From a posh perch in South Florida, where they’d taken refuge from a gathering legal storm at home, two Brazilian executives labored in near anonymity, moving money through offshore shell companies to bank accounts in Switzerland and Panama.
The two men were cogs in a corrupt multinational machine of breathtaking scope and efficiency, one built by Odebrecht S.A., the Brazilian construction conglomerate with a major Miami presence, to secretly shovel millions of dollars to politicians and bureaucrats and to skirt taxes. The critical role played by the two Miami-based executives in a sprawling scandal has remained under wraps.
Thanks to a leak of secret company documents and file registries, a fuller picture of Odebrecht’s corrupt practices — and Miami’s role in the mendacity — can finally be pieced together.
The leaked documents were provided to the International Consortium of Investigative Journalists by the Ecuadorian news outlet La Posta and shared with the Miami Herald, el Nuevo Herald and their parent company, McClatchy. They portray the machinery behind a massive bribery scheme — one so brazen that Odebrecht had to maintain a separate set of books to track and record whose palms were being greased and with how much.
Among the new findings, with some Miami connections, culled during months of research by the team:
- A money trail from Venezuela that passed through Miami.
- Never-before-released details about Odebrecht’s efforts to hide from Miami exiles and others its involvement in construction of a container terminal in Mariel, Cuba.
- Secret payments totaling more than $39 million in connection with a coal-fired power plant in the Dominican Republic.
- Previously undisclosed secret payments in Ecuador connected to a $2 billion subway system.
Odebrecht S.A. pleaded guilty in December 2016 and agreed to a pay $2.6 billion as part of a corruption settlement with the U.S. Department of Justice and regulators. No executives have been charged in the United States and the names of those involved in the illicit activities have been shielded from public view.
They were known as Odebrecht Employees 1-6.
The Odebrecht saga is more than just another corrupt company breaking the law to snag big contracts. It operates in a sphere — Latin America — where successive U.S. administrations have spent billions on foreign aid, hoping to counter narcotics smuggling and support open-market economies that might provide sufficient opportunity to slow persistent emigration.
Odebrecht’s lawless activities have undermined democratic institutions, fattened the bank accounts of anti-American politicians like Venezuela’s Hugo Chávez and Nicolás Maduro of Venezuela, and stalled the progress of emerging economies such as Guatemala that rely on U.S. assistance. Work remains undone in countries where Odebrecht traded cash for contracts.
The company’s use of offshore companies as a conduit for illicit cash has underscored anew their pernicious role in international commerce. Just as the Panama Papers tore back the veil that cloaked how the rich, corrupt and criminal used opaque shell companies to hide illicit fortunes, the Odebrecht leak has exposed how a multinational conglomerate can employ offshores to rig the game in its favor.
Investigations are ongoing throughout the hemisphere. One came to an abrupt end on April 17 when former Peruvian President Alan García shot himself in the head while officers sent to arrest him on Odebrecht-related charges waited downstairs in his home.
As part of a collaborative project — one involving more than 50 investigative reporters from 10 countries and 19 publications across the Americas — the employees cited in the record Foreign Corrupt Practices Act settlement in 2016 can now be identified.
The settlement described the Miami-based employees, over a stretch in 2014 and 2015, as having “engaged in conduct related to certain projects in furtherance of the scheme, including meetings with other co-conspirators to plan actions to be taken in connection with the Division of Structured Operations, the movement of criminal proceeds and other criminal conduct.”
While it did not supply names of Employees 1-6, the settlement provided descriptions of their locations and responsibilities. Working with Brazilian partner Época magazine, the reporting team has identified each of them via multiple independent sources.
No. 1 is Marcelo Odebrecht, the company CEO. Numbers 2, 3 and 4 are members of the Division of Structured Operations — also known as the Bribery Division — including leader Hilberto Mascarenhas Alves da Silva, Luiz Eduardo da Rocha Soares and Fernando Migliaccio. All four had knowledge of crimes in the region committed from Miami, the U.S. settlement charges, and have also admitted guilt to Brazilian prosecutors and cooperated in hopes of more lenient punishment.
Employee 5 is Marcio Faria do Bentos, who headed industrial construction for an energy-focused Odebrecht subsidiary, and Employee 6 is Luiz Antonio Mameri, the one-time head of operations for Latin America and Angola. Neither of these two were based at any point in Miami.
