Odebrecht is finding new ways to game the system. The Brazilian construction company Odebrecht continues to face criminal charges of up to US $2.6 billion in fines for bribes paid to officials in 12 countries, mostly in Latin America, to secure public works contracts. However, the company now demands that the Argentine government pay a US $202.63 million compensation for contracts that it terminated, a result of its representatives having confessed to bribing Argentine public officials from 2007 to 2014. This is almost six times more than the company offered to pay in corruption damages to the Argentine government.
International charges against Odebrecht stem from a three-year investigation in Brazil into corruption at the state-run oil company Petrobras, which has led to political upheaval and numerous arrests in the country. The investigation additionally implicated Odebrecht’s business deals in Angola, Colombia, the Dominican Republic, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru, Venezuela and Argentina. In Argentina, Odebrecht has admitted to paying US $35 million in bribes between 2007 and 2014 to expand the northern and southern gas pipelines and put the Sarmiento train line underground. Of the three contracts that the government is investigating, only one – the pipeline expansion – has been canceled.
Argentine government officials are now walking on eggshells. They cannot nullify Odebrecht’s other contracts without suffering further claims to compensation. There is little precedent for this situation. Argentina’s criminal code does not address the possibility that company representatives will reach plea deals with authorities regarding corruption acts, and therefore can’t offer one to them in exchange for cooperation.
But the Argentine government is trying to act fast. Next week, Congress will vote accordingly on an amendment to the criminal code. In the meantime, without Odebrecht’s voluntary cooperation, prosecutors are turning to the Brazilian and American Departments of Justice for leads.
So the case continues. In the coming days, the Argentine government will announce the creation of a tripartite commission, headed by the Ministry of Transport and aided by the General Office of the Comptroller (SIGEN) and the Treasury Department, to review each contract. The General Inspectorate of Justice has already summoned Odebrecht to present his 2015 and 2016 balance sheets. Justices have yet to decide whether to further investigate balances from previous years, something that could reveal further bribes.