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. This cooperation has helped produce a steady drumbeat of criminal charges across Latin America against politicians and others who conspired with Odebrecht. The Brazilian construction company admitted to bribing Latin American officials for decades in exchange for contracts. The Dominican Republic is one of a half-dozen countries in which major infrastructure projects are tied for the first time to Odebrechts corruption. Odebrecht S.A. is a holding company for Construtora Norberto Odebrecht S.A., the biggest engineering and contracting company in Latin America, and Braskem, the largest petrochemicals producer in Latin America and one of Brazil's five largest private-sector manufacturing companies. Still prevalent money myths: BT Money Hacks (Ep 142) 00:00 / 16:55. Shruti Shah, Coalition for Integrity. We order you to deposit to the Public Prosecutors Office any documents that support your statements., (ICIJs policy is not to collaborate or share materials with law enforcement agencies.). Odebrecht has entered into cooperation agreements with authorities in Brazil, the United States, Switzerland, the Dominican Republic, Panama, Ecuador and Guatemala. Odebrecht benefited from close ties to the influential Brazilian President da Silva, whose administration tapped the company to carry out infrastructure projects that were part of his ambitious anti-poverty and development agenda. Fred replied in the affirmative. Gabriel Garca, former Colombian minister of Transportation during the government of, No. However, not all payments by the division were bribes, the company has said. The documents also provide a window into a system of public corruption so entrenched and so far-reaching that it entangled politicians and business leaders as well as known criminals who were already being pursued by the law. Its detailed statement of facts, for instance, discloses how much the company had paid overall in bribes across the region, but it doesnt specify which projects were the subject of the payoffs or who had received them. Together, we expose wrongdoing so that the world can make it right. [23] Prime Minister Gaston Browne denied receiving a bribe from Odebrecht in January 2016. 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. Under protection from creditors, with a debt pile of almost R$100 billion, Former presidents and other senior officials, along with Odebrecht executives, went from the halls of power to prison cells. Using a complex network of shell companies, off-book transactions and offshore bank accounts, and a dedicated bribery division, Odebrecht paid more than $780 million in bribes to government officials, their representatives and political parties in countries across Latin America and the Caribbean. As part of the mandatory disclosures, Odebrecht handed prosecutors documents including spreadsheets tracking hidden payments, statements from offshore bank accounts, emails, transaction records, contracts and computer logs, all stored on its Drousys system. This does not mean that all of them involved corruption or bribes.. In June 2015, the group's chief executive, Marcelo Odebrecht, the grandson of its founder, was arrested. 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. The leaked Drousys files include other secret payments related to projects that so far have not been connected to the Odebrecht scandal. The division reported to the companys highest levels. In an initial telephone conversation with an ICIJ journalist on June 21, Galarza denied any business dealings connected to Odebrecht or the Gasoducto Sur pipeline. 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. Prosecutors in Callao indicated that they will investigate the matter. He said that while some parts of the recording were authentic, he said that other sections of the recording were false and likely manipulated. The Metro payment was also made through Meinl, Fred wrote in an email to Silver. The Fed has raised its policy rate by 475 basis points since March of last These payments were made in May and July 2014, several months after Odebrechts financial plan was approved. Mifepristone will remain largely unavailable in 13 states that have completely banned abortion. Sugar and ethanol subsidiary Atvos Agroindustrial Participacoes SA, which already filed for a separate bankruptcy protection, is also excluded. The most explosive statements came from the former boss, Marcelo Odebrecht, who said that part of the $48m he donated to Dilma Rousseff and Michel Temer's campaign in the 2014 Brazilian presidential election was illegal. [3] Between 20012016, Odebrecht paid USD $788 million in bribes across Latin America. But much depends on whether governments have the resources to investigate and prosecute these crimes and, analysts say, whether they have the political will. Dauhajre said Odebrecht retained his services in early 2014 after one of the key funders expected to underwrite the project, the ExportImport Bank of the United States, pulled out due to a directive by then-U.S. President Obama not to finance coal-fired power plants due to their contributions