Soares and Migliaccio lived prosperous lives in Miami, enjoying the use of expensive properties owned by anonymous shell companies. They shunned mortgages, which are akin to fingerprints at a crime scene. Now back in Brazil, both await sentencing.
Odebrecht acknowledged in its U.S. plea that the Bribery Division ran an off-the-books parallel accounting system on Swiss servers. Called Drousys, the system was used primarily to document, track and pay bribes and secret political contributions.
Those who operated the bribery machinery were given code names, as were the hundreds who received payments. Migliaccio used the self-inflating moniker Maverick in referring to himself; an elderly, bribe-taking Brazilian politician with a much younger wife was code-named Viagra. A politician with a notable goatee was referred to as Dracula.
The investigative reporting partners obtained copies of the Drousys file directories, and painstakingly worked to decipher them. With many underlying documents deleted, the Drousys directories — long strings of information about folders and files — still provided useful clues about shell companies, banking transactions and transfers and even details about Odebrecht’s role in building the recently opened container terminal in the Cuban port of Mariel, a job that infuriated many Cuban Americans in Miami.
Odebrecht S.A., which filed for bankruptcy protection from creditors in Brazil on June 17, isn’t a household name in much of the United States, but in South Florida the Odebrecht name is everywhere, thanks to its Miami-based subsidiary. The subsidiary’s public works projects include AmericanAirlines Arena, the Florida International University football stadium, airport improvements in Miami and Fort Lauderdale, PortMiami and even local highways.
The subsidiary, which was not implicated in the DOJ probe, has long maintained a director’s seat on Enterprise Florida, a trade-promoting group, a privilege it has retained even after its parent became tangled in the largest Foreign Corrupt Practices Act plea deal in U.S. history.
Saints in a city of sinners?
Odebrecht’s U.S. subsidiary operates separately from the Brazil-based headquarters and the Bribery Division, and went unmentioned in the plea agreement. Although Soares and Migliaccio lived and worked in Miami, they appear to have operated in a different building, kept deliberately away from the Miami-focused operations.
The pair testified that they traveled regularly to the Dominican Republic, where their boss, Silva, relocated amid Brazil’s mushrooming investigations that eventually toppled much of that country’s political elite.
For decades, Miami has been synonymous with public corruption, so the local subsidiary’s absence in the DOJ settlement was striking.
The Justice Department declined to discuss the case, as did prosecutors in the Eastern District of New York, which handled the settlement and is believed to be investigating similar corruption in state-owned oil companies in Latin America. They also declined to discuss what Odebrecht’s bankruptcy filing on June 17 means for a settlement that must be fulfilled by December 2021.
The company, in a statement in response to questions submitted by the ICIJ on behalf of partners said: “Odebrecht will continue to make all efforts before the competent authorities to [maintain] a regime of unrestricted collaboration, provided that the basic premise of guaranteeing legal security and the commitments assumed by the company for an ethical, integrated and transparent action, are respected.”
There’s nothing in the Drousys file directories that points to the Miami subsidiary by name, or its longtime director, Gilberto Neves, who ran the office from 2000 to 2016. He did not appear to have a code name in the system.
“The 78 executives charged or implicated were listed and named in numerous publications and court documents and I have never been on that list because I had no knowledge or involvement and have never been contacted by any U.S. prosecutor or authorities from any country,” Neves said in a statement provided through his lawyer, adding, “I left Odebrecht over three years ago. I left by choice and on good terms.”
There are references that may invite further inquiry.
For example, most of Odebrecht’s companies are referred to in the parallel bookkeeping system by their initials. The documents mention OCII, which could be Miami-based Odebrecht Construction Inc., and there is also a reference to OCI Solutions, which could be Miami-based Odebrecht Global Solutions.
Odebrecht’s Miami operation actually consisted of a series of companies, not all of them active. One of them, not connected to Neves, was instrumental in a joint request for U.S. Export-Import Bank loan guarantees in 2010 for Odebrecht S.A.’s work on Autopista del Coral, a private highway in the Dominican Republic that is referenced in many Drousys records. One name tied to that highway deal is Ángel Rondón Rijo, a dealmaker on the island who in December 2017 was put on a U.S. Treasury Department sanctions list for corruption.
