollanta Humala, is also facing accusations of money laundering during his electoral campaign, including 3 million U.S. dollars from Odebrecht.

In Colombia, the controversy involves the current government of President Juan Manuel Santos and his predecessor, Alvaro Uribe.

Gabriel Garcia Morales, who was deputy transport minister under Uribe, has been arrested on charges of having received 6.5 million U.S. dollars from the construction firm.

Furthermore, the Colombian prosecutor-general is looking into whether Santos' electoral campaign benefited from 11 million U.S. dollars that Odebrecht executives have admitted paying in bribes between 2009 and 2014.

In Mexico, Odebrecht staff have admitted paying 10.5 million U.S. dollars in bribes to officials from a state-owned enterprise in order to secure public works. However, the name of the enterprise in question has not been revealed.

In Brazil, where the scandal originated, Paoliello said that "political, economic and judicial" repercussions have already been felt. According to the academic, accusations of bribery from Odebrecht had "great impact" on the impeachment process that brought down former President Dilma Rousseff.

Furthermore, the confessions by 77 senior executives from Odebrecht have also pointed the finger at over 200 politicians across the party spectrum.

"Brazil is seeing many internal attacks for the investigations to diminish," explained Paoliello, and that the accusations against politicians would depend on many factors, including the capacity to impose punishments, the impact and credibility of the accusations.

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