Billionaires in Handcuffs in Curitiba
Three former top executives of Camargo Corrêa, one of Brazil’s largest construction firms, were sentenced to prison by Judge Sérgio Moro for crimes committed in connection with the corruption scandal centered on Petrobras.
Dalton Avancini and Eduardo Leite, former president and vice president, respectively, of Camargo Corrêa, each received sentences of 15 years in prison. Additionally, the chairman of the Camargo Board, João Ricardo Auler, is facing nine years and six months behind bars.
All three men were found of guilty of bribery, money laundering, and submitting fraudulent bids for contracts from Petrobras. Camargo Corrêa paid 50 million reais (U$16 million) in kickbacks for two contracts to executives in Petrobras’s supply division including director Paulo Roberto Costa, according to Moro’s decision.
Paulo Costa and currency trader Alberto Youssef and one of Youssef’s employees were also convicted at the same time by Judge Moro. All of the defendants will be eligible for early parole and other benefits by agreeing to cooperate with the investigation. The Petrobras investigation marks the first time federal prosecutors have been able to utilize “plea bargains.”
Investigators say that construction and engineering companies paid bribes to secure inflated contracts with Petrobras. These firms split most of the extra money with corrupt executives of the state-controlled company while setting aside some of the money to pay off politicians who provided assistance with the crimes.
Founded in 1939, Camargo Corrêa is one of Brazil’s largest builders and is active throughout Latin America. Federal Police have formally charged Otavio Marques de Azevedo, CEO of construction giant Andrade Gutierrez, for his alleged part in the Petrobras scandal. Andrade Gutierrez operates in about 40 countries and is Brazil’s second largest construction company.
Sérgio Moro also took the next step in his investigation of Marcelo Odebrecht, the CEO of Odebrecht, Latin America’s largest engineering company. Judge Moro indicted Mr. Odebrecht while he was being held in “preventive detention,” a legal form of detaining suspected criminals in Brazil before they are formally charged.
“We, the public prosecutors and the investigators, have a dream that we share with Brazilian society — that all are treated equally before the law,” said prosecutor Deltan Dallagnol, presenting the charges against the construction bosses, Marcelo Odebrecht and Otávio Marques de Azevedo.
President Rousseff sought to allay public disgust with corruption after the Mensalão scandal by signing a landmark anti-corruption law in 2013. This law defined new powers for prosecutors, including allowing them to enter into leniency agreements known as plea bargains, in which a suspect agrees to cooperate with police in exchange for a lighter sentence.
The prosecutors in Lava Jato have capitalised on this power and coupled it with preventive arrest, the detention without charge of a suspect to stop him or her from tampering with evidence. The result has been a cascade of confessions as prosecutors rounded up first the criminal middlemen involved in the scheme and then the Petrobras executives and other businessmen.
In the past, wealthy businessmen and politicians have rarely remained in preventive detention for more than a few days. Judge Moro, however, has been able to exercise greater power in the Petrobras investigation, and Marcelo Odebrecht has been held in detention in Curitiba since June 19. With the executives from Camargo Corrêa, as well as Roberto Costa of Petrobras and money launderer Alberto Youssef, the longer detention times have been quite effective in soliciting plea bargains. There has been on indication as yet of any plea bargain arrangement with Marcelo Odebrecht.
“The 20th of July may be remembered as an important day where a lot of events slammed together,” David Fleischer, an emeritus professor of political science at the University of Brasília, said. “This is the first time in the history of Brazil that you have these very powerful business people –- Odebrecht is one of the largest private firms in Brazil –- being arrested, held in prison for over a month, and then indicted. That’s a really big first.”
[Research for this article comes from the EFE news agency and the Financial Times.]