Brazil/Petrobras: $2.95 B Settlement, Operation Car Wash

In January of 2017, a plane crashed.

SAO PAULO (Reuters) – Brazilian Supreme Court Justice Teori Zavascki, who was overseeing a graft investigation into scores of powerful politicians, was killed in a plane crash on Thursday, raising questions about who will take over the country’s biggest ever corruption case.

Rescuers found three bodies in the wreckage of the small, twin-prop plane that crashed off the coast of Rio de Janeiro state amid heavy rains, firefighters said. Federal prosecutors and police said they would immediately open an investigation in addition to that of aviation authorities.

Zavascki, 68, had in recent weeks been reviewing explosive testimony from executives at engineering group Odebrecht, expected to implicate an array of politicians in a vast kickback scandal centering on state-run oil company Petrobras and other enterprises. More here.

*** Image result for operation car wash photo

Under the proposed settlement, Petrobras has agreed to pay US$ 2.95 billion to resolve claims in two installments of US$983 million and a last installment of US$984 million. The first installment will be paid within 10 days of preliminary approval of the settlement by the court. The second installment will be paid within 10 days of final approval of the settlement. The third installment will be paid by the later of (i) six months after final approval, or (ii) January 15, 2019. The total settlement amount will be recognized in the fourth quarter of 2017.

The agreement does not constitute any admission of wrongdoing or misconduct by Petrobras. In the agreement, Petrobras expressly denies liability. This reflects its status as a victim of the acts uncovered by Operation Car Wash, as recognized by Brazilian authorities including the Brazilian Supreme Court. As a victim of the scheme, Petrobras has already recovered R$1.475 billion in restitution in Brazil and will continue to pursue all available legal remedies from culpable companies and individuals.

*** Criminal complaint

Since the scheme was detected three years ago, prosecutors have yet to reach bottom in their investigation—and the total sum of payoffs may exceed $5 billion. The criminality may also cost Petrobras, South America’s largest corporation, $13 billion in contract losses and legal settlements, and it’s already resulted in the layoff of thousands of Petrobras workers. Meanwhile, Odebrecht, the Brazilian construction giant that led the bribery bacchanal, is a disgraced and crumbling conglomerate. Its boss, Marcelo Odebrecht, was sentenced last year to 19 years in prison. More here.

*** In 2014: Although President Dilma Rousseff has not been implicated in any wrongdoing related to “Operation Car Wash,” she did serve as the Chairwoman of Petrobras from 2003 to 2010, and having her name connected with a company mired in scandal likely won’t bode well for her reelection campaign. According to a recent poll, she is trailing opponent Marina Silva in Brazil’s October elections.

Rousseff has already been criticized for her role in the 2012 purchase of an extremely overpriced Texas oil refinery, a deal that began when Rousseff was still chairwoman. Brazilian investigators are looking into whether or not the purchase of the refinery could be linked to “Operation Car Wash,” although such a link would not necessarily mean Rousseff had any knowledge of the money laundering scheme. More here.

Posted in Citizens Duty, DOJ, DC and inside the Beltway, Energy Agenda, Gangs and Crimes, government fraud spending collusion, The Denise Simon Experience.

Denise Simon

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