Buenos Aires Times

world ODEBRECHT SCANDAL

Odebrecht boss says worst is over after vast corruption scandal

Former boss Marcelo Odebrecht is still under house arrest after spending more than two years in prison.

Friday 7 December, 2018
NELSON ALMEIDA/AFP
NELSON ALMEIDA/AFP Foto:Brazilian Fabio Januario speaks at Odebrecht headquarters in Sao Paulo, Brazil, on December 4, 2018.

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The reputation of Odebrecht, a Brazilian construction giant, has become linked with corruption after it admitted to paying hundreds of millions of dollars in bribes in a dozen countries to secure public works contracts.

But, following a corporate overhaul and the conviction of its former boss Marcelo Odebrecht – still under house arrest after spending more than two years in prison – the group insists it has turned a corner.

"The most critical period has passed," said the CEO of the Odebrecht conglomerate's core engineering and construction division, Fabio Januario, 47, named to his post following the scandal.

He emphasized in an interview with AFP that the company is forging on with business, while acknowledging that some corruption cases were still hanging over the company from probes in Brazil, the US, Switzerland, the Dominican Republic, Guatemala, Panama and Ecuador.

He did not give details of those cases because "we have to maintain confidentiality."

But he said "big progress" had been made, notably anticipating an imminent agreement with authorities in Peru, where four former presidents faced allegations of taking Odebrecht cash.

Sheen lost

Odebrecht, however, is far from having recovered its sheen.

It lost its investment grade rating following the revelations that formed part of the sprawling Car Wash corruption probe in Brazil that has claimed numerous corporate and political scalps.

In December 2016, the US Justice Department announced Odebrecht S.A. and its petrochemical joint venture Braskem would pay a US$3.5 billion fine – a record in international corruption cases – after admitting to paying US$788 million in bribes across 12 countries.

Brazilian officials discovered Odebrecht had been especially active in bribing politicians to help secure inflated construction contracts and to influence legislation.

Latin American governments are now wary of giving Odebrecht public contracts, with Colombia notably looking to block it from competing for tenders for 20 years.

And ratings agencies say the Brazilian company is burning through cash, reducing liquidity.

Januario, however, was upbeat, noting that 11 of 18 public works it was handling were outside Brazil. He said Odebrecht's "transformation" should reassure public and private sector contractors, and asserted that cash-flow was "healthy."

He also dismissed any suggestion of changing Odebrecht's name to put distance between the company and its recent disgrace.

"Despite the problems, the brand is recognized for its competence, for its technical excellence," he said. "Nobody combines cement, sand and steel and has more capability to carry out projects than our company."

“Non-partisan”

Januario also downplayed any negative outlook from a new government taking charge in Brazil next month that will be headed by a far-right president, Jair Bolsonaro, who campaigned on anti-corruption policies, and whose justice minister will be a judge who led the Car Wash probe.

"We are non-partisan, we provide services to society through its governments," Januario said. He said he was "optimistic" about the incoming justice minister.

"Our vision is positive," he said.

The corporate behemoth was founded in 1944 in the northeastern state of Bahia, by Norberto Odebrecht, grandfather of Marcelo.

At its pre-scandal peak, in 2015, it had 128,000 employees, with gross revenues of around US$39 billion and activities in 25 countries.

But afterward its payroll was cut by a third as revenues shrank.

Originally sentenced to 19 years in prison, Marcelo Odebrecht eventually struck a plea bargain, testifying in exchange for a reduced sentence that allowed him to move to house arrest in his luxurious Sao Paulo mansion.

His testimony implicated outgoing President Michel Temer and many of the country's top politicians.

Moises Avila/AFP

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