22/12/2016 | 12PM
As part of a plea bargain deal forged with US authorities, construction giant Odebrecht and its petrochemical subsidiary Braskem admitted to having paid $1 billion in bribes to government officials, their agents, and political parties in 12 countries. According to documents released Wednesday (Dec. 21) by the US Justice Department, Odebrecht spokespeople confessed to the payment of $788 million in kickbacks starting in 2001, whereas Braskem admitted to having paid some $250 million between 2014 and 2016.
In an agreement with Brazilian, US, and Swiss authorities, Odebrecht and Braskem pleaded guilty to a number of frauds and agreed to pay $3.5 billion in global fines to resolve what has been regarded as the history's biggest foreign bribe scheme.
Department of Bribery
According to the US Justice Department, Odebrecht created a dedicated department for managing the payment of bribes. In a section called Structured Operations Division, executives administered the company's “shadow budget,” used to pay bribes and kickbacks in Brazil, Angola, Argentina, Colombia, Dominican Republic, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru, and Venezuela.
“Odebrecht and Braskem Odebrecht used a hidden but fully functioning Odebrecht business unit—a department of bribery, so to speak—that systematically paid hundreds of millions of dollars to corrupt government officials in countries on three continents,” said US Department of Justice Assistant Attorney General Sung-Hee Suh.
According to the US authorities, the expansion of kickbacks at Odebrecht in 2006 was such that the construction firm created its “Structured Operations Division,” whose head reported to Odebrecht's highest-ranking levels up to 2009 to gain permission to authorize kickbacks, among other things. After 2009, this responsibility was assigned to other companies with business active in Brazil and other jurisdictions.
In order to conceal the wrongdoing, the Structured Operations Division used a “completely separate” and “off-book” communication system that allowed its members to safely communicate with each other and with external financial operators, through e-mail and instant messages, using nicknames and passwords.
Braskem, in turn, using Odebrecht's system, authorized bribes to politicians and political parties in Brazil, including Petrobras officials. In exchange, Braskem received favorable legislation and benefits like preferential fees at Petrobras for the purchase of raw material used by the company.
Source: Agência Brasil