The Odebrecht Group is one of those conglomerates whose international reach and level of diversification make one’s head spin. It’s the largest construction outfit in Latin America; Braskem, one of its innumerable subsidiaries, is Latin America’s biggest petrochemical producer.
“They are more than a company,” a Brasilia-based consultant, Thiago de Aragão, told the Wall Street Journal recently; “they are a symbol of modern Brazil.”
Indeed. It’s Odebrecht that is responsible for Miami’s $213-million American Airlines Arena, where the Miami Heat play. It’s Odebrecht that is Angola’s top private employer, with over 24,000 employees in that country alone. At this moment, among many other projects, Odebrecht is building a highway in Ghana that will connect the capital, Accra, to remote eastern regions of the country; it’s expanding and adding bridges to a highway that links Guatemala’s main ports with the Mexican border; it’s upgrading a major airport in Mozambique; it’s constructing an elaborate hydroelectric facility in Portugal; it’s installing “the world’s deepest and most complex sewage pump station” in Abu Dhabi. In 2014 the group celebrated its seventh decade in business.
On March 8, the firm marked another milestone. That was the day on which its CEO, Marcelo Odebrecht, the grandson of the company’s founder, was sentenced to 19 years in prison after being convicted of paying $30 million in exchange for contracts and influence at Petrobras, the state-owned Brazilian oil firm that is at the center of the massive corruption probe known as Operation Car Wash. According to prosecutors, Marcelo’s firms “used Swiss bank accounts to launder nearly $270 million in bribes” between 2006 and 2014.
The presiding judge, Sergio Moro, said Marcelo Odebrecht was “directly involved” with this systematic bribery and money-laundering and “guided the work of others.” This intimate involvement was demonstrated by (among other things) incriminating messages stored on eight cellphones found at Marcelo’s home. While other construction executives nabbed in the probe have bought themselves shorter sentences by turning state’s evidence, Odebrecht refused to spill the beans, saying that he would punish his own kids more harshly for tattling than for cheating.
Given the conglomerate’s dimensions and its importance to the Brazilian economy, the arrest and conviction of Marcelo – who took over the reins of the family firm in 2008, at age 40, and whose nickname is “Prince of the Contractors” – is of obvious significance. According to the Journal, Marcelo’s arrest in June of last year caused an economic earthquake, contributing to the onset of Brazil’s current recession. But what makes these developments even more momentousness is Marcelo’s intimate relationship with the Rousseff administration. When the president met with business leaders, Marcelo was invariably present. “Some of the other executives,” one São Paulo businessmen told the Journal, “were jealous that he always got invited and they had to fight for a seat at the table.”
Marcelo is close not only to Dilma Rousseff but to her predecessor and mentor, former President Luiz Inacio Lula da Silva, who is himself being investigated for allegedly accepting illegal funds from Odebrecht.
One thing about having global reach is that when you get in trouble, the investigations, too, will have a global reach. Swiss and Portuguese authorities are now looking into charges of wrongdoing by Marcelo, and several other countries are considering similar probes.
