Peru: 'Odebrecht bribes to Toledo channelled through Barclays, Citibank'

Odebrecht transferred USD9.6m in bribe money into accounts at Barclays and Citibank in London held in the name of companies registered in Scotland and the British Virgin Islands controlled by a Peruvian-Israeli businessman who acted as a front for former Peruvian president Alejandro Toledo.

It’s a snapshot of the sort of detail that could emerge time and again in the weeks ahead as prosecutors across Latin America piece together evidence of the money flows at the heart of the international bribery scheme that the Brazilian construction giant used to secure billions of dollars’ worth of public works contracts.

Chief prosecutors from various countries in the region are due to meet with their counterparts in Brasilia this week to swap notes after 77 executives from Odebrecht in December signed leniency deals in which they admitted paying USD800m in bribes over the previous decade in a dozen countries, mostly in Latin America.

How Odebrecht’s so-called ‘structured operations’ department, its fully-functional bribery unit, operated—and the identity of the politicians and officials to whom the bribes were paid outside Brazil—is now coming out of the shadows as the most diligent prosecutors in these countries start to formulate criminal charges.

Peru, where Odebrecht admitted to paying USD29m in bribes, is showing the way.

Anti-corruption prosecutor Hamilton Castro last week accused Toledo of receiving USD20m to ensure Odebrecht won a jungle highway contract. Much of that money allegedly went through Peruvian-Israeli businessman Josef Maiman, a close friend of Toledo.

A neat table compiled by prosecutors and leaked locally identifies USD9.6m in wire transfers sent from Odebrecht-linked entities to Maiman-controlled accounts between 2008 and 2010.

Ten of the transfers were sent to an account held at a branch of Barclays in Knightsbridge in the name of Warbury & Co, a firm registered in Glasgow, Scotland, and seven to accounts at Citibank in London held in the name of Merhav Overseas Ltd and Trailbridge Ltd, two companies registered in Tortola, BVI.

Peruvian investigators are also probing top officials during the governments of Ollanta Humala and Alan García, as well as also gathering evidence of bribes paid by other Brazilian building firms Camargo Correa and OAS, whose respective bribery schemes have been eclipsed by the media focus on Odebrecht.

An arrest warrant has been issued for Toledo, who is suspected to be in the US. He has denied receiving the bribe money and claims he is the victim of ‘political persecution’.

In Colombia, the Odebrecht affair has also triggered a political scandal. Following the arrest of former Senator Otto Bula, prosecutor Nelson Martínez revealed a dramatic twist to the tale last week when he said that Bula claimed to have passed on USD1m to President Juan Manuel Santos’ 2014 election campaign. Odebrecht also supposedly channelled money to the campaign of Santos’ opponent in 2014, Oscar Iván Zuluaga.

Foreign funding of election campaigns is illegal in Colombia, but it is a less serious crime than paying bribes with the express aim of manipulating a public tender to secure a contract. That was Odebrecht’s objective when it sent USD6.5m to Gabriel García Morales, a former deputy transport minister who last month admitted receiving the money to ensure that the Brazilian company was the only bidder for a road project.

The money appears to have been deposited by Odebrecht into an account at Banca Privada d’Andorra in the name of a Panamanian company. In March 2015 the US Treasury said BPA was at the centre of a corruption scheme that syphoned off some USD2bn from Venezuelan state oil company PDVSA.

In Panama the investigation has also taken an unexpected turn with the arrest of Jurgen Mossack and Ramon Fonseca, the founders of law firm Mossack Fonseca, which was the victim of a data leak last year. Police raided the company’s office in São Paulo a year ago in connection with the bribery scandal in Brazil.

Panama features disproportionately in the overall investigation. Several Panamanian companies appear to have been used in the different strands of Odebrecht’s bribery machine, and some local banks have also been implicated. Panama’s banking superintendent last week took control of FPB Bank, a Brazil-linked entity.

Elsewhere, the ramifications have so far been less dramatic. In the Dominican Republic, Odebrecht has agreed to pay a fine of USD184m, double the amount it paid in bribes. In Ecuador, Odebrecht-related misconduct has become part of candidates’ accusations and counter-accusations ahead of the 19 February elections. In Venezuela, where the largest amount of bribe money was paid by Odebrecht, the only people detained so far were two Brazilian journalists.

But even in the case of Venezuela leads are beginning to emerge.

Strangely included in the document leaked by Peruvian prosecutors detailing Odebrecht’s transfers to Toledo’s alleged financial front Josef Maiman is one referring to Venezuela: USD377,000 to an individual called Lucas Valera, at an account he held at Banque de Luxembourg. Valera was the top Venezuelan official in charge of a project to build a bridge over the River Orinoco. It was built by Odebrecht.