Neves denied any knowledge of the Drousys system or activities of his fellow top executives.
He said his division “conducted business exclusively for clients in the United States,” adding, “I had no authority, no input, nor involvement on specific activities related to any operations in other countries.”
Odebrecht’s U.S. office declined to make anyone available for an interview or to answer specific questions. In a statement, the company said “no current employee of Odebrecht USA has been investigated nor charged in any wrongdoing in relation to this investigation.”
Living large in Miami
In testimony to Brazilian prosecutors reviewed by McClatchy and the Miami Herald, Migliaccio said Odebrecht moved him to Miami and purchased a luxury condominium. Property records show it was in the Peninsula II high-rise in Aventura.
As in most things Odebrecht, the purchase was actually consummated using a shell company — in this case, one in the British Virgin Islands called Irana Finance Inc. The date on the warranty deed transfer is Sept. 23, 2014. Irana was approved as the purchaser by Peninsula’s secret screening committee a week earlier, on Sept. 17.
Public records show Irana’s address as the same as Migliaccio’s Aventura condo. A year later, he registered two twin-hull watercraft — a Bombardier Sea-Doo and a Yahama WaveRunner — to the Aventura address.
Migliaccio was arrested in Switzerland in February 2016 as he was trying to transfer funds and close accounts. Extradited to Brazil, he provided detailed testimony on the operations of the Bribery Division.
Two Miami phones associated with Migliaccio appear to still work. One has a message advising that it does not accept calls. A message left on the other line went unreturned. The building has numerous Brazilian condo owners, and several listed in a group email of owners declined to discuss their presumably ex-neighbor.
Property tax records show that Irana’s taxes are paid up through 2018 and there are no liens against the condo, which last year had an assessed value of $830,409.
Migliaccio was treasurer of the parallel accounting system, and by all accounts kept a low profile.
Luiz Eduardo Soares preceded him in the division by two years and helped establish the Drousys system. According to Brazilian court documents, it was Soares’ brother, Paulo, an outside IT expert, who set up Drousys for Odebrecht in the bank secrecy capital of Switzerland.
Soares had a higher profile, opting for a more luxurious condo. Property records show he lived in the pricey Marquis building on Biscayne Boulevard near the MacArthur Causeway.
Newland Financial Group Inc., an offshore company registered in the British Virgin Islands with an address in Panama, purchased the unit in a distress sale for $800,000 in 2011. Its assessed value last year was more than $1.1 million and its taxes were current. The property was apparently free of liens.
A search of Florida corporate records using that address shows Soares used Trust Advisers Corporation and its veteran owner, David Southwell, to create a company called Rolemia Funds LLC in February 2015. In a phone interview, Southwell acknowledged Soares was his client, described him as “a really nice guy” and said he used Southwell’s services for taxes and corporate registrations before literally disappearing.
Rosemany Giacomeli Soares, Luiz’s wife, also appears in Florida’s corporate registry as owner of the Erica Giacomelli Interiors LLC, created in May 2015. Erica is their daughter, who went on to study design in Milan. Erica’s business web page features her design work in the luxury condo.
Rosemary Soares also appears in the Panama Papers, the massive 2016 leak of secret offshore documents from the law firm Mossack Fonseca. She was given power of attorney over an offshore company found in the Drousys system called Salmet Trading. Mossack Fonseca withdrew from servicing Salmet and an affiliated offshore, Davos Holding Group S.A., after Soares and another Bribery Division figure — Olívio Rodrigues — drew the attention of Brazilian prosecutors.
Because the condos belong to anonymous Florida and Caribbean corporations, it is not certain Soares and Migliaccio are the true owners. The lack of transparency in such financial transactions is why Sens. Marco Rubio, a Florida Republican, and Ron Wyden, an Oregon Democrat, are readying legislation to require disclosure of true ownership to the Treasury Department.
“It is imperative that law enforcement has the basic information, tools, and authorities at its disposal to identify and disrupt criminal acts that put our communities and our national security at risk,” Rubio said.
Added Wyden, “Our bill would provide a straightforward solution by ending the anonymity and registering the owners of these companies on Day One.”
