Odebrecht was not the only one. Four companies were awarded a dozen works to build large infrastructures in Argentina, nearly always using the gimmick of an attractive quote and the accompanying financing by a Brazilian state development bank. However, they subcontracted other providers afterward and, with the projects already in progress, the costs increased and the Argentine State ended up providing the funds, over US$ 9,000 million, of which an average of 300 million per work corresponded to surcharges. In addition, today many of the projects remain unfinished. The pattern would be used by Brazilian construction companies in other Latin American markets.
The loan granted by BNDES expired in September 2015. Therefore, Capitanich traveled to Rio de Janeiro and agreed an extension to the contract. However, in January 2017 the Brazilian bank said that it would not resume the financing. A month later, the recently elected governor of Chaco, Domingo Peppo, signed an agreement with the central government for US$ 2.5 billion to replace the international credit with BNDES and complete the remaining 33% of the aqueduct. In this new stage, OAS was replaced in the consortium by company CPC.
If all the resources spent and budgeted are added up, the final value of the aqueduct is estimated at at least US$ 380.3 million, a US$ 48.6 million difference from the initial amount. "OAS is the northern Odebrecht," Gutiérrez said and added, "In this project, more than four times than expected was spent in pesos and all deadlines are past due. But, above anything else, the aqueduct was not finished."
Four months later, the governor and former chief of staff of Fernández de Kirchner, Jorge Capitanich, opened the envelopes and the four bidders were Techint S.A. and three consortia, including the one that was made up of OAS Limited, Supercemento S.A. and Rovella Carranza S.A.
In February 2011, the government of Chaco awarded the work to the business alliance made up of the Brazilian OAS, although its bid had been higher than the others, provincial Deputy Livio Gutiérrez said in a complaint filed with the Attorney General's Office of Administrative Investigations, to which Chequeado and Armando Info had access.
The work - explained the provincial government - would be executed with national resources, funds from Chaco province (through the Federal Solidarity Fund) and international financing from BNDES, obtained by OAS. In July 2011, Capitanich met with representatives of the company "to establish details on the execution". The works began in August of that year, with a construction timeframe of 36 months. The Lava Jato explosion changed everything. "In March 2015, when the case was known, the pipeline company OAS stopped the deliveries and BNDES suspended the disbursements on the indebtedness taken by the province for about US$ 160 million (...) and paid US$ 116 million only," said Deputy Gutiérrez. He added that despite the redeterminations made and that the date of completion was 2014, the aqueduct was not finished. An institutional video of the provincial company of Chaco in charge of the water service (SAMEEP), published in October of that year, asserted that 67% of the work was completed.
Few Brazilian business groups had a rise as dramatic and controversial as the one experienced by OAS, a group that today consists of 12 companies. Created more than three decades after Odebrecht's appearance, the Bahian conglomerate ranked second in 2015 in the ranking of Latin American construction companies with the highest annual sales volume. In Argentina, one of its first incursions occurred in 2009, but the particularity happened in 2015.
While in Brazil, Operation Lava Jato added up allegations of corruption against OAS executives, in Argentina, Cristina Fernández de Kirchner – who was in the last year of her second term – decided to grant the company a loan of 964 million dollars for the hydroelectric project Los Blancos, in Mendoza. This work had been pre-awarded in 2012 to the business alliance made up of Cartellone Construcciones Civiles (owned by family Cartellone, Mendoza locals) and the Argentine branch of OAS, for an amount of 1,426 million U.S. dollars, including VAT.
OAS had committed to obtain more than half the cost of the BNDES-financed project as part of its bid, but the loan never materialized. Hence, Fernández de Kirchner announced in June 2015 that the national Government would cover up to 65% of the total. This modified the criterion indicated in the resolution whereby the work was pre-awarded and in the document containing the statement of purpose, where it was agreed that the necessary investment would be obtained mainly by the company.
