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Odebrecht Corruption and Fraud Investigations / Prosecutions

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Panama to demand Odebrecht compensation.

Posted on January 3, 2017 in Panama

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Varela opens Assembly session
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PANAMA will demand  compensation from the Brazilian construction company Odebrecht for bribes it admitted paying to government officials. 

Minister of the Presidency Álvaro Alemán said Monday, Jan. 2 that the compensation will be “for the damage that the country has suffered.”

He also said the company needs to identify the recipients of those funds.

“The four million Panamanians have the right to know who were the beneficiaries of the alleged bribes paid by this company…The company has cooperated in the United States and Brazil, it must cooperate in Panama,” said Alemán at the opening of the of the Assembly legislative session.

Alemán acknowledged that there has been no communication with Odebrecht since the United States Department of Justice revealed the documents in which the construction company admitted to paying bribes totaling $59 million.

Minister of Housing Mario Etchelecu asked for greater speed in the investigations of the

Public Ministry into Odebrecht contracts. He said he opposed the $569 million contract granted to the firm for the Colón urban renewal project. “I hope that company will collaborate with prosecutors and point out officials who have participated in those acts of corruption,” he said.

Last week, the Varela government promised not to award any more contracts to Odebrecht until the company collaborates with Panama’s investigations into the bribery activities.

http://www.newsroompanama.com/news/panama/panama-demand-odebrecht-compensation

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The above postings related to the Odebrecht corruption and fraud investigation and prosecution now warrant a separate topic of their own. These postings were split out from the "miscellaneous fraud and corruption" topic and placed in this topic that is specific to Odebrecht.

As of today, CL now has three topics related to corruption and fraud:

 

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Odebrecht asked to cancel Panama contracts

Posted on January 4, 2017 in Panama

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Metro line 2 a work in progress
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THE ODEBRECHT construction company should renounce its $2.6 billion contracts with Panama’s  Government  and transfer them to other contractors says National Assembly President Rubén De León.

He said on Wednesday, Dec 4 that “the most prudent thing” is for the Brazilian company to stop building in Panama and transfer the contracts.

“I believe that in Odebrecht, of its own volition  and for the health of the country, should deliver or rescind the contracts it has with the state,” De León said in a televised interview.

Embroiled  in a major corruption scandal, the company admitted to US authorities  in December that it paid $59 million in bribes to senior Panamanian officials between 2010 and 2014 during the Ricardo Martinelli administration.

Under the Varela government  it has received the contracts for Metro Line 2,a redevelopment project in Colon and a new terminal at Tocumen International Panama City granted the company a  contract to rebuild a large section of Via Espana leading to Plaza Cinco de Mayo.

Morality issue
De León said that while it is true that the construction of works in the country cannot be stopped, there is “a morality issue in the background.”

The PRD member also called on the judicial authorities to expedite the investigations into the bribes, as thescandal cannot remain “only as stories we see in the newspapers.”

“There has to be some kind of sanction,” he said.

In 10 years and during three different government administrations, the Brazilian construction company obtained contracts individually or in consortium with other companies totaling some $9.2 billion.

Current deals
These include $2.6 billion in contracts awarded during the current government which has now said that Odebrecht cannot be on the list of bidders for projects like the fourth canal bridge and Metro Line 3.

http://www.newsroompanama.com/news/panama/odebrecht-asked-cancel-panama-contracts

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Panama judge re-opens Odebreccht criminal probe

Posted on January 10, 2017 in Panama

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A CRIMINAL  investigation into the Panama operation of Brazilian   construction company Odebrecht has been re-opened by a Panama judge.

In a ruling signed December  22 and released this week, Oscar Carrasquilla, the 12th criminal judge of the First Judicial Circuit, said that there are sufficient merits to reopen the process, for the possible commission of crimes against economic order. and that the company could also be committing the “crime of money laundering, due to the facts related to the Lava Jato investigation, which began in Brazil.”

The ruling was signed the same day that the company admitted to paying bribes of at least $59 million to Panamanian officials between 2010 and 2014.

The judge’s decision was based on a request from the Seventh Anti­Corruption Prosecutor’s Office on Nov. 11 to reopen the process.

The original complaint that accused Odebrecht of laundering money through the Panamanian banking system. was filed in September 2015.

http://www.newsroompanama.com/news/panama/panama-judge-re-opens-odebreccht-criminal-probe

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Bribery money of “very high profile” people seized in Swiss banks

Posted on January 13, 2017 in Panama

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MONEY of four “very high profile” people  under investigation in the Odebrecht bribery scandal has been seized in Swiss banks.

