Dominican Republic Arrests Four Accused of Taking Embraer Bribesby and
Those detained include a former defense minister and a colonel
Embraer also facing an investigation by U.S. authorities
The Dominican Republic arrested a former defense minister and three others for allegedly accepting a $3.5 million bribe from Embraer SA in exchange for placing an order with the Brazilian planemaker for military aircraft.
The arrests are part of an investigation that includes U.S. and Brazilian authorities into the 2009 purchase of eight Super Tucano aircraft for $94 million. The Dominican government said they used the planes, which have bubble glass cockpits and noses painted with growling teeth, to combat aerial drops of drugs from South America.
“This sale represented a loan, a debt the country took on,” Laura Guerrero Pelletier, head of the Dominican Special Prosecutor for the Prosecution of Administrative Corruption, said in a statement. “It was rumored that in the process of the sale, they offered a series of bribes and discussed different quantities, which is why we started an investigation.”
The Sao Jose dos Campos, Brazil-based manufacturer is also facing fines from U.S. regulators over the same case under the Foreign Corrupt Practices Act. The company declined to comment today because it remains in talks with the U.S. Justice Department to settle the claims. The company said on July 29 that it had set aside $200 million in connection with the probe, contributing to a second-quarter loss of $99.4 million.
Those arrested today include Pedro Rafael Pena Antonio, defense minister from 2008 to 2010, Air Force Colonel Carlos Piccini, businessman Daniel Aquino Mendez and his son Daniel Aquino Hernandez, the prosecutor’s office said.
In 2007, as many as 200 illicit drug flights flew over the Caribbean country, launching bales of cocaine into deserted sugar cane fields and along the coastline, the government has said. Former Dominican President Leonel Fernandez credited the use of the Super Tucanos with nearly eliminating the drops.
The Dominican arrests come days after a Brazilian federal prosecutor in charge of a probe into systemic tax fraud said he has put aside his investigation -- at least temporarily -- into alleged abuses at Embraer, oil giant Petroleo Brasileiro SA and processed-food producer BRF SA to focus on the cases in which he believes he has solid evidence.
The planemaker’s American depositary receipts rose 1.4 percent to $18.88 at the close of trading in New York.