"The bid was adjusted throughout time by Decree 1295/02, which verifies the possibility of adjusting the price of a work by re-determining prices in public work contracts. Therefore, the change of management allowed potential forecasts of amounts required to proceed with the work," Rolando Baldasso —former Minister of Infrastructure during the management of Francisco Pérez, recalled when speaking to Chequeado and Armando Info about a final amount that is unknown today.
Emilio Guiñazú, Assistant Secretary of Energy and Mining of Mendoza, of the current administration of Alfredo Cornejo, said that "the provision of part of the financing by BNDES was under the conditions of the tender." "When OAS faced financial problems," explained the official, "the financing of the bank did not materialize, hence, the final award was not made. Consequently, the work has not yet begun."
Regarding the current status of the work, Guiñazú affirmed, "Today the process is in stand by awaiting a definition regarding the improvement of financing of the awarded consortium".
As it was said, one of the first incursions of OAS was in 2009. That year, the government of the Chaco province called for a tender to build the "Second Aqueduct for the Interior" which, according to the announcement, would benefit 26 towns and 50% of the provincial population. The official budget of the work was US$ 300 million, with taxes included, according to official information from the Ministry of Infrastructure of the province.
On September 13, 2017, Odebrecht offices in Argentina were raided in the case investigating alleged bribery of the Brazilian company to be awarded tunneling works of the entire Sarmiento railway. The order by federal judge Marcelo Martínez de Giorgi was, until now, the last chapter of the saga that began over a decade ago, during the Presidency of Néstor Kirchner, with a call for tenders by the Transportation Secretariat led by Ricardo James.
The consortium made up of Odebrecht, IECSA S.A., COMSA S.A. and Ghella S.A. was one of the two that bided (the other was a company made up of Isolux-Esuco) and the one that was awarded the work for 889 million U.S. dollars. First, a decree, then, several addenda elevated the costs of the first section, which by early 2011 was already around US$ 1.483 billion.
This would not be the last figure. In November 2013, the Odebrecht-led consortium reported that the board of BNDES had approved a loan of US$ 1,508 million for 50% of the approximate contractual amount. So at that time, the cost of the work had already amounted to US$ 3,016 million. The figure could further increase if it is considered that President Macri decided by Decree 797/2016 to project disbursements for a total of 45 billion Argentine pesos over the next three years to finish the work.
On June 28, 2017, Odebrecht submitted to the Ministry of Transport a "change in the shareholding" that allowed it to leave the project. The proposal consisted of selling its share in the consortium to the Italian Ghella, which already has a share in the work. The proposal was accepted and Odebrecht's departure from the Sarmiento train project is a fact, confirmed Chequeado and Armando Info from the Ministry led by Guillermo Dietrich.
That same day, the Ministry of Transport created a commission to review the irregularities in the case, by far the work with greater surcharge among those making up this investigation. To date, the backhoe has excavated 1,579 m (5180.44 ft) of tunnel, barely 17% of the first stage.
In July 2016, the six sections were awarded for 147 million U.S. dollars, which six months later was updated to 179 million U.S. dollars. Sources from the Córdoba government confirmed to Chequeado and Armando Info that all the work began this 2017, with advances ranging from 14.9% (Punilla II) to 87.3% (Regional System Route 2).
Why the province did choose Odebrecht even though it was already being investigated for corruption in the Lava Jato? Because "it works well, fast and at low prices," Schiaretti argued last May during a meeting with journalists. In August they asked him again, How could it be that Odebrecht has bribed everywhere but in Cordoba? "Because we do not let it. It's very simple," he said.
Some members of the Cordovan cabinet do not help dispel suspicions. Fabián López, the provincial Minister of Water, Environment and Utilities will be investigated in December for his role as the second-most of the Public Works Secretariat during Kirchnerism in the case of the twin tenders and surcharges for the works of AySA. His boss was José López, the man who was filmed in the early morning hours of June 14, 2016, while throwing bags of money in a monastery, and is now detained and tried for the crime of illicit enrichment.
