Saturday, February 21, 2015

Brazil Prosecutors Seeking $1.6 Billion from Firms Accused in Petrobras Scandal


SAO PAULO – Brazilian prosecutors on Friday filed civil lawsuits against six construction companies accused of forming a cartel to artificially drive up the price of their contracts with state-controlled oil giant Petrobras, saying they should pay roughly $1.6 billion in penalties.

That amount includes losses by the Brazilian Treasury, fines and punitive damages, while the construction firms named in the suits are Camargo Correa, Sanko-Sider, Mendes Junior, OAS, Engevix and Galvao Engenharia, the federal prosecutor’s office in the southern state of Parana said.

That civil action is parallel to a criminal investigation into alleged kickbacks paid to former Petrobras executives that is headed by federal Judge Sergio Moro, based in the southern city of Curitiba.

The civil lawsuits are based on testimony by jailed former Petrobras downstream director Paulo Roberto Costa, who reached a plea deal, the prosecutor’s office said.

Erstwhile Petrobras directors and former top executives of seven construction companies are among those who have already been formally charged in connection with the scandal.

Corrupt Petrobras executives received kickbacks equivalent to between 1 percent and 3 percent of the inflated contracts, according to prosecutors, which said the cartel of construction companies ran the scheme from between 2004 and 2014.

The scandal, in which money also was funneled to politicians, has led to the Feb. 4 resignation of Maria das Graças Silva Foster, who was replaced as Petrobras’ CEO by Aldemir Bendine, former chief executive of state-run bank Banco do Brasil.

The criminal probe, meanwhile, continues under strict judicial secrecy and the Attorney General’s Office is expected to present formal charges in the coming weeks, publicly identifying the politicians allegedly implicated.

Brazilian media say scores of politicians will face charges, most of them from parties aligned with President Dilma Rousseff.


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