2023 The International Consortium of Investigative Journalists. These payments were made in May and July 2014, several months after Odebrechts financial plan was approved. The company is also one of the biggest donors to politicians in Brazil. But as ICIJs investigation reveals, many public works projects and public figures associated with Odebrechts hidden payments in these countries have been overlooked in criminal prosecutions to date. Families like these, said Pimentel, of Participacin Ciudadana, are the true victims of the kind of corruption practiced by Odebrecht. Braskem has denied however any corruption in Mexico, saying the contract resulted from an international bidding. American prosecutors say Odebrecht paid $33.5 million in bribes in Ecuador as part of a worldwide scheme to win business. Pedro van Langendonck, Braskems CFO, said on Nov. 13 that Braskem has been providing information to its owners, according to a transcript of the company last earnings call published by Yahoo Finance. Among the witnesses interviewed was Dauhajre. Odebrecht executives have confessed to paying bribes in exchange for contracts not only in Brazil, but in various parts of the world. One catch is that the countries must agree not to prosecute Odebrecht executives who already made plea deals with Brazil. The scale of Odebrechts bribery operation became such that in 2006 the company created a specialized unit to manage it. In April 2017, a U.S. judge ordered Odebrecht to pay $2.6 billion in fines, with about $93 million going to the U.S., $2.39 billion to Brazil and $116 million to Switzerland. Odebrecht employees and bribe recipients are referred to only by code names, many of which have yet to be cracked. Seventy-seven company executives agreed to plea bargains with Brazilian authorities, and their statements to investigators were made public. In an audio recording played on the Peruvian news program Panorama, Galarza appears to plot the assassination of his boss, the Callao governor, Dante Mandriotti. Bidding successfully for blockbuster projects including the $7 billion gas pipeline in Peru, the $2 billion Dominican coal-fired power plant and the $2 billion subway system in Quito Odebrecht solidified its status as the dominant contractor in Latin America and became one of the largest contractors in the world. On June 17, Odebrecht announced it was filing for bankruptcy protection to restructure $13 billion in debt. The BBC is not responsible for the content of external sites. These discoveries were made in a fresh trove of leaked records from an Odebrecht division created primarily to manage the companys bribes. [22], According to a 2021 study, "Odebrecht paid bribes for two reasons: to tailor the terms of the auction in its favor, as well as to obtain favorable terms in contract renegotiations. The scandal came to light in 2014 with Brazils Operation Car Wash (Operao Lava Jato) investigation into money laundering, bribery and bid-rigging in connection with public works contracts awarded at inflated prices in a dozen countries. There also are spreadsheets that track the bribery divisions payments. While bribe beneficiaries were almost all in Latin America, the payments invariably flowed through a secretive archipelago of offshore shell companies and bank accounts. All those mentioned in the statements have strongly denied any wrongdoing, and have accused Odebrecht executives of lying. Bribery Division: What is Odebrecht? Odebrecht said its total debt reaches 98.5 billion reais, including intercompany loans and debt that is not subjected to in-court restructuring. In April, the company missed a $144 million debt payment on offshore bonds because of trouble getting further credit. That is what the Odebrecht case has left.. The files obtained by La Posta and ICIJ contain more than 13,000 documents that had been stored by this division on a secret communications platform known as Drousys. This second pipeline, Galarza said, was a private project also led by Odebrecht. A Panamanian company, CGZ Ingenieria Corp., received in late 2014 two payments totaling $240,000 related to a Peruvian gas pipeline, Drousys records show. Hiroko Masuike/The New York Times. An international taskforce of investigators is looking into bribery in 10 countries, including Argentina, Colombia, Ecuador, Peru and Venezuela. Braskem S.A. Produces raw materials in an integrated fashion, including ethane. However, not all payments by the division were bribes, the company has said. It is hard for investigators to determine whether those arrested are actually confessing to real crimes, or whether they are telling a story that prosecutors want to hear in exchange for shorter prison sentences. They need to put a lot of bullets in him, Galarza says in the recording. Dauhajre told ICIJ that the payments he received from Odebrecht were for consulting services that he provided in connection to the financing of the power plant. When Odebrechts international bribery was exposed, local prosecutors launched an investigation into whether the companys