In this plot, not
only the previous Government of Argentina is involved. Between 2008 and 2009,
the Government of Córdoba called for an international tender for the construction of the province's main gas
pipelines, stating that the bidders should provide financing of at least 75% of
the price of the work. The winner was a business alliance made up of Brazil’s
Andrade Gutierrez S.A. and Argentina's IECSA S.A. and Britos S.A., which offered
to do the work for 220 million U.S. dollars and proposed BNDES
The contracts were signed in 2009, during the first term of governor Juan Schiaretti, and soon began the proceedings before the Ministry of Economy to make the loan from the Brazilian bank “operational.” The work was paralyzed for several years until in March 2015, during Juan Manuel de la Sota’s period, the province cancelled the contracts since the bidding companies did not have financing. However, the local government ended up paying them US $ 35.3 million for "preliminary tasks" of the work that was never finished.
Meanwhile, the president of Andrade Gutierrez Otávio Azevedo was convicted by the Brazilian Justice and reached an agreement to reduce his sentence in exchange for providing information, known in Brazil as "plea and cooperation agreement."
Between 2015 and 2016, with Schiaretti in charge of the provincial government again, the province reopened the tender, now with 500 more kilometers (310.68 mi) of construction. Odebrecht was awarded six of the ten sections of the main gas pipelines, even though the Brazilian company was already under investigation after having confessed the payment of bribes.
But there is more. While the business alliance led by Odebrecht was awarded the construction of that plant, another consortium made up of the Brazilian company Camargo Correa and the Argentine company Esuco S.A. won a contract for the construction of a sewage treatment plant in Berazategui, also located in the Province of Buenos Aires, parallel to Río de la Plata and the Buenos Aires-La Plata Expressway. As published by La Nación newspaper, the owner of the construction company Esuco, Carlos Wagner, was responsible for organizing the distribution of these works, the liaison between Federal Planning officials and Odebrecht executives for the payment of bribes.
As if it were a game of mirrors, the costs of this work also suffered dramatic increases. The initial amount of the plant was estimated at 104.5 million U.S. dollars, but the increases began soon. Two companies submitted bids for the Berazategui plant: Electroingeniería (a group led by entrepreneurs Gerardo Ferreyra and Osvaldo Costa, closed to the former government of Cristina Fernández, which also ventured into the media market) and the consortium made up of Camargo Correa and Esuco. AySA accepted Esuco’s proposal, including a "bid improvement" that was actually a financing proposal through BNDES. The award contract was signed for US$ 145.9 million, including VAT.
repeating the Paraná de Las Palmas scheme, at least two addenda with "price
redeterminations" were signed (one in 2010 and the other in 2011), which elevated its cost to
US$ 167.3 million. "It is surprising that items with a high unit cost have soaring increases," said the auditors of the Argentine Center of Engineers, who added, "It is noteworthy that the quantities of some items that were calculated for the tender double, triple, and more.”
The case of the twin tenders ended before the courts of justice and, on September 1, 2017, federal judge Sebastián Casanello ordered the depositions of former AySA president Carlos Ben and his right hand Raul Biancuzzo. Representatives of Odebrecht, Camargo Correa, Benito Roggio, Esuco, Supercemento, and José Cartellone Construcciones were also called, among others. Casanello considered that the tenders resulting in both awards were assigned beforehand so that the consortium led by Odebrecht won the work of Paraná de ??Las Palmas and the other led by Camargo Correa obtained the work of the sewage treatment plant in Berazategui.
According to the report that federal prosecutor Sergio Rodríguez submitted to the judge of the case, Odebrecht knew the place, date and technical details of the financing for the construction of the plant in Paraná de Las Palmas, almost half a year before AySA made public the call for tenders. Exchanges between BNDES and the consortium led by Camargo Correa reveal that this company also learned about the construction of the Berazategui plant well in advance. "This shows preexisting agreements and reveals the set-up of the public tender as simply staging," judge Casanello said when signing the call for deposition.
