One name has completely disrupted politics in the Western Hemisphere, taken down at least one presidency and threatens to topple another.
It has sent protesters to the streets in more than one nation, and has American officials combing through bank transactions leading to a nebulous web of offshore accounts.
The name is Odebrecht, it’s a Brazilian construction company that became an international giant over years of using bribery and corruption to secure around 100 projects in 12 countries, generating ill-gotten gains of about $US3.3 billion.
That $US3.3 billion, however, has nothing on the impact Odebrecht will have on history. In the countries where it operated — especially in Brazil and the Dominican Republic — the revelation that Odebrecht’s corruption reached the highest levels of government has destroyed storied careers and crippled political parties.
Former left wing Brazilian President Dilma Rousseff was an Odebrecht casualty. She was forced to step down from office last year. Her right wing successor, Michel Temer may not survive his full tenure in office either. Recently, tapes of him encouraging bribes leaked to the public, and on Sunday Brazilians held yet another massive protests calling for his resignation.
In Peru, a judge ordered the arrest of former President Alejandro Toledo, who was accused of
accepting millions from Odebrecht. Another governor has been placed in “preventative prison” for 18 months for accepting $US4 million in bribes as protesters have taken to the streets.
In Colombia, prosecutors are investigating whether or not President Juan Manuel Santos’ 2014 campaigned received improper donations from Odebrecht. Protesters in Guatemala have also called for the resignation of their president and any other politicians involved in the scandal.
In the Dominican Republic, almost a dozen officials were arrested on Monday on suspicion of involvement with the $US92 million in bribes Odebrecht paid there. According to the Justice Department, the company made $US163 million from those bribes.
Odebrecht also operates in Angola, Argentina, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru, and Venezuela.
Here’s how you scam the entire Western Hemisphere
The US is investigating Odebrecht for violations of the Foreign Corrupt Practices Act because the company allegedly made million in corrupt payments from New York City and held meetings in Miami. The Justice Department complaint reads like a Bond-villain’s backstory.
According to the Feds, Odebrecht started bribing officials around 2001. In 2006, though, things got really streamlined. The company created an entire division simply for making corrupt payments — it was called the Division of Structure Operations. It had a separate computer process from the rest of the company for its communications and payments.
Naturally, there was an opaque and complicated structure of offshore accounts. Payments could go through up to four levels of offshore bank accounts before reaching their final destination. To further streamline this process, in 2010 or 2011 Odebrecht bought a branch of an Austrian bank in Antigua.
This is how the company managed to pay out $US788 million in bribes.
Of course, everything came crashing down around 2014, when Brazilian officials initiated a sting known as Operation Car Wash. This sting had everything — public arrests, briefcases of cash, private planes, big name politicians, you name it.
A lot of the money Odebrecht was stealing came form country’s quasi-state owned oil company, Petrobras. The company’s stock has lost over a quarter of its value since then, as prosecutors calculated that $US2.1 billion had gone missing from its balance sheet. Brazilian authorites arrested Marcelo Odebrecht, the head of the company, along with a few other executives back in 2015.
“The fraud happened externally,” said Carlos Lima, one of the nine 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.”
Indeed, most of Odebrecht’s power came from its ability to engage in bid rigging with a group of cartel companies that would seem to compete for projects, but in reality took turns at Odebrecht’s direction.
That’s probably why Lima also called the Petrobras scandal a “thing of criminal beauty.” With all of the political turmoil Odebrecht caused, however, he’ll be around to see it get ugly as well.
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