Swiss authorities open investigation into Brazil’s Odebrecht

Will Connors – The Wall Street Journal, 7/22/2015

Swiss authorities on Wednesday said they are investigating units of the Brazilian construction firm Odebrecht SA in connection with a corruption scandal involving Brazil’s state-run oil firm Petróleo Brasileiro SA, broadening an international money-laundering investigation.

The Swiss attorney general’s office alleges, in a statement, that Odebrecht units paid bribes from accounts in Switzerland into separate Swiss accounts held by former Petrobras directors. Swiss authorities didn’t name specific Odebrecht operating units or the Swiss banks involved.

Swiss authorities said they have requested help from Brazilian authorities to question suspects and “secure relevant documentary evidence” in Brazil.

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Credit-downgrade threat sinks Brazil stocks as Petrobras slumps

Rita Nazareth and Denyse Godoy – Bloomberg Business, 7/20/2015

The Ibovespa fell to an almost four-month low after Finance Minister Joaquim Levy said that a credit-rating downgrade by Moody’s Investors Service is more likely if Brazil doesn’t make economic adjustments.

Traders also pushed down the value of shares after newspaper Folha de S.Paulo reported Saturday that lower house President Eduardo Cunha would rebel against the administration by blocking a package of measures designed to shrink the budget deficit. His announcement heightened a political crisis that had already driven President Dilma Rousseff’s popularity to a record low and revived talks of impeachment.

“A credit downgrade is a big possibility as the government faces many hurdles in approving adjustment measures,” Hersz Ferman, an economist at brokerage Elite Corretora, said in a telephone interview from Rio de Janeiro. “Investors are already avoiding Brazilian assets because of that risk.”

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Petrobras pays Brazil $508 million to settle tax dispute

Jeb Blount – Reuters, 7/17/2015

Brazil’s state-run oil company Petroleo Brasileiro SA said late Thursday it paid 1.6 billion reais ($508 million) to settle part of a tax dispute with Brazilian authorities and will take a charge against second-quarter earnings.

The payment includes 1.2 billion reais in back taxes and 400 million reais in fines and interest, Petrobras, as the company is formally known, said in a statement. The second-quarter charge, after taxes, will be 1.4 billion reais.

The payment comes after Brazil’s CARF, a tax-ajudication body in the Finance Ministry, ruled that Petrobras must pay a financial-transaction tax known as the IOF. The tax was levied on Petrobras foreign-subsidiary operations in 2008.

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Brazil’s president says, ‘I’m not guilty,’ but even allies wonder if she can survive

Dom Phillips – The Washington Post, 7/16/2015

Last week Brazil’s President Dilma Rousseff, looking increasingly isolated in a deepening political crisis, gave a newspaper interview to insist: “I’m not going to fall.”

Rousseff said she was “not guilty” in the multibillion-dollar corruption scandal at the state-run oil company Petrobras, even as a criminal investigation, dubbed Operation Car Wash, tightens around leading politicians from her ruling coalition.

On Tuesday police searched houses belonging to senator and former president Fernando Collor, impeached in 1992, and other allied politicians.

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Brazil police raid homes of former president and two congressmen

JOE LEAHY, THE FINANCIAL TIMES – 7/15/2015 

Brazilian police raided the homes of former president and current Senator Fernando Collor and two other sitting congressmen on Tuesday in a sharp escalation of an investigation into corruption at state-owned oil company Petrobras.

Police drive away a Ferrari from the home of Fernando Collor, a former president and sitting senator

Police drive away a Ferrari from the home of Fernando Collor, a former president and sitting senator

As part of the operation, which sparked an angry rebuke from Mr Collor and Senate leader Renan Calheiros, police confiscated a Porsche, Lamborghini and Ferrari that local media pictured being removed from the former president’s house.

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Brazil oil giant faces $98bn shareholder lawsuit in US over corruption scheme

Rupert Neate – The Guardian, 7/10/2015

A US judge has told Petrobras bosses to prepare for a $98bn lawsuit over allegations that executives at the Brazilian oil company and senior politicians were involved in a huge money-laundering and corruption scheme dubbed “Operation Carwash”.

US district judge Jed Rakoff on Friday threw out Petrobras’s efforts to get the case dismissed and told the company and investors who are bringing the class action lawsuit to prepare for trial as soon as February 2016. Senior executives and Brazilian politicians are likely to be called to appear before the New York court, if the case gets the final go-ahead.

Shareholders, led by the UK Universities Superannuation Scheme, which manages the pension funds of British academics, claim they lost billions as a result of the scandal which has been dubbed “Operation Carwash” because huge sums of money were allegedly laundered through a money exchange in a nondescript gas station in Brasília, the Brazilian capital.

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Brazil detects billions in suspicious financial activity

ABC News, 7/08/2015

Investigators with Brazil’s Finance Ministry say they have identified as much as $17 billion worth of suspicious activity that may be part of a kickback scandal engulfing the state-owned oil company Petrobras.

Antonio Gustavo Rodrigues, head of the ministry’s financial intelligence unit, told a congressional committee the unit had detected the “suspicious movement of 55 billion reals in operations linked to Petrobras.” That’s equivalent to $17.2 billion. The website of the lower house of Congress said he made his comments Tuesday.

Rodrigues said police and prosecutors must now determine if the suspicious actions were in fact illegal.

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