Odebrecht Says It Is Ready to Testify in Brazil’s Petrobras Probe
Firm says its ex-CEO, other jailed executives are prepared to turn state’s evidence in massive corruption investigation
SÃO PAULO—Jailed billionaire construction mogul Marcelo Odebrecht is ready to turn state’s evidence in a massive Brazilian corruption probe that threatens to upend the government of President Dilma Rousseff and land her predecessor Luiz Inácio Lula da Silva in jail.
Brazilian construction giant Odebrecht SA on Wednesday confirmed that Mr. Odebrecht, its former chief executive, and other company employees are prepared to tell prosecutors what they know about a supplier cartel that siphoned billions from Brazil’s state oil company and channeled it into the pockets of crooked politicians.
Prosecutors say graft was so systematic at Odebrecht that the company set up a special department dedicated solely to keeping track of the bribes and their recipients.
The allegation of such scrupulous bookkeeping is haunting the company and sending shock waves through Brazil’s political establishment. On Wednesday, local media published a list of around 200 politicians who allegedly took payments from Odebrecht.
The press outlets said they obtained the names from a company document posted on a court website. A judge in charge of the case later removed the document from the site and it isn’t clear whether the payments were legal donations or not. But the damage had already been done.
“The Doomsday Plea Bargain,” screamed a Wednesday headline on the website of the São Paulo daily Folha de S. Paulo.
Ms. Rousseff and Mr. da Silva have denied wrongdoing.
The prospect of even more detailed testimony from Mr. Odebrecht, who this month was sentenced to 19 years in prison for his role in the scheme, could prove devastating for Brazil’s government, deepening a crisis that could topple Ms. Rousseff and Mr. da Silva, whose legal woes stem from alleged connections to the construction firm.
“It will be like a hydrogen bomb,” said David Fleischer, a University of Brasília political-science professor. “They should have all the spreadsheets of where bribes were deposited and in whose names.”
Late on Wednesday, however, prosecutors from the southern of city of Curtiba, where the so-called Operation Car Wash probe is based, distanced themselves from Odebrecht’s declaration of a potential agreement. In a statement, authorities said they weren’t negotiating with the company, and chastised it for going public with its willingness to strike a deal.
“The revelation via the press…damages the negotiating secrecy required by law to reach an agreement,” the prosecutors said.
Prosecutors say at least 6.4 billion reais (about $1.7 billion) was diverted from state oil company Petróleo Brasileiro SA, or Petrobras, through inflated supplier contracts, some of which allegedly flowed as illegal campaign contributions and bribes to the ruling Workers’ Party and its allies. The parties deny the allegations.
An Odebrecht spokeswoman confirmed that Mr. Odebrecht, other jailed former executives and other company employees were available to collaborate with Operation Car Wash prosecutors, but declined to give further details.
In an earlier statement on Tuesday, Odebrecht said “we don’t have the dominant responsibility” for Brazil’s “illegal and illegitimate system of party-electoral financing.” Odebrecht also indicated it was out to save the jobs of its 130,000 global employees.
Some legal experts said the construction giant is signaling it won’t take the fall for corrupt politicians and will do whatever it takes to save the company, which has been badly damaged by the scandal. The most valuable thing Odebrecht has to offer authorities, observers said, is testimony from Mr. Odebrecht, who is described by prosecutors as one of the masterminds of the supplier cartel.
“Odebrecht’s note shows it’s going to hand over all the facts,” said Pierre Moreau, a São Paulo-based attorney. “Marcelo has more information to give than other people, so it’s hard to believe his plea bargain wouldn’t be approved.”
News of Odebrecht’s collaboration comes amid many arrests and plea bargains that have dominated headlines here and kept Brazil on edge for months. Prosecutors have acknowledged 49 such agreements with individuals and five leniency deals with companies, with several more in the works.
With so many suspects turning state’s evidence in exchange for leniency, the window is closing for other defendants to provide prosecutors with information deemed valuable enough to warrant a plea deal. That appears to be spurring a flurry of testimony, propelling the probe ever closer to Ms. Rousseff and Mr. da Silva.
Last week, Brazil’s Supreme Court released plea-bargain testimony from a powerful Workers’ Party senator ensnared in the Car Wash scandal who implicated Ms. Rousseff and Mr. da Silva. Both denied the allegations that they knew about the graft ring and tried to obstruct the criminal probe.
Information from Odebrecht about allegedly illicit campaign donations could prove damaging for Ms. Rousseff, who has been dogged by accusations that dirty money funded her re-election. An electoral court is currently investigating the source of her campaign financing; it could annul the 2014 results and order up new elections if it finds wrongdoing. Ms. Rousseff has denied the dirty-money allegations.
Odebrecht also figures prominently in the legal troubles of Mr. da Silva, who was president of Brazil from 2003 to 2010. Prosecutors are investigating large donations made by Odebrecht to Mr. da Silva’s Instituto Lula, a nonprofit São Paulo foundation, which they suspect was a conduit for illegal campaign contributions to the Workers’ Party.
Prosecutors also say Mr. da Silva illegally benefited from extensive renovations made by Odebrecht to a country ranch used frequently by the former president and his family.
Mr. da Silva and the Instituto Lula have denied wrongdoing. A spokesman for the foundation said Mr. da Silva is “tranquil” following news of a potential plea bargain by Mr. Odebrecht because the former president “has always acted in accordance with the law.”
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Originally Posted by AngryCanadian
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