Brazil police arrest Grupo Galvão CEO in Petrobras probe

Fri Mar 27, 2015 7:13pm EDT
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By Caroline Stauffer

SAO PAULO (Reuters) - Brazilian police on Friday arrested the CEO of Grupo Galvão, the latest executive seized in a corruption probe focused on state-run oil firm Petroleo Brasileiro SA.

Dario Galvão, chief executive of the construction group, and Guilherme Esteves, a lobbyist who is being investigated for funneling bribe money, were taken to federal police headquarters in the southern city of Curitiba, a court spokeswoman said.

Trials are underway in Curitiba, in what has become Brazil's biggest-ever corruption probe known as Operation Car Wash.

In December, prosecutors accused the CEO of participating in a cartel of construction executives that fixed prices on contracts at Petrobras, as the oil company is known.

Federal Judge Sergio Moro called Galvão the mastermind of the company's criminal activity and said he posed a risk of committing more crimes. Prosecutors have proof of his crimes from 2008 until 2014, Moro wrote in a court decision.

In a statement, Grupo Galvao said Galvao's arrest was "without legal grounding" and he had "not committed any crime." It also said that Galvao Engenharia, its building subsidiary which filed for bankruptcy this week, rejects vehemently any accusations of being part of a corrupt cartel.

Moro also cited evidence that Esteves used secret accounts abroad to funnel large bribes to employees at Petrobras and rig producer SeteBrasil.

Two dozen of Brazil's biggest engineering firms are being investigated for overcharging on Petrobras contracts and using the excess to bribe executives, politicians and political parties.   Continued...

A woman waves a flag with Petrobras' logo as she takes part in a demonstration in defense of Brazil's President Dilma Rousseff and the state-run oil company Petrobras, in Rio de Janeiro March 13, 2015.   REUTERS/Ricardo Moraes