work on the Quito Metro had been tainted by bribes. Read about our approach to external linking. Prosecutors in Callao indicated that they will investigate the matter. Operation Car Wash, an ongoing investigation by the Federal Police of Brazil, began as a money-laundering probe and quickly expanded to examine corruption connected to Brazils state oil company, Petrleo Brasileiro S.A., or Petrobras, a multinational. The corruption investigations leading to the 2016 accord had started in Brazil with probes of Petrobras officials over the acceptance of bribes in exchange for contracts with private companies, including Odebrecht. The supposed overvaluation of Punta Catalina is the best-marketed lie in the Dominican Republic in recent years, Dauhajre wrote in his column in El Caribe, one of several pieces in which he publicly defended the power plant and its financing. Odebrecht has entered into cooperation agreements with authorities in Brazil, the United States, Switzerland, the Dominican Republic, Panama, Ecuador and Guatemala. Odebrecht Infraestrutura (infrastructure) Completes important projects in the transport. A Peruvian prosecutor indicted Humala and his wife, Nadine Heredia, in May for allegedly laundering assets provided by Odebrecht. These tenets include Education through Work, Partnership among Members and Trust in People. Prosecutors said the Odebrecht case was a landmark in the fight against public corruption in Latin America and globally. Secret files from this unit formed the basis of the International Consortium of Investigative Journalists investigation. In April 2019, police carrying an Odebrecht-related arrest warrant arrived at the door of Humalas predecessor, former two-term Peruvian President Alan Garcia. The bespectacled, silver-templed economist writes a weekly column in the newspaper El Caribe. In recent years, the Odebrecht scandal has brought protesters into the streets across Latin America, occupied countless prosecutors, filled courtrooms and destroyed storied careers after generating billions of dollars in ill-gotten gains. Based on the December 29, 2017, exchange rate, the companys 2017 revenues amounted to $24.75 billion. Odeprev Designs and operates supplementary pension plans for Odebrecht Organization members, preparing them for retirement. [17][18] Under the Humala administration Odebrecht received contracts worth US$152million, in addition to the $7.3billion Southern Gas Pipeline project and $60million in contracts with regional governments in Peru. Seventeen payments totaling more than $3 million related to a Peruvian gas pipeline. The global lactic acid market size is estimated at $1.1 billion in 2020 and projected to reach $2.1 billion by 2025. Maybe there's some niche application that could work where they want to take advantage of some of the government subsidies around credits, etc. Federao das Indstrias do Estado de So Paulo, "Billionaire Odebrecht in Brazil scandal released to house arrest", "With Arrest of Marcelo Odebrecht, Brazil's Corruption Probe Moves to the Penthouse", "Petrobras scandal: Top construction bosses arrested in Brazil", "S&P Downgrades Debt of Odebrecht Construction Unit Following Arrests", "Former Odebrecht CEO sentenced in Brazil kickback case", "Brazil Petrobras scandal: Tycoon Marcelo Odebrecht jailed", "Paradise Papers: Salen a la luz 17 offshore de Odebrecht y al menos una se us para sobornos", "STF reduz pena de Marcelo Odebrecht, que fica livre no fim do ano", "STF reduz pena imposta a Marcelo Odebrecht em acordo de delao premiada", "STF reduz pena de Marcelo Odebrecht, que pode ficar livre no fim do ano", https://en.wikipedia.org/w/index.php?title=Marcelo_Odebrecht&oldid=1147669184, Pages containing links to subscription-only content, CS1 Brazilian Portuguese-language sources (pt-br), Wikipedia articles in need of updating from July 2020, All Wikipedia articles in need of updating, Articles with unsourced statements from July 2020, Articles containing Portuguese-language text, Creative Commons Attribution-ShareAlike License 3.0, House arrest after 2 years and six months in prison, This page was last edited on 1 April 2023, at 12:19. The Punta Catalina project immediately fell under suspicion. But Odebrechts confession didnt tell the whole story. Together, we expose wrongdoing so that the world can make it right. This investigation detailed how Odebrecht would have made bribes to presidents, former presidents and government officials of 12 countries: Angola, Argentina, Brazil, Colombia, Ecuador, United States, Guatemala, Mexico, Mozambique, Panama, Peru, Dominican Republic and Venezuela, during the last 20 years, to obtain benefits in public contracting.