to climate change. Get our stories by email. Ecuador waits for knife-edge election result, Russia troop deaths hit 20,000 in five months - US, AI bots 'may soon be more intelligent than us', France May Day protests leave dozens of police injured, 'My wife and six children joined Kenya starvation cult', On board the worlds last surviving turntable ferry. The Punta Catalina project immediately fell under suspicion. Green methanol is nowhere close to becoming a viable alternative to its fossil fuel-based version because production costs are much higher than what the market would pay, the top official of the worlds biggest methanol producer said. All those mentioned in the statements have strongly denied any wrongdoing, and have accused Odebrecht executives of lying. New York City records of the sale include a deed signed by Baker Street Financials sole director: Andrs Dauhajre. It grew quickly and at its peak, around 2010, the company had 181,000 employees across 21 countries. We also find that bribes and profits made from bribing were smaller than documented in most previous studies, in the range of one to two percent of the cost of a project. Peruvian President Martin Vizcarra and three former presidents, Pedro Pablo Kuczynski, Ollanta Humala and Alejandro Toledo, are all under investigation in connection with the Odebrecht scandal. Secret files from this unit formed the basis of the International Consortium of Investigative Journalists investigation. To win the contract, Odebrecht still needed to have its economic offer and financing plan approved. 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. Odebrechts system of corruption was finally brought down by Brazilian prosecutors in the famous anti-corruption investigation called Operation Car Wash. Odebrechts construction unit OEC is in talks to restructure $3 billion of debt with bondholders. [7] On 8 March 2016, he was sentenced to 19 years in prison, after being convicted of paying more than $30 million in bribes. About 50 people mostly babies and other young children and their anxious parents waited on rusted metal seats to see a doctor. Its not clear why hidden payments found in Drousys documents have not come to light in public investigations. In the recording, Galarza discusses plans for a hit on Mandriotti with an unknown associate, saying a high-level professional from Mexico or Colombia would be needed to do the job. When the Brazilian construction firm Odebrecht S.A. admitted in December Emphasis is made on projects in Brazil, Peru and Colombia. Odeprev Designs and operates supplementary pension plans for Odebrecht Organization members, preparing them for retirement. The conglomerates largest creditors are Brazilian state-owned lenders Banco do Brasil SA, Caixa Economica Federal and BNDES, as well as private-sector lenders Banco Bradesco SA, Ita Unibanco Holding SA, Banco Santander Brasil SA and an investment fund, totaling 33 billion reais in debt. All rights reserved. So, you'd have to make a lot of these all over the world, a lot of capital involved and probably the price you'd need is $800, $900 a tonne to make a goal of it, he said. All quotes delayed a minimum of 15 minutes. 1730 Rhode Island Ave NW, Suite 317 The leaked records reveal hidden payments across the region that extend far beyond what has been publicly reported, including: Odebrecht paid off public officials on such a scale that it created a special unit, the Division of Structured Operations, for the primary purpose of handling bribes. While it is not possible to attribute specific incidents to the effects of corruption, the dollar figures involved are massive and the stakes are high. Braskem has denied however any corruption in Mexico, saying the contract resulted from an international bidding. The company also tried to settle cases with other governments so that it would be allowed to tender for future major infrastructure projects. The leaked files also laid bare the role played by the shadowy world of offshore finance, which made Odebrechts bribery division possible. Total payoffs could exceed $5 billion. Odebrecht Engenharia Industrial (industrial engineering) Constructs and assembles industrial facilities in Brazil and abroad, serving clients from a range of different sectors. For instance, over the last two years, Peruvian prosecutors have made 68 document requests of Brazilian authorities; Dominican prosecutors have made three. For years, Latin America's construction giant, Odebrecht, built some of the region's most crucial infrastructure projects. It was this financial service that generated the remuneration.. 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. Odebrecht had been negotiating a sale of Braskem to LyondellBasell Industries NV for a year and a half, but talks ended with no deal earlier this month. In December 2016, the Odebrecht company reached a plea agreement with prosecutors from Brazil, the U.S. and Switzerland, the latter two countries having joined the case upon finding that the companys illegal payments had passed through Swiss and U.S. banks. BEIJING China said on Tuesday Since then, he and dozens of other company executives have been jailed. If Odebrecht, for whatever reason, withheld information about its crimes from authorities, the consequences could be dire. These discoveries were made in a fresh trove of leaked records from an Odebrecht division created primarily to manage the companys bribes. 