Brazilian state-owned oil giant Petrobras is temporarily blacklisting top construction firms linked to a multimillion-dollar graft scandal pending the outcome of an investigation. Brazilian authorities are investigating how a constructors' cartel shared out lucrative contracts inflated by illicit surcharges that intermediaries used to set up front firms laundering some $3.8 billion in kickbacks benefiting mainly pro-government politicians over a decade.
Petrobras named 23 firms, including Odebrecht, Andrade Gutierrez and Camargo Correa, that would be "temporarily prevented from new contracts and from participating in tenders" put out by the oil firm. In a regulatory filing drawn up on December 28, 2014, the oil firm explained the measure was designed to "protect the company and its partners from difficult to redress financial damages and harm to its image" amid the scandal.
Petrobras said it was setting up supervisory structures to determine what sanctions may be applied against companies found to have engaged in illicit dealings. The oil firm's anti-corruption guidelines provide for "the application of sanctions to suppliers who do not act in compliance with the code of ethics" for doing business with Brazil's highest-profile company. Petrobras needs to strike major deals with construction firms as it aims to double oil production by 2020 to turn Brazil into a net crude exporter while developing "pre-salt" reserves requiring extraction from beneath deep layers of salt off the country's Atlantic coastline.
Petrobras chair Graca Foster recently warned of "the great threat posed to the production curve" if the firm is unable to pursue deals with companies mired in graft allegations and instead has to seek international bidders. The investigation into the affair has so far snared 39 suspects, including a clutch of politicians close to President Dilma Rousseff's ruling Workers Party. A former Petrobras director has turned whistleblower in an attempt to secure a plea bargain. Petrobras is also facing legal action in the United States over investor losses due to the corruption scandal that has seen the firm's stock value take a plunge in recent months. The suit accuses Petrobras of making "materially false and/or misleading statements" to investors in Petrobras stocks and bonds that inflated the value of the company before the corruption scandal broke.
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