The Odebrecht Tribulations

It’s been little over a week since the plane carrying Teori Zavacki has crashed. The Brazilian Supreme Court justice had been in charge of investigating corruption accusations against the construction firm Odebrecht. The South American conglomerate was already in the eye of the political storm, but they had at least attempted an apology by issuing a press release titled “Sorry, Odebrecht has messed up”.

The plane-fall seems to have finally pushed them over the brink as Odebrecht has just announced they are willing to sell off their Peruvian operation amidst pressure from the country’s president Pablo Kuczynski. These projects included a US$5 billion natural gas contract which has just been terminated by the government.

The most recent development of the Odebrecht quagmire has been the end of the plea bargain hearings last Thursday carried out by Zavacki’s auxiliary judges. Seventy-seven current and ex-board members of Odebrecht swore under oath their confessions were accurate and had not been coerced by any of the members of the prosecution team.

Marcelo Odebrecht, CEO of Odebrecht, has himself spoken and apologised for his wrongdoings at the court hearings. Last March he received a prison sentence of nineteen years, which he is currently serving.

Currently there is a heated debate among the parties involved in the affair whether the President of the Supreme Court should take over the case, or a new magistrate should be appointed as a replacement for Zavacki. This would only enable the Brazilian judiciary system to proceed to review and approve the plea bargains that have been struck, which would in turn allow for the investigation of government officials and politicians linked to the corruption scandal.

Two months have passed since Odebrecht made their apology and hopes for a fast resolution are low. The Brazilian economy is currently mired in one of the deepest slumps of its history when only a few years ago they were one of the world’s fastest growing markets, with 2010 growth clocking in at 7.5%. The Odebrecht scandal is but a chapter of “Car Wash” –  the long-enduring corruption investigation by the Brazilian government which also includes the Petrobras scam, amounting to US$1.59 billion. Odebrecht would double the total sum of money of the Car Wash affairs.

To the observing world, Brazil’s cyclicality in recent years seems but a lamentable example of Newton’s universal law of gravitation: sharp rises tend to be followed by steep falls.

Martin Geller 

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