2023 BBC. [1][needs update], He was born in October 1968,[2] the son of Emlio Odebrecht and Regina Bahia,[3] and the grandson of Norberto Odebrecht, the company's founder. The Odebrecht scandal has toppled presidents, other politicians, business figures and lawyers in Latin America and the Caribbean. Dozens of companies acknowledged paying bribes to politicians and officials in exchange for contracts with Petrobras. Help us change the world. [5], He became vice president of the Brazilian Association of Infra-Structure and Primary Industry (ABDIB) in 2005, and vice president of COINFRA, FIESP in 2004. The bribery scheme covered the political spectrum. Noticias de Colombia y el mundo | Seal en vivo BLU Radio" (in Spanish). 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 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 groups main operating businesses are excluded, including Braskem, construction unit OEC, oil company Ocyan, shipbuilder Enseada, Odebrecht Transport and homebuilder Incorporadora OR. The companys bottom line had declined sharply in the wake of the scandal, with annual revenue dropping from a peak of $45.8 billion in 2014 to $25.7 billion in 2016. It was a Friday morning in the waiting room of the Dr. Robert Reid Cabral Childrens Hospital in Santo Domingo. A Peruvian prosecutor indicted Humala and his wife, Nadine Heredia, in May for allegedly laundering assets provided by Odebrecht. What has the company done that is illegal? It sold Brazilian sanitation company Odebrecht Ambiental to Canadas Brookfield Asset Management for $800 million and Peruvian hydroelectric plant Chaglla to China Three Gorges Corporation for $1.4 billion. - ICIJ Odebrecht controls Braskem, which by revenue is the fourth largest petrochemical company in the Americas and the seventeenth in the world. What is Odebrecht and why is it important? April 27, 2023, 5:00 a.m. Families like these, said Pimentel, of Participacin Ciudadana, are the true victims of the kind of corruption practiced by Odebrecht. But these are, I'd say, very small volumes today, he said. And obviously, want to pay the same as what we call regular methanol from natural gas, which the economics are quite different, John Floren, CEO of Vancouver-based Methanex, said during the company's most recent earnings discussion, according to a Motley Fool transcript. 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. Odebrecht Amrica Latina & Angola (Latin America and Angola) Leads investments and construction projects in regions that served as the pioneers for Odebrecht's international expansion. [4] Odebrecht has also been central to the Operation Car Wash scandal. Odebrecht S.A. (Brazilian Portuguese:[odb(t)]), officially known as Novonor, is a Brazilian conglomerate, headquartered in Salvador, Bahia, Brazil, consisting of diversified businesses in the fields of engineering, construction, chemicals and petrochemicals. Galarza, whose initials are CGZ, is the president and a director of CGZ Ingenieria, according to records from the Panamanian Corporate Registry. Odebrecht has admitted that it started to systematically bribe officials around 2001. Were here to build the Odebrecht of the future, she said. The documents include frank and explicit discussions about how to ensure the secrecy of the system. Among those involved in the operation who are named in the papers are Marcelo Odebrecht, his father Emlio Odebrecht, and his brother Maurcio Odebrecht. These columns did not mention any financial relationship between himself and Odebrecht. [15] Former Minister of Mines and Energy Edison Lobo (PMDB) was investigated for receiving more than USD$50million in bribes from Petrobras and arrested 19 October 2016 and held in custody due to what the justice department of Paran state called "a concrete possibility of flight given his access to hidden resources abroad, as well as double nationality. Petrobras owns about 36% of Braskem outstanding shares and 47% of voting rights stock. Some of the Petrobras executives who signed such deals in 2014 are now out of prison and serving their sentences at homes, instead of spending years in jail. Braskem, which also has operations and assets outside of Brazil that include five polypropylene plants the United States, is not part of said arbitration, that is protected by confidentiality, Petrobras said on Dec. 28 in a press release. [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. Odebrecht said the bankruptcy protection was the best way to conclude its debt restructuring as creditors have sought to seize assets pledged as collateral for unpaid loans. He serves is a director of the Exterior Commerce Chamber CONEX since 2005, a member of the strategic superior board of Federao das Indstrias do Estado de So Paulo (FIESP) since 2008 and a director of the Industry Development Study Institute, IEDI since 