Brazil ministers rebut new wave of campaign funding allegations

Maria Carolina Marcello and Eduardo Simões – Reuters, 6/26/2015

Two Brazilian ministers denied on Friday that there was anything illegal about campaign donations made in recent years by a businessman allegedly involved in massive corruption scandal at state-run oil company Petrobras.

President Dilma Rousseff’s chief of staff, Aloizio Mercadante, denied that 500,000 reais ($159,908) in campaign donations made to him in 2010 by companies owned by Ricardo Pessoa were linked to kickbacks at Petrobras.

Social Communications Minister Edinho Silva said in a separate statement that 7.5 million reais donated by Pessoa to Rousseff’s presidential campaign last year were legal and approved by Brazil’s Supreme Electoral Court. Silva was the treasurer of Rousseff’s campaign.

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US court to hear arguments that Brazil oil giant should stand trial for corruption

Rupert Neate – The Guardian, 6/25/2015

A US court will hear arguments on Thursday that oil giant Petrobras should stand trial for a culture of bribery and corruption that has rocked Brazilian businesses and political elite and lowered the company’s value by $90bn.

Investors, led by the UK Universities Superannuation Scheme, which manages the pension funds of British academics, claim they lost billions as a result of the huge money laundering and corruption scheme. The investors, which also include the retirement funds of state workers in Ohio, Idaho and Hawaii, claim in court filings that Petrobras was “rotten to the core”.

The scandal, which has been dubbed “operation carwash” because huge amounts of money were allegedly laundered through a money exchange in a nondescript gas station in the Brazilian capital, has already led to the indictment of more than 40 Brazilian executives allegedly involved in the bribery scheme dating back to 2006.

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Brazil ‘Carwash’ shrugs off notoriety tied to Petrobras scandal

Will Connors and Paulo Trevisani – The Wall Street Journal, 6/21/2015

The Posto da Torre, or Tower Gas Station, inspired the code name for a sweeping corruption probe into Brazilian oil giant Petróleo Brasileiro S.A., a case that has led to criminal charges against some in the highest echelons of the country’s business and political elite.

The station’s notoriety hasn’t stopped customers in Brazil’s capital from lining up for its cheap gas and fried snacks.

About 2 miles west of the city’s main government buildings, the Tower Gas Station played a central role in the investigation dubbed “Operation Car Wash,” according to authorities. Prosecutors say money launderers used a currency exchange and money-wiring service on the premises to help Petrobras executives transfer money from the oil company into overseas bank accounts.

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Roots of a Brazilian scandal that weighs heavily on the nation’s economy, politics

Marla Dickerson – The Wall Street Journal, 6/19/2015

Brazilian prosecutors allege that for at least a decade up until 2014, some of the country’s largest construction firms colluded to inflate the cost of contracts at state-owned oil giant Petróleo Brasileiro SA by an average of about 3%.

Crooked Petrobras executives who brokered the deals got a portion of the ill-gotten gains, authorities say, funneling the rest to a slush fund for lawmakers and political parties, the prosecutors say. A web of money launderers allegedly helped them hide the money overseas.

The criminal investigation, dubbed Operation Car Wash after a gas station that was allegedly used to launder money, came about almost by accident. In 2013, investigators in southern Brazil were tracking the movements of an admitted money launderer named Alberto Youssef. Their curiosity was piqued when Mr. Youssef gave a $78,000 Land Rover to a former Petrobras executive name Paulo Roberto Costa. Authorities said that break helped them uncover one of the largest corruption scandals in Brazilian history.

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Brazil arrests powerful Odebrecht CEO in Petrobras probe -media

Caroline Stauffer and Walter Brandimarte – Reuters, 6/19/2015

Brazilian police on Friday arrested Marcelo Odebrecht, the head of Latin America’s largest engineering and construction company Odebrecht SA, local media said, pulling the most high-profile executive into the corruption investigation at state-run oil firm Petrobras.

Federal officers had orders to arrest a total of 12 people in four states and bring them to the southern city of Curitiba where the investigation is based, according to a federal police statement that did not give the names of the detained.

Odebrecht, which has 200,000 workers and a presence in 21 countries, said in a statement police had raided its offices in Sao Paulo and Rio de Janeiro and made arrests, but did not confirm any names. The company said the arrests were “unnecessary” because it was collaborating with investigators.

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Head of Brazilian federation flees Switzerland ahead of FIFA presidential vote

Martin Rogers –  USA TODAY, 5/29/2015

World soccer’s corruption scandal took another bizarre twist on Thursday when the head of Brazil’s national federation fled Switzerland on the eve of the presidential vote that will decide whether Sepp Blatter remains in charge of FIFA.

Marco Polo Del Nero left Switzerland along with members of his personal delegation, amid reports that he was panicked by the arrest of his predecessor Jose Maria Marin in Zurich the previous day.

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In Brazil, FIFA scandal met with sense of vindication

Taylor Barnes, USA Today – 5/28/2015

As word of the arrests of 14 FIFA officials and sports executives spread, many Brazilians responded with surprise, a measure of support and a sense of vindication over the news.

The country has seen large-scale protests since 2013, often directed at the government with many exasperated with expenditures on last year’s World Cup and the Summer Olympics, which Rio de Janeiro will host next year.

In the year since the World Cup, outsize stadiums built in cities across Brazil that do not have soccer clubs large enough to fill them have reportedly been used as bus parking lots, and venues to host children’s parties, weddings and religious events.

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