Brazil: Odebrecht and its tell-all “end-of-the-world” bribery confession

It’s been dubbed the “delação do fim do mundo” – the “end-of-the-world confession”. It is the brainchild of Emilio Odebrecht, patriarch of his namesake construction company. And its political and criminal consequences, not only in Brazil but elsewhere in Latin America, promise to be seismic.

About 75 executives from Latin America’s biggest builder are poised to sign leniency deals with prosecutors who have led Operação Lava Jato, the near three-year-old investigation into the multi-billion dollar corruption network linking captains of industry, top politicians and Petrobras officials.

The agreement, which has been nine months in the making, will see Odebrecht the company pay a USD2bn fine and the executives involved become state witnesses in exchange for reduced jail sentences.

Under the deal, Marcelo Odebrecht, the company’s former CEO who is already serving a 19-year sentence, and his colleagues have pledged to disclose all about their bribery schemes: to whom, how much and for which contracts they paid millions in bribes over the past decade or so.

For Odebrecht this is sensible. It will allow it to resume bidding for lucrative government contracts in Brazil, restructure its massive debts, it will have 20 years over which to pay the USD2bn fine, and Marcelo is likely to be released early and say good-bye to his prison exercise yard next year.

And it may even bring sweet revenge for his father Emilio, who vowed to his family that if one of the Odebrecht clan ended up in prison, the authorities would also have to put former presidents Luiz Inácio Lula da Silva and Dilma Rousseff behind bars.

Indeed the political fall-out from the “delação do fim do mundo” could be massive. It has already sown panic in Brasilia as it is rumoured to criminally implicate as many as 200 politicians, including legislators and governors, as well as Lula, Rousseff, and incumbent President Michel Temer.

Dozens of top politicians have already been accused of taking bribes or passing along brown envelopes from Odebrecht to help it secure billions of dollars’ worth of contracts. But this time it will be different.

Now, evidence will be provided to prosecutors not by obscure money-changers and the painstaking work of police detectives, but by those who were in the driving seat: Odebrecht’s top executives.

The mega-snitch will also have repercussions elsewhere in Latin America. Odebrecht’s executives-turned-witnesses will likely reveal how the company’s euphemistically-labelled ‘structured operations’ department gave it the edge in its international growth strategy by bribing presidents and top officials in places like Argentina, Dominican Republic, Ecuador, Panama, Peru and Venezuela.

To be sure, the political ramifications won’t be immediate. Prosecutors are likely to spend several months taking formal witness statements and cross-checking this information with existing and fresh data. But they will be helped along by a raft of fresh documents, sent by Swiss prosecutors earlier this month, detailing transfers from secret Odebrecht-controlled bank accounts to the recipients of bribes.

None of this bodes well for Temer, who is attempting to push through unpopular austerity measures, and who has already lost several ministers to corruption allegations since coming to office in May. Because of immunity rules, while in office Temer would probably escape any direct criminal charges that might emerge from the Odebrecht deal with prosecutors, but he already appears to feeling the heat.

It may not be the end of the world as we know it, but Odebrecht’s confession and leniency deal is likely to mark a watershed moment for Brazil.