22 December 2016

Our Odebrecht, our Petrobras...

So Odebrecht is in the news again (here and here). For those who don't know, Odebrecht was, till not long ago, one of Brazil's "success" stories: a construction company with operations spanning the globe. It was an exhibit of South America's "entrepreneurship" until Brazilian Justice Sergio Moro decided to take a closer look into the company's activities in the context of Petrobras' massive corruption scandal.

The core of the issue is, of course, bribe payments to obtain procurement contracts. Odebrecht was at it, as much as any other company, big or small, from LatAm or otherwise, getting deals from governments in the region. That is just how business is done in that part of the world. Whenever procurement contracts aren't assigned directly, using whatever legal emergency provision that allows it, bidding processes tend to be rigged before start: a method typically favoured would be that all companies participating in a given open bid would be under ultimate control of same people.

Brazil's economy is many times the size of Venezuela's. Odebrecht is one of Brazil's largest and most "successful" corporations. 38% of Odebrecht foreign work is meant to originate in Venezuela, where amount of procurement granted since chavismo took over is believed to be over $20 billion. Odebrecht has admitted to a scheme whereby, according to the Justice Department, it "paid approximately $788 million in bribes to government officials, their representatives and political parties in a number of countries in order to win business in those countries." Braskem, a petrochemical company controlled by Odebrecht, also pleaded guilty in the international bribe payment scheme.

And yet, we are meant to believe that of the $788 million Odebrecht only paid $98 million in bribes in Venezuela, to obtain over $20 billion worth of public contracts. This doesn't add up. Regardless of how involved Lula and Dilma Rousseff were in securing contracts directly from Hugo Chavez as a quid pro quo for donations made by Odebrecht to their Workers' Party (PT), $98 million is not even 0.5% of total value. Hardly believable.

Justice Department's authorities, as commendable as their international fight against corruption is, used some lofty language referring to the case:
“Odebrecht and Braskem used a hidden but fully functioning Odebrecht business unit—a ‘Department of Bribery,’ so to speak—that systematically paid hundreds of millions of dollars to corrupt government officials in countries on three continents,” said Deputy Assistant Attorney General Suh.  “Such brazen wrongdoing calls for a strong response from law enforcement, and through a strong effort with our colleagues in Brazil and Switzerland, we have seen just that.  I hope that today’s action will serve as a model for future efforts.”
“These resolutions are the result of an extraordinary multinational effort to identify, investigate and prosecute a highly complex and long-lasting corruption scheme that resulted in the payment by the defendant companies of close to a billion dollars in bribes to officials at all levels of government in many countries,” said U.S. Attorney Capers. “In an attempt to conceal their crimes, the defendants used the global financial system – including the banking system in the United States – to disguise the source and disbursement of the bribe payments by passing funds through a series of shell companies.  The message sent by this prosecution is that the United States, working with its law enforcement partners abroad, will not hesitate to hold responsible those corporations and individuals who seek to enrich themselves through the corruption of the legitimate functions of government, no matter how sophisticated the scheme.”
“This case illustrates the importance of our partnerships and the dedicated personnel who work to bring to justice those who are motivated by greed and act in their own best interest,” said Assistant Director Richardson.  “The FBI will not stand by idly while corrupt individuals threaten a fair and competitive economic system or fuel criminal enterprises.  Our commitment to work alongside our foreign partners to root out corruption across the globe is unwavering and we thank our Brazilian and Swiss partners for their tireless work in this effort.”
“No matter what the reason, when foreign officials receive bribes, they threaten our national security and the international free market system in which we trade,” said Assistant Director in Charge Sweeney.  “Just because they’re out of our sight, doesn’t mean they’re beyond our reach.  The FBI will use all available resources to put an end to this type of corrupt behavior.”
My question, to Justice Department officials, U.S. Attorneys, FBI, DEA, Homeland Security, DEA, and SEC is: when will you act on the information you already have about Venezuela's Odebrechts? When will you start issuing indictments against PDVSA, Rafael Ramirez, Baldo Sanso, Diego Salazar, Nervis Villalobos, Diosdado Cabello, Wilmer Ruperti, Derwick Associates, David Osio, Danilo Diazgranados, Moris Beracha, Pedro Torres Ciliberto and son, Luis Oberto & co, Victor Vargas, Juan Carlos Escotet, Alejandro Andrade, Leopoldo Gonzalez Dellan et al, all of whom regular users of the "banking system in the United States"? All of whom U.S. residents or regular visitors?

The Odebrecht case, as its originator the Petrobras corruption scandal, are small play in the greatest Latin American corruption scheme of all: Venezuela and PDVSA. It is no secret that, again, albeit small, the largest amount of bribes paid by Odebrecht took place in Venezuela. The biggest criminal cartel south of the Rio Grande these days is called chavismo, known officially as the Government of Venezuela. Want to deal a significant blow to those who "threaten our national security and the international free market system"? Act on what you have on Venezuela, PDVSA and its U.S. based enablers. Going down that rabbit hole will undoubtedly reveal the most brazen and largest ever corruption scheme this side of Moscow.