Brazil graft crackdown spurs work for lawyers, corporate change

Thu Mar 24, 2016 11:46am EDT
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By Caroline Stauffer

SAO PAULO (Reuters) - In the midst of Brazil's worst recession in decades, lawyer Thiago Jabor Pinheiro switched firms to focus full-time on one of the only booming fields in the scandal-plagued country: compliance and corporate ethics.

For Pinheiro, a massive corruption investigation unfolding at state-run oil firm Petrobras offers a golden opportunity. The scandal broke just as a tough new anti-corruption law went into effect in Brazil, raising the risk of prosecution for scores of companies.

The sweeping Petrobras investigation and the 2013 law, known as the Clean Companies Act, have sparked a frenzy of legal activity similar to what happened in the United States over a decade ago when the Foreign Corrupt Practices Act (FCPA) was implemented.

Brazilian magistrates have jailed some of Brazil's best-known executives, including Marcelo Odebrecht, the scion of a billionaire family controlling Latin America's largest engineering firm, and are increasingly turning their attention to companies themselves.

New raids are occurring on a near weekly basis, including recently one probing alleged tax fraud at steelmaker Gerdau SA.

"We believe the number of judicial and administrative cases is going to increase," Pinheiro, 33, said at the spacious Sao Paulo offices of Brazilian law firm Mattos Filho, where he started in December.

"We want to be part of this movement."

Mattos Filho has expanded its compliance department – tasked with ensuring corporate clients strictly follow Brazilian legislation - from three lawyers to 17 people in three years.   Continued...

Lawyers Renato Portella (L) and Thiago Pinheiro pose for Reuters in their office in Sao Paulo, Brazil, March 7, 2016. To match Insight BRAZIL-CORRUPTION/COMPLIANCE     Picture taken March 7, 2016.  REUTERS/Paulo Whitaker