The announcement came on Friday Jan,13 from  Attorney General Secretary Rolando Rodríguez Cedeño

The Panamanians are being investigated as part of the probe into $59 million in bribes paid by the Odebrecht Construction company in exchange for public infrastructure contracts between 2009 and 2014 when ex-president Ricardo Martinelli was in office.

Rodríguez said that “money  in Swiss banks” belonging to these individuals has been seized.

He did not reveal their names. He said they were both directly and indirectly involved in the scheme.

On Thursday, Attorney General Kenia Porcell announced that Odebrecht had promised to pay $59 million in damages to Panama.

Rodríguez asked people to have patience with the investigation. “We do not want a weak investigation. Once we begin to adopt the measures within the the investigation, the citizens will know the results and the names of the people. We will also demand the money from them.

These are people of very high profile,” he said..

http://www.newsroompanama.com/news/panama/bribery-money-4-high-profile-people-seized-swiss-banks

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Names involved in bribery scandal will be revealed

Posted on January 13, 2017 in Panama

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THERE WILL BE no pact between Panama’s political parties to hide the names of officials and politician involved in the Odebrecht bribery scandal says deputy,  and  president of the ruling Panamenista  Party, José Luis Varela.,

He said on TVN, on Friday Jan. 13, that  he is confident that as the Public Ministry’s investigation continues, the identity of the people involved will be revealed  “And they will suffer the full weight of the law.”

The brother of President Juan Carlos Varela,  ruled out a pact between the parties Panameñista, Cambio Democratico CD and the Democratic Revolutionary Party (PRD) to hinder research and to keep hidden the identity of officials who received bribes from the construction giant.

“I do not understand how you can speak prematurely that there are pacts between three parties  and agreements to see how it can be covered up. There is information that is in The Justice Department of the United States, Switzerland and Brazil. How can it be hidden?”  he said

Odebrecht  has promised to provide $59 million to the Public Prosecutor’s Office, an amount equal to the bribes that the Brazilian company admitted having delivered to Panamanian officials in the Ricardo Martinelli years 2009 -2014, in exchange for public infrastructure contracts.

The information was released on Thursday, January 12 by the attorney general, Kenia Porcell.

http://www.newsroompanama.com/news/panama/names-involved-bribery-scandal-will-revealed

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Protesters demand Odebrecht scandal names

Posted on January 17, 2017 in Panama

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CONCERNS over a potential cover up of people involved in the Odebrecht bribery scandal potentially, during three administrations,  led to  a noon protest at the headquarters of the Public Prosecutor’s Office on Tuesday, January 17.

They were demanding disclosure of the names of people who are being investigated for receiving bribes from the Brazilian construction company, which has received over $9 billion in contracts from different Panama governments.

Banners in hand they also demanded, that Attorney General Kenia Porcell conduct a transparent investigation and “make an example” of those involved.

“It should be investigated from the administration of Martín Torrijos, then Ricardo Martinelli and then Juan Carlos Varela,” said lawyer Ernesto Cedeño, one of those who participated in  the demonstration.

Some of the participants carried banners with the motto “whoever is named, should be named” and “those who fall must fall”

On Jan. 12, Porcell announced that Odebrecht promised to pay Panama $59 million, equivalent to the bribes people that the Brazilian company admitted to handing out  to Panamanian officials between 2009 and 2014.

Two banks, who were not named, have given information as part of the investigation.

The next day, AG General Secretary Rolando Rodríguez Cedeño reported that four high ranking Panamanians are being investigated and that their Swiss bank accounts had been seized.

http://www.newsroompanama.com/news/panama/protesters-demand-odebrecht-scandal-names

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This reply (newspaper article) is being posted here in the Odebrecht scandal topic, but it applies to corruption in general in Panama.

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Varela pressured to act on corruption

Posted on January 18, 2017 in Panama

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PRESSURE is on President Juan Carlos Varela   for  action to combat corruption in the wake of the Odebrecht,  Panama Papers  and Waked scandals.

The Independent Movement (Movin) has urged the Comptroller General to audit public works carried out by Odebrecht in Panama since 2006.

The call , addressed through an open letter to  the President Carlos Varela, also emphasizes the need for the Tribunal Electoral to reveal the identity of the donors to electoral campaigns.

“Mr. President, you are responsible for dismantling the structure of corruption,” the group wrote.

