Major Odebrecht Corruption Cases and Investigations in 2019

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Major Odebrecht Corruption Cases and Investigations in 2019 ANALYSIS Written by Camilo Carranza, Seth Robbins and Chris Dalby - FEBRUARY 20, 2019

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Since beginning in Brazil with the “Operation Car Wash” (“Operação Lava Jato”) investigation in 2014, the Odebrecht corruption scandal has been headline news across Latin America. Presidents, lawmakers, and business tycoons alike have been charged and jailed across the region. Here, InSight Crime presents a round-up of investigations or trials against prominent figures in Latin America and the Caribbean.

Mexico: Mexico has shown a lethargic approach to the Odebrecht scandal. The only high-profile name being investigated for the largest corruption scandal to rock Latin America is Emilio Lozoya Austin. The former president of the

state-owned oil company Petróleos Mexicanos (Pemex), who served under former President Enrique Peña Nieto, is accused of conducting a corruption scheme that involved ghost companies between 2012 and 2016.

In addition, Mexican prosecutors believe that Austin used the hefty bribes received from Odebrecht to fund the electoral campaigns of the Institutional Revolutionary Party (Partido Revolucionario Institucional – PRI), including that of Peña Nieto. Many in Mexico believe that the lack of accountability and prosecution by the federal government was a way for the former and current administration to protect those who were involved with Odebrecht. In a country known for its high levels of impunity, it remains to be seen if this case will eventually lead to more far-reaching investigations.

In February, President Andrés Manuel López Obrador vowed that the investigation into Odebrecht would continue, which may see more inquiries begin soon.

Dominican Republic: Preliminary Odebrecht hearings have dominated news headlines in the Dominican Republic in recent weeks.

Known for its entrenched corruption, the Caribbean nation is currently investigating seven people that reportedly received more than $92 million in bribes from the Brazilian construction giant.

Two names that stand out from the investigation are current Senator Tommy Galán and former Public Works Minister Víctor Díaz Rúa. Both men are members of the Dominican Liberation Party (Partido de la Liberación Dominicana – PLD), which is gearing up for the 2020 presidential election. A guilty conviction could potentially tarnish the image of the party and hamper its chances at retaining power as the current president, Danilo Medina, is also a member of the PLD. El Salvador: Former president Mauricio Funes is being investigated for allegedly embezzling $351 million. Odebrecht is suspected of paying out between $1-3 million to Funes during 2009 presidential campaign. Funes, who was president from 2009 to 2014, is also under judicial investigation for reportedly paying off deputies in order to obtain favorable votes in the Legislative Assembly during his presidency.

The ex-president has four arrest warrants out against him for corruption cases. He is now residing in Nicaragua protected by political asylum granted by President Daniel Ortega. However, the spokesperson of newly-elected president Nayib Bukele announced that the government will begin talks with Nicaragua to demand Funes’ deportation.

Guatemala: Guatemala’s current investigation into Odebrecht is centered on the former minister of infrastructure, and current fugitive, Alejandro Sinibaldi. The Attorney General’s Office and the International Commission Against Impunity in Guatemala (Comisión Internacional Contra la Impunidad en Guatemala – CICIG) claim that Sinibaldi led a criminal structure within the Communications Ministry. Sinibaldi is currently under an Interpol search warrant and an additional eight people with close ties to him are being sought by authorities, including his brothers, Alvaro and Luis Rodrigo Sinibaldi.

Another key figure being investigated in Guatemala is former presidential candidate Manuel Baldizón, who was arrested in the United States in January 2018. Baldizón is accused of allegedly receiving bribes from Odebrecht officials to help them with public works contracts in the Central American nation. After a failed attempt to seek asylum in the United States, Baldizón decided to withdraw his request and is now pending extradition to Guatemala.

A constitutional crisis has unfolded in Guatemala after President Jimmy Morales decided to ban the CICIG from the country, a move that has been met with public and international backlash. As a result of the absence of the CICIG, the latest hearing against Sinibaldi and Baldizón was suspended and rescheduled for February 27, 2019.

It remains to be seen what impact the ongoing crisis with the CICIG will have on the future of the case.

