Thursday, May 30, 2024

LATIN AMERICA | 10-11-2017 11:17

Odebrecht scandal continues to make waves in Latin America

Ecuador VP facing indictment, former Panama president's sons got $50M in 'undue payments'

The sprawling corruption investigation involving Brazilian construction conglomerate Odebrecht is continuing to make waves across Latin America.

Yesterday, Ecuador's attorney general accused Vice-President Jorge Glas of unlawful association in the giant graft case.
Glas is in pre-trial preventive custody and has not been formally charged, but attorney general Carlos Baca said on Twitter he was seeking an indictment on "charges against the vice-president and 12 others in the crime of unlawful association."

The crime carries a penalty of three to five years in prison. The prosecution has previously warned that Glas and other defendants in the case could also be charged with more serious crimes, such as bribery and illicit enrichment.

Glas was taken into custody on October 2, the highest-ranking politician to be connected to the multi-million Odebrecht kickbacks case, which has cast a cloud over politicians in several Latin American countries, including Mexico, Peru, Panama and Venezuela.

He told the AFP news agency in an October 14 interview in Quito's Penitentiary 4 prison that he was a victim of the construction giant's revenge after he was instrumental in kicking the company out of Ecuador in 2008 following a dispute over repair of a hydroelectric plant.

Glas, who was minister of strategic sectors before becoming vice president in 2013, has denied any link to the Odebrecht scandal, though his uncle, Ricardo Rivera, has been arrested for his alleged involvement.

The Ecuadorean prosecutor's office meanwhile announced this week that it would press tax fraud charges against Odebrecht.
Odebrecht is accused of failing to declare US$120 million of revenue in Ecuador between 2012 and 2016, chief prosecutor Carlos Baca said.

"Today, we formally asked the Justice Department to set a day and time to formulate charges," Baca said in a statement.
The allegations against the Brazilian company, which has yet to respond, rose following a review of an internal revenue service report filed last March.

The report, which also implicated four of the company's legal representatives in Ecuador, contained "tax information which shows the company had omitted revenues and presented sales receipts for non-existent operations carried out by ghost companies."
In total, 18 people in Ecuador are accused of playing a part in the ongoing Odebrecht corruption scandal. It is alleged political figures and ex-presidents across 12 Latin American and African countries accepted millions in bribes in exchange for public construction contracts.

Under investigation by the US Justice Department, Odebrecht agreed in December to pay a record US$3.5 billion fine after admitting to paying US$788 million in bribes across 12 countries to secure contracts, including US$35 million at least in Argentina.
According to the US Justice Department, Odebrecht paid Ecuadorean officials around US$33.5 million between 2007 and 2016.

Panama. In Panama, the scandal made headlines this morning after two sons of former president Ricardo Martinelli were accused of receiving more than US$50 million in "undue payments" from the Brazilian firm.

The Attorney General's Office alleged in a statement that there were several multimillion-dollar transfers to Ricardo Alberto and Luis Enriquez Martinelli through accounts in Panama and abroad in 2010-2014.

It said the allegations are based on information from a cooperating witness in the investigation: Andre Campos Rabello, the former Panama manager for Brazil's Odebrecht.

The family has denied involvement by the sons in the bribery scandal and alleges persecution by political foes. The former president, who also denies any wrongdoing, is currently detained in the United States facing possible extradition to Panama on charges of embezzlement and political espionage.

Bribes involving Odebrecht include at least US$59 million in Panama, although authorities say the real figure is likely much higher.
The scandal has already implicated former government ministers under the elder Martinelli as well as people linked to the party of current President Juan Carlos Varela.

Reports of the sons' alleged involvement circulated in Panamanian media before Thursday, but this was the first word from judicial authorities.

The revelations came out of a hearing in which a judge approved a cooperation deal with Rabello and two other former Odebrecht executives.

Prosecutors said Rabello testified that the company made irregular payments not for the awarding of contracts but rather to receive "special treatment" to clear administrative hurdles.


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