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latin america OPERATION LAVA JATO (“CAR WASH”)

Ex-Odebrecht CEO, symbol of giant Brazil graft probe, leaves prison – and enters family feud

Marcelo Odebrecht is out of jail for Christmas. But not all the disgraced company chief’s family are happy about it.

Saturday 23 December, 2017
Marcelo Odebrecht, arrives at his house in São Paulo, Brazil, after being released from prison in the southern city of Curitiba.
Marcelo Odebrecht, arrives at his house in São Paulo, Brazil, after being released from prison in the southern city of Curitiba. Foto:AFP.

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The good news for Marcelo Odebrecht, the tycoon at the centre of Brazil’s biggest ever corruption scandal, is he’s out of prison in time for Christmas. The bad news: not all his family is celebrating.

The former CEO of Latin America’s biggest construction company, the family firm Odebrecht SA, left prison in the southern city of Curitiba after serving two-and-a-half years of a 10-year sentence for moneylaundering and bribery. For the remainder, Odebrecht will be under house arrest in São Paulo.

But while the courts have finished with him for now, a feud with his father and other members of the powerful family looms, raising questions over the future of the man once known as “the prince” and the giant company that once embodied Brazil’s rise.

Building everything from the Miami Heat basketball arena to a hydroelectric dam in Angola, Odebrecht is no ordinary company.

At the peak of his powers as CEO, the wiry, intense-looking Marcelo Odebrecht was one of the most influential people in Brazil. But in 2015 he was arrested and later convicted for his central role in the Lava Jato (”Car Wash”) embezzlement and bribery scandal that three years later continues to shake Brazil’s elite.

The revelation that he’d been greasing the palms of politicians to obtain contracts in a string of countries triggered the “prince’s” brutal downfall. And when the full scope became clear – Odebrecht SA even had a corporate department dedicated to bribery – the company itself was thrown into peril. Odebrecht’s Curitiba lock-up has been relatively cushy. Cell doors are left open, there’s a microwave, fridge and television. The 49-year-old has reportedly become something of a fitness fanatic while inside.

However, house arrest will be a lot pleasanter. Odebrecht and a police escort flew to São Paulo on a private jet. He then went to his home in the ultra-posh Morumbi neighbourhood, where he lives with wife Isabel and their three daughters.

A spokeswoman for the “Car Wash” probe’s headquarters confirmed that Odebrecht must spend the next two-and-a-half years at home with a monitoring anklet. Another two-and-a-half years will follow with daytime excursions allowed, before a final period in which he needs to be at home only on weekends.

FAMILY FEUD

What Odebrecht won’t get is back to business as usual. Much of his family’s construction behemoth was dragged into the Car Wash pay-to-play scandal. However, Odebrecht is the one accused of ramping up graft to industrial levels upon taking over in 2008.

When investigators closed in, he defiantly tried to prevent a plea bargain. However, his father Emilio spearheaded negotiations with prosecutors, according to Globo and other local media, and eventually 77 company executives, including Marcelo, spilled the beans on their mass bribery of politicians. The company ended up agreeing to pay a whopping US$2.6 billion in fines to the Brazilian, Swiss and US governments.

In return, the judge gave Marcelo a reduction in his original 19-year sentence to 10 years, lenient treatment for his father and a chance for the company to recover. That surrender, say multiple Brazilian media reports, left the family bitterly split.

Marcelo Odebrecht’s father is reported by Globo to have visited him just twice in prison, while Folha de São Paulo reports that he has also become estranged from his sister, mother, and several major figures from the firm. Three uncles sided with the father, just one with the son. “There were two groups in the company,” an Odebrecht board member told the UOL news site. “Emilio’s side won.”

Odebrecht SA is going through a profound makeover and on the eve of Marcelo’s release, father Emilio, 72, announced the latest reforms: he is resigning as chairman of the board and from now on family members will not be able to serve as CEO.

Daniel Vargas, a professor at the Getúlio Vargas Foundation in Rio de Janeiro, says the company is “making big efforts” to break with the old way of doing business, but that the whole country needs to show it can also change after Car Wash.

Success for the company’s new direction will depend on the rest of the market also turning honest. Otherwise, “if Odebrecht don’t take part in corruption, how are they going to remain competitive?” For the ambitious Marcelo Odebrecht, there are no easy paths either. “I don’t know how he will handle himself,” Vargas said, “but it is sure that he has been deeply impacted by these scandals.”


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