At the end of September, La Nación newspaper revealed that Odebrecht is about to sell its share in the work to Roggio, Cartellone and Supercemento, its local partners. However, it is necessary to agree upon a solution for a proposal by the Brazilian company, claiming a millionaire compensation for alleged failures by AySA associated to payment in due time and form for the works performed.
Before moving forward with the award, AySA asked the consortium made up of Odebrecht to improve its bid. The company responded that this was impossible, but offered in return an increase in BNDES financing. Then, as this report from the National General Auditing Office explains, AySA adjusted the budget to US$ 869.8 million without any modification whatsoever in the terms and conditions. Finally, the work was awarded to the consortium made up of Odebrecht for US $ 880.4 million, an amount even higher than the adjusted budget.
As reported to Chequeado and Armando Info by the Office for Administrative Investigations (PIA) —a body specialized in the investigation of corruption, attached to the Attorney General’s Office, which is the responsibility of prosecutor Sergio Rodríguez— just three weeks had passed from the invitation to tender for the mega work in Paraná de las Palmas to the deadline to submit bids.
Shortly after, the work began and, in theory, it should have been completed by January 2012. However, the AGN reported, "the absence of appropriate planning" led to delays in the execution of the work. "A small backlog in the works is always justifiable," said the auditors, but in this case, "in the opinion of the auditors, the delays, at the discretion of this audit, far exceeded the justifiable". Hence, these delays affected the final value of the work.
How were these increases expressed? By addenda and letters of understanding. For example, addendum No. 9 of November 2013 added the construction of an aqueduct for US$ 140.2 million, while addendum No. 11 added paving works for US$ 22.7 million to the "combo". By then, the work had already exceeded the US$ 1 billion barrier and its costs totaled US$ 1,043.9 million. The figure may be higher, since there are missing addenda detected by the audit of the Argentine Center of Engineers (CAI), the amounts of which are unknown.
With a water treatment plant, 40 km (24.85 mi) of aqueducts, the water intake in the Paraná de las Palmas river, and a nearly 15-km (9.32-mi) long tunnel, the Northern Water Purification System, located in the Municipality of Tigre, in the Province of Buenos Aires, is one of the most ambitious infrastructure projects of the last decades. Also, one that creates more suspicions.
In March 2008, the state-owned company AySA called for a tender for the construction and start-up of the plant and its attached works, for which it estimated a budget of 595.4 million U.S. dollars, including VAT. There were two bids. The first, from a consortium made up of Construcciones y Comercio Camargo Correa S.A. and Esuco S.A.; the second, from a consortium made up of Odebrecht, Benito Roggio and Hijos S.A., Supercemento S.A., and José Cartellone Construcciones Civiles S.A.
However, based on the same document and the complaint by prosecutor Stornelli, the initial amount established in the tenders for the work named "2006-2008 TGN and TGS gas pipeline expansion" had been lower (US$ 1,677 million, including VAT), i.e. a difference of US$ 588.4 million over the final value.
"There is not a due technical and economic justification that supports the fairness or probability of such variation or budget deviation," the prosecutor said in his preliminary investigation.
Chequeado and Armando Info contacted all Argentine companies involved in this contract. Contreras Hermanos, a company that was subcontracted by Odebrecht for the extension work and the expansion of gas pipelines, argued before these media that the "initial price and final price are the same, except for the adjustments for inflation." However, and to avoid the effect of inflation on prices, Chequeado calculated the increase of the works previously indicated in U.S. dollars, not in Argentine pesos.
Although the name of the work refers to year 2008 as the completion date, more than a decade from the signing of the contract, the expansion of the four gas pipelines has not yet been completed. In addition, in 2012, the National General Auditing Office found that the documentation provided by NAFISA (the trust of Banco Nación that acted as administrator of the resources for the work) "was not useful to validate the physical progress of the work reported by Enargas or verify the delays generated on the licensing of works.”