[43]. Odebrecht Engenharia Industrial (industrial engineering) Constructs and assembles industrial facilities in Brazil and abroad, serving clients from a range of different sectors. See here for a complete list of exchanges and delays. The Structured Operations Divisions reach extended across Latin America. The documents include frank and explicit discussions about how to ensure the secrecy of the system. Odebrecht S.A. (Odebrecht), a global construction conglomerate based in Under protection from creditors, with a debt pile of almost R$100 billion, North America & Beyond 2020 Downstream Market Outlook Report, Critical Intelligence for Downstream Sales, Marketing, & Business Leaders 2019, Process Engineering Trends and Outlook 2019, US Petrochemical Supply Chain & Logistics Solutions Whitepaper, Best Practice - Integration of Capital Projects into Turnarounds, The latest on Northeast Petrochemical Economic Development, Petrochemical Producers Supply Chain & Logistics 2018/2019 Spending Survey, Webinar: Interface Management for Downstream Capital Projects, US Ethylene Complex Construction Costs Data 2018-2020, Achieving Operational Excellence - Maintenance and Turnarounds, US North East Petrochemicals Outlook 2018, US Downstream Capital Projects, Turnarounds & Maintenance Market Outlook 2018, US Downstream Engineering, Construction & Maintenance Market Outlook 2017, Engaging Millennials in the Petrochemical Work Force, Gearing Up for Petrochemical Export Growth in North America, Petrochemical Metrics for Process & Personal Safety, Driving Efficiency in Front-End Planning for Modular Projects, New O&M Strategies for Improving the Performance of Petrochemical Plant Assets, Challenges Facing Refining Capital Projects in Today's Project Environment, Workforce - Perfect Storm of Supply and Demand, Managing Risk Between Owners and Contractors. America is now two years into abnormally high Prosecution statements and court documents show that the division functioned as a stand-alone bribery unit within Odebrecht. SAO PAULO (Reuters) - Brazilian conglomerate Odebrecht SA filed on Monday for bankruptcy protection, aiming to restructure 51 billion reais ($13 billion) of debt in what would be one of Latin Americas largest-ever in-court debt restructurings. Mexican President Andres Manuel Lopez Obrador has cited Odebrechts past history, and said the contract's pricing terms, and penalties for failure to deliver, were unfair to Mexicans and possibly involved corruption. Its not clear why hidden payments found in Drousys documents have not come to light in public investigations. Galarza, whose initials are CGZ, is the president and a director of CGZ Ingenieria, according to records from the Panamanian Corporate Registry. Is climate change killing Australian wine? Odebrecht Administradora e Corretora de Seguros Ltda. BEIJING China said on Tuesday What has the company done that is illegal? All rights reserved. CGZ Ingenieria offers support services in engineering, business intelligence, and legal, financial and institutional relations, and has offices in Lima, Panama, Colombia and Madrid, Galarzas LinkedIn page states. But one thing is clear: The divisions Drousys files contain the names of prominent figures in positions of trust who have never been openly questioned about their relationships to Odebrecht until now. Former Salvadoran President Mauricio Funes is suspected of embezzling $351 million. Poor countries are focused on food and Get our stories by email. Protects the assets of shareholders by identifying, mitigating and managing risks. ICIJ is dedicated to ensuring all reports we publish are accurate. Most populous nation: Should India rejoice or panic? The Gasoducto Sur, a gas pipeline in southern Peru and the most prominent project of former Peruvian President Ollanta Humalas administration, is mentioned in connection with 17 payments in 2014 totaling more than $3 million. Help us change the world. The files show a payment of $200,000 in January 2014 to a Panamanian company called El Facilitador Holdings, related to a public works project referred to as LE LM in the units files. He was part of a delegation of business leaders that accompanied Dominican President Danilo Medina on a state visit to China in November. In the Dominican Republic, anti-corruption protesters in the Movimiento Verde (green movement) demanded an end to impunity for politicians entangled with Odebrecht. In December 2016, Odebrecht signed a leniency deal with authorities in the US and Switzerland, agreeing to pay $2.6bn in fines for its past mistakes - the largest sum of its kind in the world. The U.S. Gulf Coast will see the first wave of petrochemical projects begin operations in 2017 and learnings on areas such as feedstock availability and operating margins are spurring strategic decisions on a second wave of construction, analysts told Petrochemical Update. The Bribery Division, a new investigation led by the International Consortium of Investigative Journalists, reveals that Odebrechts cash-for-contracts operation was even bigger than the company has acknowledged, and involved prominent figures and massive public works projects not mentioned in the criminal cases or other official inquiries to date. Operators and co-conspirators discussed bribes using secure emails, code names and passwords. This does not mean that all of them involved corruption or bribes.. Braskem also has a majority stake