Brazil: Odebrecht and its special in-house bribery department

Odebrecht’s use of bribery to secure major contracts with Petrobras and other entities is now far from secret, but developments this week have revealed that it was on a much more institutionalised and sophisticated scale than suspected - and that more detail on its breadth and international reach is in the offing.

In the latest trickle of disclosures resulting from the Operação Lava Jato investigation into Brazil’s biggest corruption scandal, chief public prosecutor Carlos Fernando dos Santos Lima revealed that Odebrecht ran a department dedicated exclusively to managing the payment of bribes to give it the edge in its business development strategy.

The bribery office was, cryptically, called the ‘structured operations’ section, managed by a group of trusted employees, and administratively part of Odebrecht’s infrastructure division.

According to Federal police, former CEO Marcelo Odebrecht - who was earlier this month convicted of corruption and sentenced to 19 years’ imprisonment - allegedly signed off on many of the bribe payments.

Prosecutors believe that the company’s ‘structured operations’ unit had been operational for at least six years - and continued to function even after Marcelo Odebrecht was arrested in June last year, until he ordered the plug pulled in a text message from his smartphone.

Bribes were managed using a software system which catalogued the amounts paid, the codenames of their recipients, how the payments were physically made, and in reference to which project or contract.

The system appears to have focused predominantly on recording bribes for works in Brazil, but dos Santos Lima said that it also listed, at least, requests for bribe money from Odebrecht executives overseas and in charge of projects in Argentina and Angola.

Police obtained the intelligence from a woman called Maria Lúcia Tavares, an Odebrecht secretary who kept the books on the scheme and appears to be the only Odebrecht employee who has so far agreed to cooperate with prosecutors. She is apparently now helping police decipher the codenames of bribe recipients.

But she may turn out not to be the only Odebrecht employee who ends up cooperating with prosecutors in the Lava Jato probe.

In an explosive development, Grupo Odebrecht signalled earlier this week that it could begin to cooperate, and there are also now suggestions that Marcelo Odebrecht himself could collaborate; his lawyer has insisted his client will appeal his conviction.

Prosecutors have reportedly said that no such deal has yet been reached, but testimony in an appeals court by Marcelo Odebrecht could potentially bring the house down.

Within Brazil it could be seriously damaging to President Dilma Rousseff, who has not been implicated in misconduct when she was previously chair of Petrobras but who is facing impeachment proceedings for an unrelated administrative matter, and to former president Luiz Inácio Lula da Silva, who is also legally embroiled in the saga.

Further revelations could also have repercussions in some of the countries where the probity of Odebrecht’s business practices have long been questioned, such as in the Dominican Republic, Ecuador, Panama, Peru and Venezuela.