At the end of 2016, almost a year after Mauricio Macri became President of Argentina, the Ministry of Energy and Mining asked the Federal Justice to investigate the National General Auditing Office’s
report and ordered the trust of the state-owned Banco Nación, through Cammesa, "to immediately take all necessary measures to rescind the contract" entered into with Odebrecht. The Anti-Corruption Bureau (OA), led by former deputy [of the Congress] Laura Alonso, also requested to be a complainant in the case to investigate the irregularities detected.
When Chequeado and Armando Info asked Odebrecht about it, it merely said that the company "is a service provider" and " the information you need should be provided by our clients," i.e. the subcontracted companies.
Almost a decade after its completion, US$ 117.5 million is the latest official amount known from the Southern Gas Pipeline.Despite the passing of time, these amounts were under the scrutiny of prosecutor Stornelli, who after a preliminary investigation made a criminal complaint that was in the hands of federal judge Daniel Rafecas and prosecutor Federico Delgado.
That was not the last of Odebrecht's work on the Argentine gas system. While undertaking the extension works, the company participated and was in charge of the expansion of the North and Central West gas pipelines (run by TGN) and South and Neuba II (by TGS). That is the work for which US$ 25 million were paid in bribes, as disclosed by La Nación. In practice, it was the installment of loops or parallel pipes to carry gas from the north and south of the country to the city and the province of Buenos Aires.
In 2005, at the request of De Vido, TGN and TGS called for open tenders to choose the builders. There were problems since the initial calculation. Based on the Opinion of the Group of Experts of the Argentine Supreme Court of Justice, in the case of alleged surcharges processed in Rafecas court, TGS stated that "the costs corresponding to the assembly of pipes were determined according to the values offered by the contractor of the 2005 Gas Pipeline of San Martín expansion, which were higher than the values agreed upon with that provider." In short, the values had been already inflated by contractor Odebrecht and would be reinflated.
The winning companies were Albanesi S.A. (private) and Cammesa S.A. (of the National Government and four associations of the private sector), in the north and south, respectively. The companies, however, repeated the scheme of the large Brazilian companies. They leave another company in charge of the tasks and called for open tenders again.
Odebrecht won both tenders by applying the same modus operandi as for the extension work, i.e. it obtained financial support from BNDES and subcontracted a group of local construction companies: Techint, Contreras Hermanos S.A., Esuco S.A. (of Carlos Wagner, director of the Argentine Chamber of Construction from 2004 to 2012) and, with a small participation, BTU S.A. (of entrepreneur Carlos Mundín).
The final contractual amount, based on the expert analysis of the court, was US$ 2.266 million with VAT included.
gathered allows to prove that, in the context of the private competitions
carried out by the companies (...) Transportadora de Gas del Norte (TGN) and
Transportadora de Gas del Sur (TGS), a scheme was implemented whereby the
intervening public officials affected the funds of the trust created for the
execution of the works there promised, thus unlawfully benefiting the companies
Skanska S.A., Techint S.A., Contreras Hermanos S.A., BTU S.A., and Odebrecht
The conclusion of the then federal judge Norberto Oyarbide would be lost among the thousand sheets of his 2010 ruling if it were not because seven years later, as La Nación newspaper revealed, former Odebrecht executive Márcio Faria da Silva confessed before the Brazilian court that the company paid US$ 25 million in bribes to obtain the expansion of that work.
It was the first time that the courts of Argentina had targeted the leading construction company in Latin America, based on the annual sales ranking prepared by the specialized consulting company Structuralia.
But there is more about this case.
Federal Prosecutor Carlos Stornelli was investigating the "Skanska case" on the Northern Gas Pipeline and ran into a millionaire award without a public tender and with unexplained cost overruns: the Southern Gas Pipeline, an enormous project to bring gas to the south of the country. The works (mainly extension of pipelines and construction of compressor houses) were under the sphere of the then Argentina’s Minister of Energy Daniel Cameron and the administrator of Argentina’s National Gas Regulator (Enargas) Fulvio Madaro, both trustful officials of the Minister of Federal Planning Julio De Vido during the governments of Néstor Kirchner and his wife Cristina Fernández de Kirchner.