in an ethylene-polyethylene complex in Mexico completed about five years ago that in early December was forced to abruptly shut down as Mexican officials cut natural deliveries amid a dispute with the Mexican government over an ethane supply contract. In 2016, the Brazilian-based group signed what has been described as the world's largest leniency deal with US and Swiss authorities, in which it confessed to corruption and paid $2.6bn (2.1bn) in fines. Odebrecht SA's historic $3.6 billion bribery settlement came together just Please help update this article to reflect recent events or newly available information. The files include spreadsheets tracking hidden payments, statements from offshore bank accounts, emails, transaction records, contracts and computer logs. From a small family firm founded in Salvador, Bahia, by Norberto Odebrecht in 1944, Odebrecht S.A. has grown into a multinational with almost 200,000 employees. April 27, 2023, 5:00 a.m. In September 2018, Petrobras agreed to pay an $853.2 million fine in a deal with the U.S. Department of Justice to settle charges that former executives and directors of the company broke U.S. anti-corruption laws by paying and seeking to conceal bribes. Police said they had evidence that Lula, 70, received illicit benefits from the kickback scheme. Revelations about illegal payments have toppled governments in Brazil and Peru and led to the imprisonment of former presidents of both countries. 1730 Rhode Island Ave NW, Suite 317 The past, however, still haunts Odebrecht. The breakthrough: In Brazil, Operation Lava Jato revealed criminal schemes [30], The attorney-general of Panama has announced that 43 people suspected of involvement in the bribery scandal. The room was hot. The name Odebrecht has become shorthand for an unprecedented regional bribery scandal. Braskem separately said on December 22 that it renewed with Petrobras contracts for the delivery of naphtha and ethane for its plants in Sao Paulo and Rio de Janeiro, all to be priced based on international references., Green methanol still in very early stages to become viable. The 350p-a-share take-out price may well represent a 72% premium to the Sugar and ethanol subsidiary Atvos Agroindustrial Participacoes SA, which already filed for a separate bankruptcy protection, is also excluded. The ledgers of Odebrechts Structured Operations unit show dozens of payments that appear to have eluded investigators, who did not have access to the records obtained by ICIJ. But, it turns out, the sweeping deal with Brazil, U.S., and Switzerland had some significant limits. Odebrecht expanded from its construction roots into one of Brazils biggest conglomerates but began its fall from grace in 2014, when it became a principal target of the countrys largest-ever corruption probe. Brazilian state oil company Petrobras started an arbitration against Odebrechts system of corruption was finally brought down by Brazilian The first allowed internal communication within Odebrecht and also with outside financial operators. But that's not a way to build a business, he added. The president and a director of El Facilitador is a Salvadoran radio executive, Jose Luis Saca. Odebrecht Venezuela Invests and completes projects in the infrastructure, real estate, industrial, oil and gas, petrochemical and food security sectors in the country. Pimentel, the anti-corruption activist, said Dominican prosecutors failure to pursue wrongdoing in projects such as Punta Catalina represents a failure of political will in a country where political and economic elites are closely intertwined. [19] Lula was charged with money laundering and corruption and after his appeal was unsuccessful was arrested in 2018. Still as Odebrecht, the group filed for judicial recovery in 2019, with a debt of almost R$100 billion. In Panama, the countrys first ever rapid-transit system, in Panama City, and an expansion of the citys airport, Tocumen International, are linked for the first time to millions of dollars in hidden payments made in 2014. Among those slated to receive payment was a company owned by a Peruvian politician who, in an unrelated recording recently aired by a local news station, appeared to plot the assassination of a rival. The U.S. investigated Odebrecht because the company was suspected of making illicit payments from bank accounts in New York City and because meetings were held in Miami. In Brazil, the epicenter of the scandal, former two-term president Luiz Incio Lula da Silva, once described by Barack Obama as the most popular politician on earth, sits in prison serving a lengthy sentence for corruption and graft, including Odebrecht-related offenses. As bribery investigations were galloping in the United States and globally, In June 2015, the group's chief executive, Marcelo Odebrecht, the grandson of its founder, was arrested. It's not a brand many outside Latin America will recognise, but Grupo Odebrecht is the region's largest construction conglomerate. The records dont say who received the secret payments or their purpose.