Olympic Projects Cited in Brazil's Carwash Corruption Probe

  • Odebrecht construction conglomerate had offices raided again
  • Investigators identify possible bribes at metro, port projects

Police and prosecutors pursuing Brazil’s largest corruption scandal are investigating possible bribes at two multi billion-dollar projects related to the 2016 Olympic Games in Rio de Janeiro, according to court documents.

A subway line and an urban renewal project in a downtown port area were cited in a list of projects that may have received illicit funds from executives at the Odebrecht SA construction and engineering conglomerate as part of a vast pay-to-play scheme known as Carwash, authorities said on Tuesday. Odebrecht said in an e-mailed statement it is cooperating with the police operation.

Brazilian police carried out 15 arrest and 28 detention warrants on Tuesday related to a "Structured Operations" department at Odebrecht, which authorities described as specializing in bribing. Former Odebrecht Chief Executive Officer Marcelo Odebrecht is serving a 19-year prison sentence for crimes including corruption and money laundering.

“There were workers specifically dedicated to bribe payments,” prosecutor Laura Goncalves said in a press briefing broadcast from Curitiba, Brazil, where the case is before a judge.

There is “concrete evidence" that Odebrecht used operators in the informal foreign exchange market to make those payments, federal police said in a statement. The scheme went on for as many as five months after police arrested then-CEO Marcelo Odebrecht in June. The alleged kickback scheme also included a soccer stadium in Sao Paulo that hosted the opening World Cup game in 2014, an airport in Goias state and projects in Angola and Argentina, investigators said at the press conference.

Electronic evidence of possible bribe payments linked to a new subway line, which is crucial for transporting fans from Rio’s hotel district to the games, was collected during previous raids at Odebrecht, according to court documents. The evidence shows 2.5 million reais ($698,000) of alleged payment requests related to the metro line. The data also includes the name and address of who would allegedly collect the money, which authorities said was mainly paid in cash.

Another chart shows an alleged 1 million reais in payments related to the Porto Maravilha urban renewal project in downtown Rio. Police used the documents as evidence that a group of Odebrecht executives created an electronic system to organize bribes.

The Odebrecht employees identified in Tuesday’s police action haven’t been charged. The task-force in Curitiba only has jurisdiction to investigate specific projects if they are connected to alleged graft at state-controlled oil company Petrobras, or if federal laws were broken. Any investigations into Olympic projects would be carried out by authorities in Rio state, prosecutor Carlos Lima has said in previous interviews.

Marcelo Odebrecht was sentenced on March 8 to 19 years and four months in jail for crimes including corruption and money laundering. Odebrecht, who ran the 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.

The corruption scheme spread throughout state-controlled companies in Brazil, and even stretched into other countries including Peru. In Brazil, supporters and opponents of former President Luiz Inacio Lula da Silva have taken to the streets in recent weeks after the party founder was briefly detained by police in Sao Paulo earlier this month for questioning related to the probe.

Investigators have been probing a scheme where Petrobras executives and a cartel of contractors allegedly raked-off vast sums from inflated construction and service contracts.

Odebrecht is the grandson of late Norberto Odebrecht, founder of the conglomerate owned by the billionaire family. The conglomerate, which spans across more than 20 nations, has built Cuba’s deep water port, Miami’s airport and is Angola’s biggest private employer. The company is a major donor to Brazilian political campaigns, according to electoral court data.

— With assistance by Yasmine Batista

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