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Brazil gov’t signs leniency deal with Odebrecht

The construction giant is to pay $698 million for money embezzlement

Published in 10/07/2018 - 16:16

By Leandro Melito Brasília

Brazil’s Attorney-General’s Office (AGU) and the Comptroller-General’s Office (CGU) signed a leniency deal with construction giant Odebrecht for the embezzlement of funds from the federal government as well as state-controlled companies Monday (Jul. 9).

The agreement is classified and mandates that $698 million should be paid to the federal government over the course of 22 years. The installments will be set according to the country’s benchmark interest rate Selic, and may reach $1.7 billion by the end of the term, according to government estimates.

A leniency deal is signed with the firm that committed an offense against public administration,  but agrees to cooperate with investigators. The first payment, $15.51 million was paid Monday (9), and the amount is expected to reach a yearly $41 million by 2039.

A total of 40 Odebrecht public contracts were taken into account in establishing the sum of reparations—in 38 of them some sort of fraud was found to secure their execution, with bribery reported in the remaining contracts. The leniency accord is linked to the federal government only; state and city governments were not considered in the calculation.

Of the overall value to be paid, some $232.61 million is to be paid for the bribery of 150 public officials—civil servants and politicians—$336 million is linked to profit stemming from contracts where bribery was detected, and $114.24 million is to be paid as fine.

Proceedings dropped

Attorney-General Grace Mendonça said the cases filed by her office against Odebrecht will be dropped, adding, however, that the probes targeting other companies involved will continue. “The proceedings lodged in connection with the facts covered by the leniency deal are now part of a list of matters to be dismissed. The legal proceedings will be brought to an end, and the limitations imposed on the firm’s right to take part in public bidding abolished,” Mendonça said.

Petrobras—one Brazil’s state-run companies harmed by deals inked with Odebrecht and brought to light by the Federal Police as part of Operation Car Wash—has once again included the construction company on its list of suppliers.

The leniency deal will be submitted to the Court of Federal Accounts (TCU), with the condition that the court authorities agree not to punish Odebrecht for the contents of the deal, said CGU head Minister Wagner Rosário.

Translation: Fabrício Ferreira Edition: Amanda Cieglinski / Nira Foster

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