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Former Odebrecht Boss Sentenced in Brazilian Kickback Probe

  • Reuters

FILE - Marcelo Odebrecht, then the head of Latin America's largest engineering and construction company Odebrecht SA, smiles as he gives his testimony in a session of the Parliamentary Committee of Inquiry in Curitiba, Brazil, September 1, 2015.

FILE - Marcelo Odebrecht, then the head of Latin America's largest engineering and construction company Odebrecht SA, smiles as he gives his testimony in a session of the Parliamentary Committee of Inquiry in Curitiba, Brazil, September 1, 2015.

A Brazilian court on Tuesday sentenced Marcelo Odebrecht, the former chief executive of Latin America's largest construction company, to 19 years in prison for his role in a far-reaching corruption scandal that has implicated some of the country's political and corporate chieftains.

Odebrecht, who until his arrest last June helmed the family-run engineering and building conglomerate known as Odebrecht SA, was convicted on charges of bribery, money laundering and organized crime.

The conviction of Odebrecht, the 47-year-old grandson of the founder of a company that in recent decades became synonymous with large public works projects, is the most significant yet among dozens of corporate executives charged in the nearly two-year-old "Operation Car Wash."

The investigation has destabilized Brazil's government and led to the arrest of former aides and allies of President Dilma Rousseff. Last week, it reached a staggering political turning point when prosecutors detained former President Luiz Inacio Lula da Silva for questioning.

The scandal, dating to the Lula administration and a time when Rousseff chaired the board of state-run oil company Petroleo Brasileiro SA, involved an intricate scheme of billions of dollars in kickbacks and bribes through which contractors paid politicians, political parties and company executives in exchange for work.

A sign of the Odebrecht SA construction conglomerate is pictured in Rio de Janeiro, Brazil, Feb. 26, 2016.

A sign of the Odebrecht SA construction conglomerate is pictured in Rio de Janeiro, Brazil, Feb. 26, 2016.

Bids rigged, judge says

According to the verdict by Sergio Moro, the federal judge in the southern city of Curitiba spearheading the investigation, Odebrecht formed a "cartel" with other companies through which they, since 2006, "systematically" rigged bidding on projects by Petrobras, as the company is known.

"The contractors, united in something that they called a 'club,' previously agreed among themselves who would be the winners of the Petrobras contracts, manipulating the prices presented during bidding," Moro wrote. "They were able to, with no real competition, be contracted at the highest possible price."

Officials at Odebrecht headquarters in the city of Salvador didn't respond to calls for comment. A spokeswoman at the company's Sao Paulo office declined to comment.

The former executive is considered a pivotal probe figure because of the company's heft and its close ties to current and former political leaders, like Lula, who prosecutors say may have received illicit payments or favors from Odebrecht and other builders.

Lula, who remains one of Brazil's most popular politicians, has denied wrongdoing.

His brief detention last week sparked clashes between supporters, many of whom characterized the ongoing investigations as a witch hunt against the ruling Workers' Party, and demonstrators who support the crackdown.

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