Top Brazilian Construction Execs Under Investigation in “kickback” Scandal

Sunday, November 16th, 2014
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Federal police have sharply expanded what is becoming Brazil’s biggest political kickback scandal, arresting top construction company executives and detaining another former director of the state-run energy company.

Authorities allege top officials from oil company Petrobras operated a kickback scheme on contracts involving several billion dollars, with the money eventually being fed back to the governing Workers Party and other top parties for political campaigns.

On Friday police arrested Renato Duque, the former director of services of Petrobras, for his alleged role in the scheme.

Petrobras is Brazil’s biggest company and is in charge of tapping big offshore oil fields and creating wealth that leaders hope will propel the country to developed-world status.

But the debt-plagued firm hasn’t met development goals, and the riches remain buried deep under the sea.

Authorities also struck at the heart of some of Brazil’s biggest private construction companies, enterprises that are consistently among the top donors to political campaigns via legal contributions.

Now, police are directly targeting them for allegedly making illegal kickbacks worth exponentially more than the legal campaign contributions.

The case fuels widespread belief among Brazilians that their political system is rife with corruption, especially when it comes to big infrastructure works and state-controlled companies.

Police arrested top executives during raids on the offices of builders OAS and Queiroz Galvao, the industrial engineering firm UTC and Iesa Oil and Gas.

An arrest warrant also was issued for the top executive of builder Camargo Correa.

Authorities hauled away boxes of documents and the personal bank accounts of the executives were frozen.

Police also searched and confiscated documents in the offices of Brazil’s biggest builder, Odebrecht, and the Mendes Junior and Engevix firms.

For months police have been investigating the alleged Petrobras kickback scheme in an effort they named Operation Car Wash.

Many of the allegations centre on what police have heard from Alberto Youssef, a convicted black-market money dealer who said that he laundered hundreds of millions in the scheme and that the governing party benefited from it.

Youssef, who is talking to police in exchange for a lighter sentence, claims recently re-elected President Dilma Rousseff and former president Luiz Inacio Lula da Silva knew about the kickbacks.

He has offered no proof, and both leaders deny the allegation.

Also on Friday, Brazil’s comptroller general’s office said it will investigate allegations that about 20 Petrobras officials accepted bribes to award contracts several years ago to SBM Offshore, a Netherlands-based supplier of offshore oil vessels.

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