Exclusive: Leniency deal for Brazil's Odebrecht may be world's largest

Tue Nov 8, 2016 12:02pm EST
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By Brad Brooks

SAO PAULO (Reuters) - U.S. and Swiss investigators are working with Brazilian counterparts to complete negotiations with Odebrecht, the construction company at the center of a massive political kickback scandal, in what is likely to be the world's largest leniency deal, people involved in the talks said.

Upwards of 80 Odebrecht employees are negotiating plea bargains and a leniency deal for the company. In return, they must testify about the conglomerate's central role in a scheme involving contracts with state-run oil company Petrobras (PETR4.SA: Quote).

Two sources said this was likely to be the world's largest leniency deal, exceeding a 2008 agreement in which German engineering company Siemens paid $1.6 billion to U.S. and European authorities for paying bribes to win government contracts.

The testimony is expected to implicate more than 100 current and former Brazilian politicians, some already ensnared in the probe, sources said.

It will probably hit top officials in the government of President Michel Temer, who took power in May following the impeachment of President Dilma Rousseff. Rousseff said her ouster was a "coup" by Temer and his allies to halt the corruption investigation.

Temer has consistently denied any wrongdoing or connection to the Petrobras "Car Wash" scandal, although several members of his Brazilian Democratic Movement Party, including some of his former ministers and the head of the Senate, are under investigation in the case.

The two sources involved in the talks told Reuters the deal would also expose wrongdoing in many of the 27 countries where Odebrecht [ODBES.UL] has conducted business. It could "give birth to 100 new investigations," one source said.

U.S. officials are involved because some of the money Odebrecht used as bribes flowed through the nation's banks, said both sources involved in the talks. The company also conducted projects on American soil.   Continued...

A sign of the Odebrecht SA construction conglomerate is pictured in Lima, Peru, June 28, 2016. REUTERS/Janine Costa