SEE ALSO: Coverage of Money Laundering Panama: Former President Ricardo Martinelli, who is under arrest, and other people with close ties to his presidency are currently under investigation for allegedly receiving bribes from Odebrecht. Panamanian prosecutors indicate that from 2009 to 2014, the duration of Martinelli’s presidency, payments surpassing $96 million were awarded for infrastructure projects such as road improvement in Chanis, the Tocumen Airport expansion, the urban renewal of Curundú, improvements to Line 1 of the Metro, and many others.

As a result, the Special Anti-Corruption Prosecutor’s Office in Panama launched an investigation against the former economy minister Frank de Lima, who is accused of receiving at least $7 million in improper payments.

Another high-level name that is currently under investigation is the former minister of public works, Jaime Ford.

Ford is linked to accepting illegal bribes from the Brazilian company, as well as being accused of overpricing the Arraijan-La Chorrera Highway project for illicit purposes.

Colombia: In Colombia, Odebrecht paid at least $32.5 million in bribes to ensure contracts for the building of the Ruta del Sol highway and other infrastructure projects.

Former Senator Otto Nicolás Bula Bula, who was sentenced to two years in jail for bribery, has been the government’s key witness in unraveling the graft scheme. The investigation has ensnared a number of government officials during the administrations of both former presidents Alvaro Uribe and Juan Manuel Santos, including former senator Bernardo Miguel Elías.

Colombia’s Attorney General Néstor Humberto Martínez, however, has found himself in the spotlight recently after Jorge Enrique Pizano, an auditor, revealed secret recordings in which he talked about contract irregularities with Martínez, who was at that time an attorney for Corficolombiana, a minor partner of Odebrecht. Pizano’s tapes with Martinez came to light in a television interview.

Pizano, who was suffering from cancer and ultimately died of a heart attack, provided the interview on the condition that they only broadcast it in the event of his death. Martinez’s conflict of interest doesn’t stop there.

He was also legal advisor to Luis Carlos Sarmiento, Colombia’s richest man and founder of the conglomerate Grupo Aval. Grupo Aval is a part owner of Corficolombiana and is currently cooperating in a US Justice Department investigation, according to Reuters.

Ecuador: Ecuador’s Odebrecht case illustrates a close-knit corruption structure that took place under the presidency of Rafael Correa. His childhood friend and ex-vice president, Jorge Glas, who is already serving a jail term for the corruption scandal, has been accused by Luis Mameri, Odebrecht’s vice president in Latin America, of accepting further bribes than initially known through a company named Glory International.

In September 2018, the Ecuador’s Attorney General’s Office opened a preliminary investigation against eight people for allegedly indulging in organized crime within Odebrecht’s corruption scheme. Among those investigated is former President Rafael Correa, who is currently residing and seeking asylum in Belgium. In

addition, former legal secretary of the presidency Alexis Mera, former Interior Minister José Serrano, and former Attorney General Diego García are also being investigated for their role in the Hydroelectric San Francisco Project.

Ecuador’s Attorney General’s Office recently announced that an additional 11 preliminary investigations were going to be targeting Rafael Correa, Alexis Mera, and Jorge Glas. The latest announcement solidifies Ecuador’s efforts to punish those involved in this corruption scandal.

SEE ALSO: Coverage of Elites and Organized Crime Peru: To say that the Odebrecht scandal has rocked the political class in Peru would be an understatement. Maria Sokolich, Peru’s new attorney general following the controversial resignation of Pedro Chávarry, is currently overseeing the investigation into some of the country’s top politicians, which are holding or have held the highest office in this country.

Current president Martín Vizcarra is being investigated for an alleged link between his company and Odebrecht between 2006 and 2008. His predecessor, Pedro Pablo Kuczynski, has an ongoing investigation against him — which forced his resignation in March 2018 — for alleged consultancies that his company, Westfield Capital, made to Odebrecht between November 2004 and December 2007. Former president Alan García, who was denied an asylum request in Uruguay after the allegations came to light, is accused of taking bribes during the construction of the Lima Metro.