The joint venture TGS had initially estimated the amount of the road system extension at 76.3 million U.S. dollars with VAT included, but all the offers were higher. In December 2004, Jorge García, TGS’ proxy, informed Minister Cameron that the tender would be cancelled. It was reopened weeks later, but the quotations of the bidding companies (Odebrecht and consortium Camargo Correa-IECSA) continued above expectations. Even so, TGS contacted Odebrecht to request an improvement in its prices. Note: According to the abovementioned ruling, the request was not made to its competitor.
Finally, in 2005, during the government of Néstor Kirchner, the Brazilian company signed a contract for US$ 117.5 million with VAT included, US$ 41.1 million more than the initial budget. García said that he had "made every assessment, proceeding and negotiation within his reach to significantly improve the bid" and he considered "having achieved the best possible price."
Odebrecht undertook to process a loan from BNDES, which it finally obtained in February 2005. Part of the financing would also come from a trust fund of Banco Nación, one of Argentina's leading financial institutions. But the work was finally awarded to Techint (of entrepreneur Paolo Rocca); Swedish Skanska; and Contreras Hermanos(of entrepreneur Juan Touceda), companies that were outsourced by Odebrecht.
The Brazilian company argued at that time that the millions of surcharged dollars were the result of construction complications, income tax withholdings and taxes to obtain financing from the Brazilian bank. However, a report from the Argentine General Accounting Office maintains that the minute of the opening of the closed tender did not include the details of the bids submitted nor a technical report "that justifies the election of (...) Odebrecht S.A."
In addition, the document stated: "Although the regulator [Enargas] recommended approving the contracting for the term of the gas pipeline construction, the fairness of the increase of the work cost is not endorsed by a detailed report." As a result, Enargas "allowed the assumption of an abusive obligation (...) that allowed the contracted companies to obtain excessive profit."
to company TGS, the extension of the gas pipelines was completed in 2008, and a
published by the Centro de Estudios de la Actividad Regulatoria
Energética (Center of Studies of Energy Regulatory Activities) of
Universidad de Buenos Aires indicates that the work allowed increasing the
transport capacity of the network operated by TGS to 2.9 million m3
(102,412,533.5 ft3) of gas per day.
“For example, in the works of Odebrecht, there is a system for obtaining contracts," explained Delgado. The attraction: to include BNDES as financier of the work, since offering credit support gives competitive advantage over other bidding companies. The construction of the Sarmiento underground railway from the City of Buenos Aires to the province of Moreno (Buenos Aires) "is the paradigmatic case" for the prosecutor. "Come and go, come and go, and in the end, the work is financed by the national government," Delgado added.
It is difficult to fight these practices with existing legislation. Volosin recalled that Argentina has one of the oldest procurement and contracting systems in Latin America and the Caribbean. The Public Works Acts, for example, dates back to 1947. "The possibilities offered by the purchase system to inflate costs are vast. Hence, a company that at one point appeared as the best bidder can stop being the best without the imposition of any penalty whatsoever," said the corruption specialist. She added that neither are there clear consequences for those companies that are delayed or do not fulfill the works.
"This is something that goes through the last decade of Argentine politics: a great public work, for a large amount, with a long term, which after signing of contract gives rise to the famous addenda or extensions thereto. In short, what was worth 10 ends up being worth 30 and the final picture is never the original picture," federal prosecutor Federico Delgado affirmed to Chequeado and Armando Info.
From 2005 to 2017, these companies won 11 works in Argentina, seven of which offered financing from BNDES. If considered as a whole, there was an average surcharge of US$ 313 million. And based on the documents analyzed and the calculation made for this investigation, the differences between initial and final amounts ranged from 22% to 239%. Many of the works have not been finished.