Biscayne Bay to Boston
A third troubled Odebrecht executive connected to Miami is the former longtime head of Venezuela operations, Euzenando Azevedo. The Brazilian was a close friend of Hugo Chávez, the late charismatic Venezuelan leader. That proximity led diplomats from many countries to use him and Odebrecht as a conduit to Chávez, whom Azevedo befriended in the late 1990s.
Azevedo testified in Brazil in December 2016, the same month as Odebrecht’s U.S. settlement, that he was forced to relocate to Miami when Chávez’s successor, Nicolás Maduro, demanded that Azevedo be removed from his post.
His transgression, Azevedo said, was giving on behalf of Odebrecht $15 million through an intermediary to the campaign of Henrique Capriles, an opposition presidential candidate.
That was far less, he said, than the $35 million in secret payments made by Odebrecht S.A. to the Maduro campaign in 2013. Still, Maduro was infuriated. One explanation: A February 2018 report in el Nuevo Herald said Maduro actually asked Azevedo for as much as $50 million to ensure Odebrecht continued winning projects in Venezuela.
In Miami in 2015, Azevedo briefly became the boss of Neves, the longtime CEO of Odebrecht’s main Miami subsidiary. While a U.S. executive, Azevedo oversaw a Houston highway project and Miami road improvements on State Road 836, also known as the Dolphin Expressway, and Krome Avenue (Southwest 177th Avenue).
The unraveling had already begun in Brazil, but the word passed down to Miami from corporate was that all was well.
The Brazil-based executives “denied participating in anything illicit until the very last minute,” said one former U.S. Odebrecht engineer who spoke on the condition of anonymity, in part because of the current taint of the Odebrecht name. “It’s shameful and embarrassing that they were involved in this [corruption].”
Azevedo does not appear to own property in his own name in Miami or elsewhere in the United States. The same is not true of his son. Over a time period that paralleled his own rising influence within Odebrecht and Venezuela, Azevedo’s son, also named Euzenando, rose to business prominence in the United States.
Now a 39-year-old entrepreneur in Boston, he goes by the nickname Euz and is both property owner and proprietor of restaurants and bars. He told the Boston Globe in a September 2013 feature that his “family had the means to give him a start in the restaurant business” and that he stayed after college studies on an investor visa.
In the same article, the son calls the elder Azevedo a role model who taught him that “you have to know and play by the rules and then you win.”
Through a lawyer, Euz said his well-compensated father had over the years gifted him money but was not an investor in the son’s successful businesses or properties. The gift money came from a U.S. account and both father and son declared the gifts, which the lawyer insisted in no way reflected illicit money from Venezuela.
A Nov. 6, 2017, letter from a Swiss federal prosecutor to the Swiss Embassy in Caracas shows that Euzenando Jr. was an authorized signatory on a Swiss bank account at SG Private Banking tied to an offshore shell company called Savage Garden International Limited. The elder Azevedo controlled the account — one of 27 accounts listed on the letter about people tied to Odebrecht and related bribery scandals in Venezuela.
The secret document was seen by McClatchy, the Miami Herald and reporting partner Armando Info. At minimum, it means that Swiss authorities at one time believed Euz had access to some of his father’s money. Through his lawyer, Euz confirmed having non-voting shares of Savage Garden International but never had power of attorney, control of or access to the Swiss bank account, which was known to Brazilian authorities and held his father’s bonus payments, transferred to the United States more than a decade ago.
The younger Azevedo owns a $1.3 million unit at the luxurious Bath Club Condos on Collins Avenue in Miami Beach. It was purchased in 2011, then “sold” in 2013 to a new limited liability company called Azevedo Bath Club LLC. A 2016 Miami-Dade property record shows the younger Azevedo still as owner for the purpose of pulling permits to install marble tiles.
Reporting partners Guilherme Amado of Revista Epoca and Tiago Mali of Poder 360 contributed from Brazil. Joseph Poliszuk contributed from Colombia for Venezuelan news outlet Armando Info. Also contributing were Monika Leal from the Miami Herald and Ben Wieder from the McClatchy Washington Bureau.
Kevin G. Hall: 202-383-6038, @KevinGHall; Antonio Delgado: 305-376-2180, @delgadoantoniom; Nora Gámez Torres: 305-376-2169, @ngameztorres