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The Currency Rounding that Benefited Odebrecht

A solitary block of concrete, barely protected from flood by sump pumps, lies in the waters of the lower Caroní River. This is the case of the planned Manuel Piar hydroelectric plant in Tocoma, southern Venezuela, after paying US$ 10 billion —three times the budget and partly with funds from multilateral agencies— to several contractors, including the controversial Brazilian construction company. Of that amount, at least US$ 1 billion corresponded to irregularly paid foreign currencies through an administrative scheme (80-20, they called it) that an internal audit found, which was used to finance commissions to project management.

6/11/2017 12:00:00 AM

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"The '80 -20' must not be known; otherwise, the Tocoma project falls," warned one engineer to another in the middle of the urgency to progress with the works (once again) of the Manuel Piar hydroelectric plant, in Tocoma, Bolivar state, in the rich Venezuelan Guayana. It was 2014, and the internal auditors of Corpoelec, the Venezuelan state power holding company, had months of reviewing the work's invoices - including many issued by the Brazilian company Odebrecht - to find out the reasons for its delay and the great escalation of its cost.

In Ciudad Guayana, the industrial and commercial capital of the region, the "80-20" was an open secret. Engineers, technicians, administrators, trade unionists and lawyers working there knew that billing in bolivars had been dollarized through this mechanism that contravened the exchange control and the initial contract.