Odebrecht case – the biggest scandal in America

The trial of a former Ecuador vice president Jorge Glas and twelve other officials suspected of receiving multimillion bribes from Brazilian construction company Odebrecht started on November 24. The National Court of Justice granted Glas a preliminary custody in October fearing that he might palter.

Millions of dollars bribe

On December 21, 2016 the US Department of Justice published the results of an investigation into the activities of the Brazilian construction company Odebrecht. Investigators have documented that the company has paid 788 million dollars in bribes to officials and politicians in twelve countries, including Brazil, Angola, Argentina, Colombia, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru, Dominican Republic and Venezuela over  past twenty years . In return Odebrecht received jobs for construction from the governments of aforementioned countries. This is the largest bribery scandal in America.

Back in the 1980s Odebrecht created a secret financial structure. In 2010 the company opened  a ‘strategy department’ that was actually responsible for bribery. Perhaps the investigators would not have known about the scale of crimes if it was not for Concepcion Andrade, who was employed as secretary in an illegally operating department in 1987. She kept collecting convicting documents over the years and handed them over to justice when she was fired from Odebrecht..

A leader in Latin America

Over the past few years 49-years old Marcelo Odebrecht was the head of the Odebrecht construction company. His grandfather established it in 1944. The company has become the leader in construction services in Latin America in recent years. It expanded marketing offer and began to operate using other names in the real estate, defense and transport sectors. It has branches in 27 countries: in Central America, South America, Africa, Europe and the Middle East.

In 2016 Marcelo Odebrecht was sentenced by the Brazilian court to 19 years and 4 months in prison for giving over 30 million dollars to Petrobras Oil Company in exchange for lucrative contracts. Few weeks later the Americans informed that the same methods were used by the Brazilian businessman to gain customers not only in Brazil. US authorities got interested in Odebrecht company because company’s money was also laundered in the United States banks. According to information gathered by investigators, in recent years Marcelo Odebrecht has given over 349 million dollars in bribes to Brazilian politicians and members of the government. In Brazil, Marcelo Odebrecht will leave prison in exchange for help in identifying bribing politicians and businessmen in different countries. The investigation is ongoing but Marcelo Odebrecht will leave prison in December in exchange for help in identifying corrupt politicians and businessmen in different countries.

San Francisco hydroelectric power station

Odebrecht has operated in Ecuador since 1987. The San Francisco hydroelectric power plant was commissioned in 2007. However it was closed few months later as few hundred errors were discovered during the construction process. Next year Rafael Correa, contemporary President of Ecuador, suspended company’s operations and cancelled several important contracts. Then Odebrecht representatives began offering bribes to the officials in order to solve the problem, as it was determined later.

It is known that Odebrecht obliged to repair the damages in the hydroelectric power station. In return Ecuador waived a 137.3 million dollar fine for failing to fulfil the contract. The contractor had to cover only 20 million dollars of loss that occurred when the errors in the construction of  the San Francisco hydro were discovered. At the same time Brazilian company returned to Ecuador market.

Rafael Correa, the former President of Ecuador, announced at the beginning of 2017 that the corrupt officials would carry responsibility. The government sent its representatives to Brazil and the United States to get more information about the crime. As a result of the investigation it was revealed that the officials in Ecuador received 33.5 million dollars in bribes between 2007 and 2016.

The first to be arrested was Mauro Teran, a former adviser to Mauricio Rodas, who was a Mayor of Quito. Teran was charged with a tax fraud. He later admitted that during the hearing he was asked why his employer commissioned the construction of the Quito subway to Odebrecht. Due to unclear colligations, the work at the building construction site was stopped.

In April 2017 the former Minister of Energy Alexei Mosquera in Rafael Correa’s government  and a businessman Marcelo Endar were arrested. They were both accused by a former lawyer of Odebrecht of accepting one million dollars in bribes to speed up the San Francisco hydroelectric power station proceeding.

As it turned out, it was just the beginning. On June 2, a dozen suspects were arrested in connection with the case in Quito, Guayaquil and Latacunga. Among them was Ricardo Rivera, the uncle of the vice president Jorge Glas.

The arrested suspects accused Jorge Glas of a participation in crime. Glas became a vice president in 2013. He has been responsible for strategic programmes during last seven years. In April 2017 Glas was dismissed by the existing President of Ecuador Lenin Moreno when some awkward information about him was disclosed. A few hours earlier Glas announced that he would not resign himself, because he had been elected by the people for a term of five years.

Even before he was put to jail, Jorge Glas was banned on leaving the country, his bank accounts were stopped and he could not control his real properties. He became the highest ranking Ecuadorian politician tried in the bribery scandal.


Other Latin American countries also try to find guilty of bribery. However, they do it with different results. Lula da Silva, former president of Brazil, was sentenced to nine years in prison for corruption, but for now he avoids punishment waiting for an appeal. Twelve people were sentenced in Columbia, including Otto Bula, a former senator, and Garcia Morales, a former  undersecretary of transport.

The imprisoned accepted the money in exchange for the commission of building the 500-kilometer road linking Bogota and the Atlantic Ocean. It was one of the largest and most expensive investments in Colombia. The construction of the second part of this route was also granted to the consortium created mainly by Odebrecht. Due to unclear tie-up the company won the bidding to build the Rio de Pro-Aguaclara road as well.

In January Edwin Luyo, a former chairman of the Subway Tender Commission in Lima, was arrested in Peru. Odebrecht admitted that they had paid him 8.1 million dollars in bribes to win the tender. At the same time, Peru government suspended the company’s license to build a 7 billion dollars worth gas pipeline.

The result of a case of Ollanta Humala, a former President of Peru, and his wife Nadine Heredia is not known yet. They were sentenced to 18 months of preliminary custody in July as a result of accusations of receiving money from the Venezuelan government and Odebrecht company. It is said that the money was used for running the presidential campaigns in 2006 and 2011.

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