Brazil's Marcelo Odebrecht Gets 19 Years in Jail in Carwash

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  • Former CEO of Latin America's largest builder arrested in June
  • Crimes include money laundering and criminal association

Marcelo Odebrecht, the former head of one of Brazil’s largest industrial conglomerates, was sentenced to 19 years and four months in jail for crimes including corruption and money laundering.

Odebrecht, who ran the Odebrecht SA holding company that owns Latin America’s largest builder until after his arrest last year, was also convicted of criminal association, judge Sergio Moro said in a sentence attached to public court records on Tuesday.

Marcelo Odebrecht

Photographer: Kiyoshi Ota/Bloomberg

Odebrecht was first detained on June 19 as part of a coordinated federal police operation where executives at other construction groups were also arrested. Investigators have been looking into a scheme where insiders at state-controlled oil company Petrobras and a cartel of contractors allegedly raked-off vast sums from inflated construction and service contracts. Odebrecht, the grandson of late Norberto Odebrecht, founder of the conglomerate owned by the billionaire family, is one of the most prominent executives taken into custody in the so-called Carwash investigation.

The probe, Brazil’s biggest-ever corruption case, has spread across state-owned companies, the private and public sectors, and spilled over into other countries like Peru. In Brazil, supporters and opponents of former President Luiz Inacio Lula da Silva have vowed street protests in the coming weeks after the party founder was briefly detained by police in Sao Paulo on Friday for questioning in the investigation.

"The one thing that’s very clear is how this corruption really penetrated politics and some of Brazil’s private sector," said Peter Hakim, president emeritus of the Inter-American Dialogue, in a phone interview from Washington. "Odebrecht was sort of key as the biggest and most well-known but there were a dozen other construction companies. This is the way they did business."

Odebrecht’s lawyers said in an e-mailed statement that the decision was a “grave judicial mistake” and they will continue fighting for his freedom. Their arguments, published in the sentencing release by the court, were that judge Sergio Moro revealed his bias towards the defendant in comments to the press, used provisional jailing of defendants to pressure for plea deals, and that Odebrecht wasn’t given the full right to defense.

In his sworn testimony, Odebrecht referred questions from investigators to the written document he had submitted prior to the hearing.

"I, personally, never involved myself in the management of more than 300 companies in 15 different sectors that make up the group," Odebrecht said in his written response to investigators. "Be it because that interference would be humanly impossible, or because it’s totally contrary to our culture of planned delegating, entrepreneurship and decentralization of the group’s businesses."

Odebrecht’s billionaire family’s empire spans across more than 20 nations. The company over which he presided, Odebrecht SA, has built Brazilian World Cup stadiums, Cuba’s deep water port, Miami’s airport and is Angola’s biggest private employer. The conglomerate is a major and aggressive donor to Brazilian political campaigns.

Marcio Faria and Rogerio Santos, former executives at the conglomerate, were also sentenced to 19 years and four months in jail, according to the statement. 

O Globo reported earlier Tuesday that Odebrecht and the former head of building conglomerate OAS want to reach a joint plea bargain in which they would provide information to prosecutors about corruption at Petrobras.

"He wouldn’t have to serve 19 years then. He’d probably be out in a few years," Hakim said.

In his sentencing, Moro says Odebrecht was the main person responsible for coordinating bribe payments to people including Petrobras officials through non-declared offshore accounts. The accusation was based on documented proof of money transfers, messages intercepted between Odebrecht and other executives and confirmation from collaborators. Odebrecht was sentenced on 11 counts of active corruption, involving $64 million in bribes to Petrobras agents. He was also sentenced on 50 counts of money laundering and for the crime of criminal association.

“These are millionaire operations structured with elegance that could only be done in an organized way, by people with control over the business group and its main companies,” the sentence said. “There is an array of robust evidence that allows us to conclude, beyond a reasonable doubt, that payment of bribes from the Odebrecht group to agents of Petrobras, with some of the funds going to political financing, was not an isolated act, but part of the Odebrecht group’s corporate policy.”