BRIEF

Massive Brazil Corruption Scandal Takes on International Scope

ARGENTINA / 24 FEB 2016 BY MIKE LASUSA EN

A wide-ranging corruption investigation involving two of Brazil’s largest companies has moved into the international realm following allegations against foreign officials, including Peruvian President Ollanta Humala. 

For more than a year, Brazilian prosecutors have been looking into allegations that the state oil giant Petrobras awarded overpriced contracts to a cartel of large construction companies, which used the money to fund kickbacks to Petrobras executives and politicians.

Now, according to a report from O Globo, Brazilian authorities say new evidence shows one of those companies, Odebrecht SA, may have paid bribes to Argentina’s former transportation secretary, Ricardo Jaime, and Peru’s current president, Ollanta Humala, in exchange for help obtaining major public works contracts in those countries.

The Buenos Aires Herald reported that Jaime pleaded guilty last year to accepting money and favors from business executives whose companies he was charged with regulating. The Peruvian president’s office has denied taking bribes from Odebrecht, RPP Noticias reported.

In another sign that the case is taking on an international dimension, Reuters reported that Swiss authorities recently arrested Odebrecht executive Fernando Migliaccio da Silva, who is said to have helped manage offshore bank accounts used to distribute illicit payments.

SEE ALSO: Coverage of Money Laundering

The so-called “Car Wash” scandal has already implicated a number of powerful businesspeople and politicians in Brazil — most recently, João Santana, who served as a top advisor for the campaigns of current Brazilian president Dilma Rousseff and her predecessor, Luiz Inacio “Lula” da Silva. Santana was arrested Tuesday on charges of taking bribes from Odebrecht and other companies.

O Globo also reported that the newly uncovered evidence suggests Odebrecht may have provided free construction services to the Lula Institute, a non-profit founded by the former president. Lula and members of his immediate family have recently been linked to other allegations of influence-peddling, but he has denied any wrongdoing.

InSight Crime Analysis

The expansive nature of the “Car Wash” investigation suggests a serious commitment by Brazilian authorities to follow the case wherever it leads, even if that involves scrutinizing very powerful individuals. This tenacity comes as a welcome sign of change in a country where elites have traditionally found it relatively easy to avoid facing justice for corruption.

However, Brazilian prosecutors have faced some criticism for the means by which they have conducted their investigations. And the international dimension the case is now assuming could create even more controversy going forward.

SEE ALSO: Coverage of Elites and Organized Crime

For example, RPP Noticias reported that Humala’s office had summoned the Brazilian ambassador in order to express the president’s rejection of the accusations. According to Voice of America, Peru’s attorney general has declined to investigate the charges, citing presidential immunity.  

By most accounts, the “Car Wash” investigation has made some important achievements in Brazil. But, as the Swiss and Peruvian cases illustrate, Brazilian authorities will need the cooperation of their international counterparts in order to pursue suspects abroad.

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