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Massive Odebrecht bribery scandal implicates Ecuador and 11 other Latin American countries

Brazilian construction giant Odebrecht SA’s admission to U.S. prosecutors that it paid hundreds of millions of dollars in bribes to win lucrative infrastructure contracts is reverberating across Latin America, where the company has built some of the region’s biggest projects during the last 15 years.

Odebrecht headquarters in Brazil.

Odebrecht told prosecutors that it paid $35.5 million to officials in Ecuador.

In total, Odebrecht paid nearly $800 million in bribes in 12 countries since 2001, providing the company with $3.34 billion in profits, according to an anti-corruption settlement released by the U.S. Department of Justice this week.

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Excluding Brazil, half of that illicit money was used to pay off officials in nine Latin American nations, from market-friendly Mexico to socialist Venezuela.

“This is going to be a political earthquake in many of these countries,” said José Ugaz, a former Peruvian prosecutor and chairman of Transparency International, the Berlin-based watchdog group, who believes the revelations represent the tip of a broader scheme.

The San Francisco hydro electric plant in 2007

Although Ecuador terminated all government contracts with Odebrecht in 2008 following a dispute over work on the San Francisco Hydroelectric Power Plant in Tungurahua Province, several government officials were named by Odebrecht as having received illegal payments. The names of those officials have not yet been released.

President Rafael Correa’s administrative secretary said Thursday that although the administration had limited exposure to Odebrecht, it is unclear whether current officials took bribes before Correa took office in 2007. Alexis Mera said the government will prosecute anyone it found to have been involved in receiving bribes, including those who worked on the San Francisco hydro project.

On Thursday, Colombia’s government reacted by saying it could void infrastructure contracts that are found to have been won through illegal means after the document said Odebrecht paid $11 million in bribes. Panama President Juan Carlos Varela called for prosecutors to investigate all of Odebrecht’s contracts and prosecute as warranted.

In Venezuela, where nearly $100 million in bribes were doled out, the opposition-controlled Congress moved to begin investigating Odebrecht’s contracts, even as President Nicolás Maduros’s government remained silent. And in the Dominican Republic, prosecutors asked U.S. authorities to share information after the settlement said Odebrecht spent $92 million to win contracts.

The scandal created a political crisis in Brazil that led to the impeachment of former President Dilma Rousseff. In the wake of Wednesday’s settlement, leaders of some other countries denied wrongdoing.

10 thoughts on “Massive Odebrecht bribery scandal implicates Ecuador and 11 other Latin American countries

  1. Why is this a surprise to anyone? Probably not enough “grease money” for the Tram project is one reason for delay. Other than bribe money, how do poor people going into politics get to be so wealthy? Always taxpayer money and inside information no matter which government you name.

  2. Absolutely ridiculous that Mera says he will prosecute everyone. Where will he even start? He daren’t start as he’d immediately lose his job. Corruption is rife in Ecuador and every other country, including the USA, just that in Latin countries it’s more blatant.

    1. You have to open your eyes a bit.
      Currently, the easiest place on the planet to open a bank account for nefarious purposes is the USA. That was/is the whole point in the war
      against tax havens. US traders, brokers and laws caused a western world disaster in 2008 and had to replace the trillions they lost and could no longer feed off. So they had the USA government wage a sad war on the foreign competition (that did not lose their customers’ money!). They forced tough laws and witch-hunts upon banks abroad while loosening banking and accountability stateside.
      It is all very obvious and ugly. But you are not going to get American-sourced media to talk about it.

  3. Notice how the mayor of Quito has been silent on this?

    He’s the only one implicated in this, which is why the Justice Department isn’t going to release names until after the general election. They prefer to cast doubt on the Correa administration even though they know they don’t have anything.

  4. I am an American living in Panama and nothing surprises me about this country, I attended the conference Anti Corruption a few months ago where Jose Ugaz lead prosecutor on the case of Lava Jato exposed the reality of Odebrecht and the fact that Panama is the third most corrupted county in this hemisphere but to this people… nothing fazes them… this is a continuous party every day and then some more. All the players have something to hide but nobody cares.

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