“We demand that the necessary support  be assigned to the Public Prosecutor’s Office, the Institute of Forensic Sciences and the Comptroller General so that they can promptly complete their investigations.”

The group said that the allegations of corruption against Odebrecht are “no longer a suspicion, but a reality.”

Odebrecht admitted to U.S. officials that it paid bribes to officials in 12 countries, including Panama.

The company said it disbursed $59 million to Panama officials, an amount it has promised to pay back.

“The government has not protected the best interests of the state and has been unable to uncover the bribes paid by this company, increasing public distrust in our institutions and compromising our resources,” the group said

Meanwhile other organization, including the Chamber of Commerce, are pushing for the release of names of suspects under investigation in the bribery scandal.

http://www.newsroompanama.com/news/panama/varela-pressured-act-corruption

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Chamber of Commerce expels Odebrecht

Posted on January 18, 2017 in Panama

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No more Odebrecht visits to Chamber of Commerce
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PANAMA’S Chamber of Commerce, Industries and Agriculture has expelled the   bribery  ridden Odebrecht construction company from its membership rolls.

The expulsion was motivated by the Brazilian  company’s  confession revealing the massive payment of bribes  to officials of more than 12 countries, including Panama where  at least $59 million changed hands.

“Compliance with the laws and ethical and moral principles are convictions of the Chamber of on which our organization was built. Any breach of these values is grounds for expulsion, “said Jorg   García Icaza ,   president of the  chamber.

“Whoever deals with civil servants and contracts with the government, is responsible for knowing and complying with applicable laws and regulations,” says  the chamber’s ‘s Code of Ethics.

“We urge and support the Public Prosecutor’s Office and other competent authorities to conduct investigations, independently and promptly, but in strict adherence to the rule of law, so that the names of all those involved are made known and punished exemplarily so that we send a clear message that in Panama the laws are respected, “said García Icaza.

“As the most representative guild of the private sector has taken decisive action in rejecting any crime against the public administration, we invite all sectors of society to start a crusade against corruption, which will put an end to these years of the  weakening of institutions”

http://www.newsroompanama.com/news/panama/chamber-commerce-expels-odebrecht

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Foul play mooted in death of Lava Jato judge

Posted on January 19, 2017 in Panama

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Recovering bodies from the crash site
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THE SUPREME  court justice presiding over Brazil’s biggest corruption case, has died after the small plane he was travelling in crashed into the sea off the coast of Rio de Janeiro state, according to local authorities.

The Odebrecht construction company a key player in the Lava Jato corruption scandal   has admitted to paying $788 million in bribes to obtain contracts worldwide,  including at least $59 million in Panama

Judge Teori Zavascki  was  one of three passengers in  a Hawker Beechcraft twin-prop aircraft,  The timing is likely to raise questions of possible foul play reports The Guardian.

Zavascki has played a prominent role in the Lava Jato judicial inquiry into a bribery and kickback scandal that has implicated scores of politicians – including current and former presidents Michel Temer and Luiz Inácio Lula da Silva, and several dozen other prominent politicians – and resulted in the jailing of the former head of the lower house of Congress, Eduardo Cunha, plus the president of Odebrecht and other senior officers.

http://www.newsroompanama.com/news/panama/foul-play-mooted-death-lava-jato-judge

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Judicial footdragging in bribery probe

Posted on January 19, 2017 in Panama

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Police raid in Dominican Republic
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THE Odebrecht bribery scandal continues to make waves across Latin America as a plane carrying a judge investigating the Lavo Jato (car wash)  corruption case in Brazil, died in a plane crash on Thursday, January 19.

Meanwhile, not only Panama authorities appear to be dragging their feet in following up against local politicians who have received scores of millions in bribes according to  a confession from the Brazilian construction giant.

Peru’s Anti­Corruption Prosecutor Amado Enco has called for the judiciary to speed up investigations into the corruption and bribery  network operated by Odebrecht.

The company obtained 23 public contracts in Peru worth at least $16.94 billion between 1998 and 2015, of which 16 have been audited over the years.

Authorities are investigating the alleged payment of bribes totaling $29 million.

Enco is  “worried that the time will come that concrete and objective measures will not be taken in these investigations.”

He said  that the law empowers prosecutors to carry out seizures, searches and the lifting of banking secrecy.

“They are indispensable acts that should be carried out now, in an urgent way,” he told the station Ideeleradio.

