The Bribery Division: A look into Odebrecht’s bribery scandal
Florida Republican Sen. Marco Rubio asked the Justice Department on Thursday to investigate whether embattled Brazilian engineering company Odebrecht S.A. has complied with terms of its record plea deal, reached with U.S. prosecutors, over its corrupt practices.
In a letter Thursday to Attorney General William Barr, Rubio cited an investigative series by the Miami Herald, el Nuevo Herald and their parent, McClatchy, which detailed Odebrecht’s questionable activities in Cuba, Venezuela and elsewhere.
Odebrecht admitted to a massive corruption scheme in December 2016 and agreed to pay at least $2.6 billion in a record corruption settlement with the Justice Department. The company was required to disclose information concerning its activities across the Americas and those of its subsidiary companies.
“Recent reports, however, call into question whether Odebrecht has been fully transparent with the Department of Justice about its corrupt activities in Latin America,” Rubio wrote.
A team of 19 news organizations probed Odebrecht, led by the International Consortium of Investigative Journalists. The team included the Miami Herald, el Nuevo Herald and parent company McClatchy, as well as Venezuela’s Armando Info. The team reviewed secret documents from Odebrecht’s Structured Operations Division — the so-called Bribery Division.
Leaked company documents show that Odebrecht paid more in bribery in Venezuela than it previously admitted, at least $142 million just from 2011 to 2014. Some of that money ended up being spent on Miami real estate.
Rubio’s letter called attention to a Herald/McClatchy report about Odebrecht’s irregular payments related to projects in Cuba.
Documents found in Drousys, Odebrecht’s secret accounting system, show an $8.4 million off-the-books payment made in connection to the modernization of the port of Mariel in Cuba. That effort stirred anger in Miami’s large Cuban-American community.
“Given the above information, I respectfully encourage your department to ensure Odebrecht’s full compliance with the 2016 plea agreement and U.S. law,” the senator said.
“Government ... corruption only solidifies the power and authority of dictatorial regimes in the region, such as in Cuba and Venezuela,” Rubio added. “It is critical to regional stability that agreements entered into with the U.S. Department of Justice are honored and enforced in good faith.”
Odebrecht late last month filed for Chapter 15 bankruptcy protection in New York, seeking to limit the venues in which its creditors worldwide can seek redress. The move is designed to help it emerge from bankruptcy quicker and survive its many scandals. Justice Department officials declined to comment on how it would affect penalties levied on Odebrecht.
Meanwhile, legal problems continue to mount for Odebrecht on the international front. Investigative reporters in Peru this week chronicled new alleged corruption there by Odebrecht.
And the Inter-American Development Bank announced action against Odebrecht in a little-noticed settlement on Sept. 4.
In a news release, the hemispheric lender announced the six-year debarment of CNO S.A., the construction subsidiary known as Construtora Norberto Odebrecht. CNO will be ineligible to participate in projects financed by the bank over the next six years. It allowed another key subsidiary, Odebrecht Engenharia e Construção S.A., to continue bidding on projects under close scrutiny.
The bank’s Office of Institutional Integrity investigated and discovered that Odebrecht paid more than $380,000 in bribes to unidentified government officials in two bank-financed projects — the Tocoma hydroelectric plant in Venezuela and a highway rehabilitation project in the Brazilian state of São Paulo. The investigation also found illicit or irregular payments of $118 million.
Importantly, the designation qualified Odebrecht for what’s known as cross-debarment, meaning other international lending bodies can also bar it and 19 subsidiaries from bidding. Odebrecht agreed to give $50 million to non-government organizations and charities.
Follow Nora Gámez Torres on Twitter: @ngameztorres