2003. Carlos Pimentel, executive director of the Dominican anti-corruption group Participacin Ciudadana, said the graft associated with the Dominican power plant and the inadequacy of the governments response undermines the credibility of the countrys political institutions. Braskem owners advised that they would start a sale process, he said. In the interview, Galarza also cast doubts about the recording in which he discussed assassinating Mandriotti. But we are not a part of that process. Lula's institute said in a statement that "violence" against the former president was "arbitrary, illegal and unjustifiable", as he had been co-operating with the investigations. The scandal over bribes for public works contracts spread to other countries where Odebrecht did business, including Peru, Mexico, Argentina and Colombia. Much remains to be discovered about the array of companies, consultation and service agreements, and secret bank accounts employed by Odebrechts bribery division. He has served since 2015 as the president of the International Association of Broadcasting, a group that represents some 17,000 radio and television broadcasters across the Americas. Prosecutors in other countries are working with Brazilian authorities to build their own cases and some have filed charges against politicians and others who have been implicated. In April, the company missed a $144 million debt payment on offshore bonds because of trouble getting further credit. Why Russia Is Still in Business. BBC South America Business Correspondent, Brazil For years, Latin Dauhajre and the other consultants approved its plan, and Odebrecht was awarded a contract of more than $2 billion, hundreds of millions of dollars more than some of the bids by its sidelined competitors. The meager results from official investigations, he said, demonstrate the governments continuing inability to banish Odebrechts stain. Former Ecuadorian Vice President Jorge Glas is in jail because of his links to Odebrecht corruption. So we are not expecting to have to engage with multiple counterparties, he said. Galarza also served as the companys general manager for years, including at the time it received the payments, according to his LinkedIn page. While bribe beneficiaries were almost all in Latin America, the payments invariably flowed through a secretive archipelago of offshore shell companies and bank accounts. 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. 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. America is now two years into abnormally high Courtesy of Methanex, Petrobras starts arbitration against Odebrecht over Braskem as sale process begins. 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. His name emerged in March in connection with another controversy. Its mind-boggling to even understand how this went on for so long The leaked documents dont say who received the hidden payment. In 2002, Odebrecht established Braskem, a petrochemical company that went on to become Latin America's largest. The leaked documents show the inner workings of a global bribery machine in which opaque offshore entities funneled hundreds of millions of dollars in secret payments to companies and banks in countries including the United States, China, the Netherlands, the United Arab Emirates, Panama and Antigua. So we'll continue to look at it, and there's lots of other things we can do. Retrieved 12 November 2017. He also leads the Economy and Development Foundation, an economic consultancy, based in the Dominican capital of Santo Domingo, that often wins contracts from the state. In Drousys system emails, Odebrecht employees, code-named Silver, Fred and Wilson, discuss payments for the Quito Metro that were routed through their department. Reporting by Aluisio Alves, Carolina Mandl and Tatiana Bautzer; Editing by Brad Haynes and Rosalba OBrien. 2023 The International Consortium of Investigative Journalists. And including in Louisiana using natural gas that's made from a zero carbon source and using that through our plant we can then have zero carbon methanol. Jessica Tillipman, an assistant dean at George Washington University Law School who specializes in government contracts and anti-corruption issues, said that the payments could be the subject of ongoing criminal probes or that Odebrecht might have argued successfully that the payments didnt violate the law. 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. But Odebrecht says the Braskem stake is essential to its restructuring, as the petrochemical company was responsible for nearly 80% of the conglomerates revenues in 2018. Two official investigations into the project that reported finding no wrongdoing didnt mention these payments. Some of these offshore companies are publicly known to operate for Odebrecht in Africa and be involved in bribes. 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. The long-running inquiry known as Operation Car Wash, probed accusations of corruption and money laundering at Petrobras. 