The attorney added that the agency “will be at the back  of the inquiries, demanding that the corresponding authorities, and the judiciary, act quickly to hand out punishments.”

Peru has banned Odebrecht from receiving further state contracts.

Dominican Republic
The Attorney General’s Office of the Dominican Republic seized at least 20 boxes with

documents during a raid on the Odebrecht offices,

The raid on  Wednesday lasted approximately six hours, sat Dominican media reports.

The Attorney General’s Office said that the search wascarried out after comparing the information provided by Odebrecht’s representatives in the country with data obtained through intelligence work, according to Listín Diario.

Before conducting the raids, investigators again interrogated businessman Ángel Rondón, the commercial representative of Odebrecht in the Caribbean country.

Rondón has insisted that the money he received was not used for illegal payments or bribes.

Odebrecht admitted paying  bribes of about $92 million.

Panama banks
Colombia appears to  have been fastest off the mark with the arrests of two former senior officials.

The  Attorney General’s Office reported that Odebrecht paid bribe  using bank accounts in Panama and Andorra.

“Odebrecht created a structural relations office Through which accounts for bribe payments were manipulated and from that office came  the $11 million that reached accounts in Panama and the Principality of Andorra  “according to documents of the Office of the Prosecutor Seen by  RCN news..

The Colombian Public Prosecutor’s Office is following the payment route.

Gabriel García Morales, who was deputy minister of Transportation in the

Government of President Álvaro Uribe (2002-2010) was arrested at the beginning of January and  accused of receiving a bribe of $6.5 million in 2009,  presumably for  favoring Odebrecht  for a highway contract.

As part of the diligence carried out, experts traced the bearer shares that would have been used to move money for  bribes and the identity of the people involved, according to the Colombian daily El Tiempo.

Colombian authorities also arrested  ex-senator Otto Nicolás Bula, accused of receiving $4.6 milion

Odebrecht  pleaded guilty last December in a US court for violating anti-bribery rules, as a result of the Lavo Jato  investigation into a complex network of corruption between

2001 and 2016, which paid about $439 million to political parties, foreign officials and their representatives in several Latin American countries.

http://www.newsroompanama.com/news/panama/odebrecht-scandal-widens

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Odebrecht scandal goes much deeper than Uncle Sam
says that it does, fuels growing indignation here

by Eric Jackson
Declare corruption offenses to be crimes against humanity, in order that there is no statute of limitations.
from a Kiwanis Club of Panama communique
 

It would seem to be a set of mixed messages in the waning days of the Obama administration. Panama’s former President Ricardo Martinelli was allowed to live in an upscale apartment in Miami, posting taunting Twitter messages aimed back here despite an INTERPOL red letter warrant for his arrest. At the same time the US Department of Justice announced an out-of-court bribery settlement with the giant Brazilian construction company Odebrecht, the consent judgment for which mentioned $59 million in bribes paid to Panamanian public officials, via four unnamed persons, between 2010 and 2014. All of those bribes would have been to secure Panamanian government contracts during the Martinelli administration.

It wouuld all seem readily explicable to somebody who had been a student in one of former professor Obama’s constitutional law classes. One crime does not mean much about another crime, offenses committed in the context of a president’s administration do not necessarily implicate that president, a plea bargain by one person or company does not bind somebody who is not a party to that settlement, there are due process rights in extradition cases and so on. However, a bit of knowledge about the many other corruption cases ongoing in Panama and the ways that the Martinelli administration worked, plus revelations from Brazilian and Swiss government authorities and news media, will inform a reading of the information and plea agreement published by the US Department of Justice. They have denied it, but two of the four unnamed persons cited as having received some of this bribe money appear to be the former president’s two sons. Moreover, it is likely that Odebrecht paid bribes to bag people, with the understanding that they would be passed on to higher officials in the government.

The Varela administration was not helped by Vice President Isabel De Saint Malo’s declaration that it had been a whispered secret for years that Odebrecht was paying bribes to Panamanian public officials. Why, then, with the former CEO of Odebrecht in a Brazilian prison at the time, did the administration she serves promote and secure the passage of a law providing that the findings of foreign courts do not affect the ability of companies to bid on Panamanian public contracts?

Nor did the declaration by Comptroller General Federico Humbert that it was more than $59 million in bribes, with more than four people involved, serve to assuage public doubts that justice would be served. When Odebrecht won the contract for Line 2 of the Metro commuter train system — not on the lowest bid, but on a set of arcane specifications written and judged by among others a former Odebrecht consultant — why did Humbert approve that contract?

