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Odebrecht scandal claims highest-ranking politician

BP_Pedro Pablo Kuczynski_220318_23.jpg
It has now claimed its highest-ranking politician, Peru's President Pedro Pablo Kuczynski, who announced his resignation in an address to the nation on Wednesday, a day before he faced an impeachment vote he seemed certain to lose.

[LIMA] As Latin America's biggest construction company, Odebrecht became a major player in Brazil's development at home and abroad - until a huge corruption scandal linking it to politicians all across the region.

It has now claimed its highest-ranking politician, Peru's President Pedro Pablo Kuczynski, who announced his resignation in an address to the nation on Wednesday, a day before he faced an impeachment vote he seemed certain to lose.


The Brazilian engineering and construction firm has admitted to paying millions of dollars in bribes in several Latin American countries to secure public works contracts.

The charges against the 79-year-old Kuczynski revolve around US$5 million he received from Odebrecht between 2004 and 2013.

Though he fiercely denies the accusations, his time in office came to an end in dramatic circumstances on Wednesday, when he resigned in a televised address.

The former Wall Street banker faced an impeachment vote in the opposition-dominated Congress on Thursday that appeared unwinnable, despite overcoming an initial impeachment vote last December.

Analysts warn the political uncertainty hanging over Peru could deal a "strong impact" to its economy, Latin America's seventh-biggest.

Kuczynski is not alone in Peru: former President Ollanta Humala is in preventive detention, accused of receiving US$3 million from Odebrecht to fund his political campaigns.

Another former president Alejandro Toledo faces is facing extradition from the United States, suspected of receiving US$20 million in kickbacks.


Ecuador's vice-president, Jorge Glas, was sentenced to six years in prison in December for receiving US$13.5 million in kickbacks. He was formally stripped of his office by Congress in January.

Glas, 48, had been in preventive custody since October, after his immunity was lifted by Congress, although he was allowed to remain vice president.

Investigations and court cases are also under way elsewhere in the region.

In December 2016, the US Justice Department announced that Odebrecht and its petrochemical joint venture Braskem would pay a US$3.5 billion fine - a record in international corruption cases - after admitting to paying US$788 million in bribes across 12 countries.


Brazil is the origin of the "Car Wash" probe that continues to shake that country's political and business elite.

Building everything from the Miami Heat basketball arena to a hydroelectric dam in Angola, Odebrecht has long been one of Brazil's economic giants.

At the peak of his career at the company founded by his grandfather, Marcelo Odebrecht was one of the most influential people in the country.

Often described as a construction company, Odebrecht is also a major player in engineering, agriculture and petrochemical production.

The multinational behemoth was founded in 1944 in the northeastern state of Bahia, by Norberto Odebrecht, grandfather of Marcelo.

Former Brazilian president Luiz Inacio Lula da Silva was sentenced in July to 9.5 years behind bars after being convicted in the massive graft scandal. That sentence was increased to 12 years and one month when he lost an appeal in January. A court in Porto Alegre is to rule next week on another appeal.

That could decide whether Lula can take part in October 2018 presidential elections in which he is currently the frontrunner.

A possible takedown of Peru's president could be used in the Brazilian election to criticize the leftist Workers' Party, some analysts say.


Brazilian officials running the "Car Wash" inquiry discovered that Odebrecht was especially active in bribing politicians to help secure inflated construction contracts at Petrobras and elsewhere.

Odebrecht was also bribing politicians - sometimes right into their pockets, sometimes into their party campaign slush funds - to get favourable legislation passed.

The bribery was so intense that Odebrecht had a dedicated department in charge.

Seventy-seven executives, including Odebrecht, eventually struck a plea deal, spilling the beans on the politicians who took bribes.

Originally sentenced to 19 years in prison, Marcelo Odebrecht eventually struck a plea bargain, agreeing to testify in exchange for a reduced sentence. He began his house arrest earlier this year after two and a half years behind bars.

His testimony has implicated President Michel Temer and many of the country's top politicians.