It cost the company at least $US2.1 billion, it cost Brazil’s ruling party its credibility, and it will likely end up costing some of the most powerful people in the country their freedom.
But a Brazilian prosecutor says the corruption scandal inside Brazil’s massive quasi-state oil and gas company was a “criminal beauty” that no one could’ve seen coming, says Bloomberg.
“The fraud happened externally,” said Carlos Lima, one of the 9 prosecutors charged with investigating the case. “I don’t see how Petrobras could, as a company with an auditor, find the fraud in the contract, or how the company could have established controls to avoid this.”
This should be unsettling to Brazilians, who’ve seen corruption at Petrobras as another sign that the ruling party — which allegedly used the company as its personal political piggy bank for kick backs and bribes — is out of touch with its constituents. This was all revealed starting last August, when authorities started making arrests in a probe they called “Operation Carwash.” Since this time last year the company’s stock has fallen 40%.
And Brazilians were so angry about it, this spring protestors took to the streets and called for the unthinkable, the return of the country’s military junta.
President Dilma Rousseff herself said that this scandal had the ability to “change Brazil forever” depending on how it was handled.
So the fact that a prosecutor in the case is saying that malfeasance at Petrobras was external and couldn’t have been helped is not what Brazilians want to hear. They want to believe that their country is entering an era where the rule of law is applied to everyone, not just everyone but the rich and powerful.
Investors want to believe that too.
“Those who have a deeper understanding know that Brazil is one of the most transparent countries in the world,” said Joaquim Levy, Brazil’s Finance Minister, at a Bloomberg America’s Summit in New York in April. “Everything is discussed openly … people who do wrong things go to jail … This is why I’m confident about Petrobras; there has been a change in the way it is managed.”
Levy should probably sit down with this Lima guy.
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