Two Brazilian executives admitted yesterday to paying multi-million dollar bribes to a former director of Petrobras and a money launderer with the intention of securing contracts with the state-oil company.
The two executives — Sérgio Cunha Mendes, executive vice-president of Mendes Júnior, and Erton Medeiros Fonseca, director of engineering and infrastructure at Galvão Engenharia — were arrested last Friday for their suspected involvement in Operation Car Wash, a corruption scandal that has rocked Petrobras and has disgusted Brazilians, as it reaches higher and higher into the hierarchy of the ruling Workers’ Party.
Another 22 suspects — mostly high-ranking executives at some of Brazil’s largest construction companies — were also detained but many have denied the existence of a corruption scheme.
Mendes told police yesterday that he paid eight million reais (around US$3 millionz) to money launderer Alberto Yousseff from June to September 2011. He said Yousseff and former Petrobras director Paulo Costa — both currently under arrest after entering a plea deal with the state — threatened to cancel Mendes Júnior’s contracts with the oil company if he failed to pay.
Medeiros Fonseca, meanwhile, admitted to paying four million reais (US$1.5 million) in order to win contracts from Petrobras.
Both executives said that they don’t know where the money went after they handed it over to Youssef.
Price cartel
According to prosecutors, a group of up to 16 contractors formed a cartel to drive up the prices of Petrobras projects. Some of the money then went to Costa and Brazilian politicians via Yousseff.
Both Costa and Yousseff have confirmed the details of the scheme in exchange for lighter sentences. The former Petrobras director is currently under house arrest, while the money launderer has been imprisoned.
Operation Car Wash first exploded in March. Police say the cash from bribes was either creamed off for personal use or paid off to political parties, including the Workers’ Party of newly re-elected President Dilma Rousseff.
Costa and Yousseff are believed to have run the scheme, which according to their testimonies — leaked to the press just before the October general election — was even linked to Rousseff and her predecessor, Luiz Inácio Lula da Silva.
On Friday and over the weekend police swooped in again and arrested dozens of high-ranking executives, including CEOs, from some of the biggest engineering and construction companies in Brazil — including the Camargo Correia group, OAS, UTC, and Queiroz Galvão.
Renato Duque, formerly Petrobras’ director of services, was also arrested.
The oil company has said it is a victim of the scheme but it was forced to delay an earnings’ report due on Monday.
‘Changing brazil’
The scandal followed Rousseff to Australia, where she was attending the G-20 summit and gamely tried to put a positive spin on the new wave of arrests. “I think this could, in fact, change Brazil forever,” she said. “It is going to end impunity.”
On Saturday, some 10,000 demonstrated on Sao Paulo’s main avenue for her impeachment — signs of the strength of feeling in Brazil, where many feel that the scandal is not being taken seriously enough. Some on the march even split off and called for a return to military dictatorship.
On Friday in a separate case, Brazil’s comptroller general’s office said it will investigate allegations that Petrobras officials accepted bribes to award contracts several years ago to Dutch company SBM Offshore, which supplies oil platforms. Executives said SBM was now barred from future bid rounds, but admitted Petrobras still has eight oil platforms on hire from the company.
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