Marcelo’s way

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.”

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American Airlines Arena

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.

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Marcelo Odebrecht

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.

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Judge Sergio Moro

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.

Marcelo Odebrecht in happier times, with Dilma Rousseff and Raúl Castro

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.”

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Lula

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.

Brazil: another crisis for Rousseff

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Dilma Rousseff

Last September, as we reported on this site a while back, two top members of Brazilian president Dilma Rousseff’s posse were sentenced to long prison terms. João Vaccari Neto, treasurer of the ruling Workers’ Party, got more than 15 years for corruption and money-laundering; another party hack, Renato Duque, got 20 years for inflating oil contracts and shoveling the excess profits into the party’s coffers. The convictions of these two men were only part of a large-scale disaster – a blend of scandal and economic crisis – that sent Rousseff’s popularity ratings south, making her, in the words of the Financial Times, “Brazil’s most unpopular president in recent democratic history.”

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Joao Santana

Then, on February 23, just as Rousseff’s numbers were starting to recover and she seemed to be emerging from under the cloud of possible impeachment, yet another member of her inner circle was put under arrest. Joao Santana, a journalist and political strategist, was the mastermind behind her two election victories and is one of Rousseff’s more intimate friends and advisers – the James Carville to her Bill Clinton. In addition to engineering her victories, he’s also successfully coordinated campaigns for leftist presidential candidates in the Dominican Republic, Angola, Peru, and – notably – for both Hugo Chávez and Nicolás Maduro in Venezuela.

According to the charges leveled against him, Santana knowingly allowed himself to be paid for his services to the Rousseff campaign with several million dollars in funds illegally diverted from Petrobras, the state oil company that is currently at the center of Brazil’s biggest corruption scandal ever. Santana’s homes and offices were raided by 300-odd officers; his wife was also taken into custody. The arrests reportedly came as a shock to Rousseff’s supporters, who fear that Santana may work out a plea bargain with prosecutors in which he throws Rousseff under the bus.

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Michel Temer

Even if Santana doesn’t turn state’s evidence, to be sure, the goods the cops have on him may be more than enough to sink Rousseff. If it’s proven that she paid Santana with money pilfered from Petrobras, it could mean the official overturning of her election victory. The Portuguese language has a lovely word for this act of invalidation: cassação. As Americas Quarterly staffer Stephen Kurczy recently explained, impeaching Rousseff would involve action by both houses of Congress – which in early December, in fact, initiated impeachment proceedings, only to see them stall shortly therafter. (The proceedings will supposedly resume soon.) Cassação, by contrast, is a process that only requires a ruling by Brazil’s electoral court, the Tribunal Superior Eleitoral – which, as it happens, is already investigating the funding of Rousseff’s 2014 campaign as part of Operação Lava Jato (“Operation Car Wash”), the probe into corruption at Petrobras. If the court determined that Rousseff and her vice president, Michel Temer, had funded their election campaign with illegal funds, both Rousseff and Temer could be removed from office at once, with Rousseff being temporarily replaced by the Speaker of the House, Eduardo Cunha, until a new election could be arranged.

“We’re on the border of changing eras in Brazil,” political consultant Thiago de Aragão told Kurczy. “Until recently, anyone involved in the PT [the Workers’ Party] was immune. Now people are discovering that it’s not like this. The times are changing.” In fact, they’re changing fast. Only days after Santana’s arrest, another Rousseff intimate suddenly resigned his cabinet position. Tune in tomorrow.