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. First Republic Bank was taken over by the Federal Deposit Insurance Corporation on Monday, with most of its assets sold to JPMorgan Chase. One lists more than 600 outlays totaling more than $230 million issued from late 2013 through 2014. Odebrecht said in a statement on Wednesday that it will be making payments on the fine over 23 years. In the filing, the company asks the judge to bar the groups seven largest creditors - six banks and an investment fund - from taking possession or selling shares in the groups crown jewel, its controlling stake in petrochemical company Braskem SA. [20][21] He would later be released in November 2019 by a Supreme Federal Court ruling. Marcelo Bahia Odebrecht (Brazilian Portuguese:[maslu baj odb(t)]; born 18 October 1968) is a Brazilian businessman and the former CEO of Odebrecht, a diversified Brazilian conglomerate. [30], The attorney-general of Panama has announced that 43 people suspected of involvement in the bribery scandal. Dozens of Brazilian politicians have been investigated because of the scandal. On July 1, prosecutors announced corruption and money laundering charges against former presidents Ricardo Martinelli (2009-2014) and Juan Carlos Varela (2014-2019), summoning them for interrogation. It's not a brand many outside Latin America will recognise, but Grupo Odebrecht is the region's largest construction conglomerate. Odebrecht executives have confessed to paying bribes in exchange for contracts not only in Brazil, but in various parts of the world. BROOKLYN, N.Y. Odebrecht S.A. (Odebrecht), a global construction conglomerate based in Brazil, and Braskem S.A. (Braskem), a Brazilian petrochemical company, pleaded guilty today and agreed to pay a combined total penalty of at least $3.5 billion to resolve charges with authorities in the United States, Brazil and Switzerland All rights reserved. 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. Five years later, it created an entire division the Division of Structured Operations primarily dedicated to making corrupt payments. When the Odebrecht scandal exploded across Latin America, the company admitted to prosecutors in December 2016 that its corrupt payments included $92 million in bribes in the Dominican Republic. The plea deals 23-page statement of facts lays out in detail the creation of the Division of Structured Operations and its purpose. In 2016, Odebrecht and Braskem, a Brazilian petrochemical company in which Odebrecht has a controlling interest, pleaded guilty and agreed to pay a combined penalty to resolve charges in the U.S., Brazil and Switzerland over bribes paid around the world. Bribery Division: What is Odebrecht? Former Peruvian President Alan Garcia committed suicide in April when police went to his home to arrest him on charges related to Odebrecht. The company was founded in 1944 and is headquartered in Salvador da Bahia and Sao Paulo, Brazil. In March 2016, Odebrecht chief executive Marcelo Odebrecht grandson of the company founder was sentenced to 19 years in prison for paying about $30 million in bribes. In 1980, CBPO, another Brazilian contractor, merged with Odebrecht,[11] and in 1981, Odebrecht S.A. was created. 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. The company proposed a 70% haircut, which was rejected by its creditors. Most populous nation: Should India rejoice or panic? He and scores of Odebrecht colleagues agreed to give evidence in return for reduced sentences, revealing that the bribery division made illegal payments totaling hundreds of millions of dollars to secure government contracts in at least 12 countries. [citation needed], On 5 November 2017, the Paradise Papers, a set of confidential electronic documents relating to offshore investment, revealed that Appleby managed 17 offshore companies for Odebrecht and at least one of them was used as a vehicle for the payment of bribes in Operation Car Wash. The bespectacled, silver-templed economist writes a weekly column in the newspaper El Caribe. 1730 Rhode Island Ave NW, Suite 317 Odebrecht bought an Antiguan branch of an Austrian bank to minimize the risk of arousing suspicion. 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. ICIJ is dedicated to ensuring all reports we publish are accurate. In late 2013, when the Dominican Republics state utility company was awarding a contract to build the Punta Catalina coal-fired power plant, a 770-megawatt facility on the Caribbean coast, it tapped Dauhajres consulting firm, along with two others, to evaluate the bidders financial proposals. Washington, D.C. 20036 USA. In projects where Odebrecht paid bribes, costs increased by 70.8 percent on average, compared with 5.6 percent for projects with no bribes. Video, On board the worlds last surviving turntable ferry, AI pioneer warns of dangers as he quits Google, Yellen warns US could run out of cash in a month, Shooting suspect was deported four times - US media, Photo of Princess Charlotte shared as she turns 8, King Charles to wear golden robes for Coronation, More than 100 police hurt in French May Day protests, Street piano confiscated as public 'break rules', Explosion derails train in Russian border region.
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