The two other former presidents being investigated for allegedly taking bribes are Alejandro Toledo and Ollanta Humala. In March, Odebrecht’s former executive in Peru, Jorge Barata, is expected to declare this in Brazil.

Barata’s testimony could potentially create new shockwaves in the Andean nation.

Recently, Odebrecht has announced it will cooperate with the Peruvian government. Its former executives in the country are set to be interviewed, which may yet lead to further revelations.

Argentina:

The Odebrecht investigation in Argentina threatens dozens of former high-level officials linked to public works projects during the presidencies of Néstor Carlos Kirchner (2003-2007) and Cristina Fernández de Kirchner (2007-2015). Most notably are the investigations into Julio de Vido and Daniel Cameron.

Julio de Vido, a former minister of federal planning under Fernández, turned himself into authorities in October 2018. De Vido is accused of being part of the “Road Works” scandal, which involves the alleged embezzlement of public funds through tender processes for road works in the former president’s home province of Santa Cruz, as well as other infrastructure projects under his supervision.

Meanwhile, former Energy Minister Daniel Cameron is being investigated as part of a case known as “Skanska II,” where irregularities in the expansion of gas pipelines in the country are being linked to a corruption scheme with the collaboration of Odebrecht. However, the level of corruption into the Kirchners’ is more profound.

Reports suggest that an additional 14 businessmen and five former employees are also being investigated for many illicit activities in cooperation with the Brazilian construction giant.

Bolivia: Bolivia’s has a history of favorable dealings with Brazilian companies that dates back to 1987. In that year, thenEnergy Minister Carlos Morales Landívar was accused of using his political influence to favor the Brazilian company, Andrade Gutierrez. Now, Landívar is being accused of being involved in 2003 with Camargo Correa — among the 13 major companies in Brazil under investigation in the Lava Jato case — when he was minister of services and public works.

However, the names directly linked to the Odebrecht case are the former president and current 2019 presidential hopeful Carlos Mesa and his successor, Supreme Court Justice and former president Eduardo Rodríguez Veltzé.

Both are being investigated for allegedly receiving bribes from Odebrecht during their presidencies, which spanned between 2003 and 2006. Mesa’s investigation could play a pivotal role in the presidential elections that are to be held in October. A conviction in Mesa’s case could leave the door wide open for Evo Morales to be reelected.

Brazil: Over the past five years in Brazil, more than 77 company executives have agreed to plea bargains, one president was impeached, another former president is currently in jail, and his successor is now also being investigated as a result of the Odebrecht scandal. That’s just a slight glimpse of the far-reaching impact that the Lava Jato case has had on South America’s largest nation.

On February 6, currently jailed former President Luiz Inácio Lula da Silva, was indicted for additional charges that would add 13 extra years to his current sentence. Lula is accused of receiving illicit benefits during his mandate from 2003 to 2010. In addition to Lula, other people close to his inner circle have been accused and arrested for corruption. One of those people, former Chamber of Deputies President Eduardo Cunha, has been in prison since 2016. Cunha is accused of receiving a $5 million bribe. However, despite his current arrest, Brazilian prosecutors have requested further charges against him.

Meanwhile, Aécio Neves, a former governor and 2014 presidential candidate, is accused of receiving bribes in exchange for support for legislation mainly regarding works that were of interest to Odebrecht when he was governor of Minas Gerais state. Neves’ investigation is ongoing while he maintains a seat as a senator for Minas Gerais. Lastly, former President Michel Temer (2016-2018) has made headlines as Brazil’s federal police have asked for him to be charged with bribery and money laundering. According to officials, while vice-president in 2014, Temer and his Brazilian Democratic Movement Party (Partido do Movimento Democrático Brasileiro – PMDB) received more than $2 million from Odebrecht.

Now that Sérgio Moro, who was once leading the Lava Jato corruption probe, is the new justice minister under President Jair Bolsonaro, close attention will be focused on sweeping new legislation that he has proposed to combat corruption.

Argentina Guatemala

Bolivia

Brazil

Infographics

Colombia Mexico

Dominican Republic

Money Laundering

Ecuador

Panama

El Salvador

Elites and Organized Crime

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Peru

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