For this investigation, Chequeado y Armando Info analyzed the works managed by the construction companies Andrade Gutierrez S.A., Camargo Correa S.A., Norberto Odebrecht S.A., OAS Limitada, and Queiroz Galvao S.A., including the subsidiary firms and consortia that they formed with other companies (see table on the methodology used). All these Brazilian companies have directors involved in the Lava Jato Operation.
While not all these
works are investigated by judges and prosecutors, many share a common pattern.
First, a Brazilian construction company associates with one or more Argentine
companies and presents itself to the tender offering the lowest price and BNDES
financing. Then, the work undergoes "redetermination of prices" and addenda are
signed, which progressively increase its value. In some cases, while the work is
delayed, BNDES withdraws and the Argentine Government is forced to seek
alternative sources of financing. In any event, the work is almost never
completed on time and is more expensive than originally
"What you see is a modus operandi, which is not unique to Brazil's works, but also to how the public work contracting operates in Argentina," explained Natalia Volosin, a lawyer specialized in corruption, with a master's degree of Law from Yale University in the United States of America. She added, "The system is not designed for efficiency or transparency of processes. What officials usually do is to take advantage of the holes in each stage, from the establishment of the need for the work to the execution of the works."
Odebrecht was the great beneficiary among the Brazilian companies. It obtained contracts that generated at least 7.075 billion U.S. dollars, 74% of the total. It was followed by the construction company OAS Limited, with over 1,806 million U.S. dollars, and then by Queiroz Galvao S.A.
(US$ 557 million) and Camargo Correa S.A. (US$ 167 million). In all, these companies won 11 works, seven of which offered financing from BNDES. The average surcharge of the works analyzed was US$ 313 million (see table "Other Millionaire Works").
They arrived, they promised, they won. They almost always charged. They did not always deliver. During the last 12 years, the Brazilian companies involved in the Lava Jato Operation —the huge corruption investigation carried out in Brazil, which pursues the payment of kickbacks and bribes to win tenders in public works in different countries around the world, including Argentina—, obtained works in the country for at least 9,600 million U.S. dollars, the equivalent of more than 17,000 kilometers (10,563.31 miles) of resurfaced route, i.e. 43% of the total road system of Argentina.
Boosted in many cases by the financing from the National Bank for Economic and Social Development (BNDES), the Brazilian construction companies won some of the most important local public works contracts of our time amid suspicion of cartelization, surcharges and bribery.
Beyond the names of political figures and Government officials involved, the corruption plot deployed by the Brazilian construction company in Venezuela brought huge amounts of money in irregular payments into circulation. In Swiss banks, the transit of at least 235 million dollars was detected, mostly bribes linked to the Tocoma hydroelectric project, which after feeding the accounts of intermediaries reached their destination. For now, investigations determine that the capillarity through which the funds flowed led to art merchants, patriarchs of civil engineering dynasties, and even sports managers.
Euzenando Azevedo had the doors of the Miraflores Palace open with Chávez and at the same time, he had a direct line with CEO Marcelo Odebrecht. Then, he became a key witness in the parade of plea bargains of the Lava Jato case. However, despite the many privileges, his testimony fell short. He failed to inform about some bank accounts in Switzerland that reveal that he kept money with one of the commissioners he had reported, Venezuelan lawyer Héctor Dáger.
Kept under lock and key in Brazil since late 2016, the videos of the Odebrecht trial on Venezuela finally appear. As of today, Armando.info begins to publish a string of clips that show the faces of the witnesses who documented the case. Some of their statements had already been published on this platform, but here they go with the voice and tone of their protagonists.
The judicial authorities of Switzerland found a connection between the wife and the mother-in-law of the former Venezuelan minister with at least 40 million dollars deposited in eight bank accounts, one of which was shared with one of the main negotiators of bribes and kickbacks between Odebrecht and the governments of Chávez and Maduro. Although they asked the Venezuelan justice to investigate the matter, the courts denied any possibility of addressing the case and the Venezuelan Prosecutor's Office, led by Tarek William Saab, acts as if not aware.
Neither the revolutionary commander of Venezuela, nor the charismatic president Lula of Brazil, but the senior staff of the construction company turned into the Major Elector when the Brazilian Senate had to vote on the incorporation of Caracas into the trading bloc. Based on the transcripts of the Lava Jato case, Marcelo Odebrecht personally led the lobbying campaign aimed to break the three-year blockage that prevented the entry of the Chavista regime into the club. The operation included the recruitment of three key Senators from the Workers' Party, as allies.
More than 550 million U.S. dollars went through the cliff in some Pdvsa Agrícola (PDVSA Agriculture) facilities, which were partly built in four provinces of Venezuela. A new file of judicial documents and bank deposits of the Lava Jato operation -leaked for this report- involve Egly Ramírez (uncle of the former president of the state oil company and current ambassador of Venezuela to the United Nations, Rafael Ramírez) and other former officials in the biggest corruption scandal of recent years that established a systematic payment of bribes to people with responsibilities in the governments of Latin America, so that the Brazilian multinational could win the tenders.
When Vice President Delcy Rodríguez turned to a group of Mexican friends and partners to lessen the new electricity emergency in Venezuela, she laid the foundation stone of a shortcut through which Chavismo and its commercial allies have dodged the sanctions imposed by Washington on PDVSA’s exports of crude oil. Since then, with Alex Saab, Joaquín Leal and Alessandro Bazzoni as key figures, the circuit has spread to some thirty countries to trade other Venezuelan commodities. This is part of the revelations of this joint investigative series between the newspaper El País and Armando.info, developed from a leak of thousands of documents.
Leaked documents on Libre Abordo and the rest of the shady network that Joaquín Leal managed from Mexico, with tentacles reaching 30 countries, ―aimed to trade PDVSA crude oil and other raw materials that the Caracas regime needed to place in international markets in spite of the sanctions― show that the businessman claimed to have the approval of the Mexican government and supplies from Segalmex, an official entity. Beyond this smoking gun, there is evidence that Leal had privileged access to the vice foreign minister for Latin America and the Caribbean, Maximiliano Reyes.
The business structure that Alex Saab had registered in Turkey—revealed in 2018 in an article by Armando.info—was merely a false start for his plans to export Venezuelan coal. Almost simultaneously, the Colombian merchant made contact with his Mexican counterpart, Joaquín Leal, to plot a network that would not only market crude oil from Venezuelan state oil company PDVSA, as part of a maneuver to bypass the sanctions imposed by Washington, but would also take charge of a scheme to export coal from the mines of Zulia, in western Venezuela. The dirty play allowed that thousands of tons, valued in millions of dollars, ended up in ports in Mexico and Central America.
As part of their business network based in Mexico, with one foot in Dubai, the two traders devised a way to replace the operation of the large international credit card franchises if they were to abandon the Venezuelan market because of Washington’s sanctions. The developed electronic payment system, “Paquete Alcance,” aimed to get hundreds of millions of dollars in remittances sent by expatriates and use them to finance purchases at CLAP stores.
Scions of different lineages of tycoons in Venezuela, Francisco D’Agostino and Eduardo Cisneros are non-blood relatives. They were also partners for a short time in Elemento Oil & Gas Ltd, a Malta-based company, over which the young Cisneros eventually took full ownership. Elemento was a protagonist in the secret network of Venezuelan crude oil marketing that Joaquín Leal activated from Mexico. However, when it came to imposing sanctions, Washington penalized D’Agostino only… Why?
Through a company registered in Mexico – Consorcio Panamericano de Exportación – with no known trajectory or experience, Joaquín Leal made a daring proposal to the Venezuelan Guyana Corporation to “reactivate” the aluminum industry, paralyzed after March 2019 blackout. The business proposed to pay the power supply of state-owned companies in exchange for payment-in-kind with the metal.