Then Attorney General Kenia Porcell held a weird press conference in which she said that she had a “verbal” agreement — whether written or oral she didn’t say, but one would presume set forth in words rather than an unspoken and unwritten tacit deal — that Odebrecht would pay $59 million to the government. Not those who received the bribes? Not repayment just by disgorging the money but also by spending years of their lives behind bars? Porcell would not answer any questions at that press conference, but later, amidst a storm of criticism, she did say that she hadn’t signed any agreement with Odebrecht.

Into the controversy came Proposed Law 245, submitted to the legislature this past September by the presiding magistrate of the Supreme Court, José Ayú Prado. That 58-pager is mostly a lot of housekeeping to implement the relatively new accusatory system of criminal procedure. The old inquisitory system did under very limited circumstances allow for plea bargains but the accusatory system makes this easier and more common. There are good and bad things to say about that, but given that the nation’s prison system is mostly inhabited by people who have been convicted of nothing but are awaiting trial, plea bargaining is seen as a way to clear cases more quickly and cut down on the backlogs on the dockets of the criminal courts. As submitted, the proposal was not controversial.

But into the proposal the National Assembly’s Government, Justice and Constitutional Affairs Committee inserted a new article, Article 22 as the proposal was renumbered. It’s specifically about plea bargains ending cases and related investigations. The proposed new article has not been published by on the legislature’s website — only the proposal before the committee amended it. Leaders of the nation’s principal bar association, the Colegio Nacional de Abogados, and prominent anti-corruption activists have cried foul. They say that, for example, Odebrecht would be able to cop a plea and that would end the investigations and cases against all of its accomplices. The chair of the committee that did that is PRD deputy Quibian Panay and in the committee and in the legislature as a whole it is reported that the new article has solid support from the president’s Panameñista Party. (The committee vote and debate on Article 22 is unpublished.)

That’s not just some weird speculation. Percolating up the Panamanian court system there is a ruling that let a member of the Panama Canal Authority’s board of directors, Nicky Corcione, and 14 co-defendants off on money laundering charges. These were the alleged accomplices of former presiding high court magistrate Alejandro Moncada Luna’s bribes and peculations. A court ruled that the plea bargain that Moncada Luna made to go to prison for five years in exchange for guilty pleas on some of the charges against him, with the other charges to be dropped, meant that all further investigations or prosecutions of the disgraced ex-judge’s partners in crime would be barred. Prosecutors are appealing that.

There has been a firestorm of criticism. The Independent Movement, closely aligned with the Motta family, has broken up its alliance with the Varela administration. The Chamber of Commerce has called for a “crusade” against corruption. The Panamanian Business Executives Association (APEDE) has lent its support for the Chamber and called for a January 26 public forum on corruption. The Kiwanis Club, a stalwart in anti-corruption movements here, has issued a stern statement that includes one of the first and strongest specific demands for legal reform at at time when lawyers are agitating for a new constitutional convention: they want to abolish statutes of limitations for public corruption.

Considering that the first contracts between Odebrecht and the Panamanian government were negotiated a decade ago during the Martín Torrijos administration and that new ones were negotiated under the current administration, full disclosure of Odebrechts’s systematic bribery would likely be a political bombshell to blast away all three major parties. (And take away US statutes of limitations and look at the State of Florida and Miami-Dade County, and you’d see Odebrecht scandals ripping both major US political parties too.)

Administrative Prosecutor Rigoberto González, looking at the various ongoing Odebrecht contracts, has called upon the Housing Ministry, the Ministry of Public Works and the Metro Secretariat to file criminal complaints so that formal investigations of possible bribes related to current contracts can be started. Housing Minister Mario Etchelcu says he won’t do that, Metro secretary and Canal Affair Minister Robeto Roy says he will do that and Public Works Minister Ramón Arosemena isn’t answering that question.

There will be a test of strength of sorts when an ad hoc Committee Against Impunity holds a rally against corruption at the El Carmen Church on Via España on the afternoon of January 25. If hardly anybody shows up then the politicians will surely figure that everything will blow over and they can rig the system so that the takers of Odebrecht bribes are never identified by name and face. But the calls to identify not only those who took outright bribes, but also those who received campaign contributions from Odebrecht, grow louder and more frequent. The Electoral Tribunal’s explanation that campaign contributions are confidential matters that by law they can’t reveal is ever less accepted. And revelations from abroad about Odebrecht crimes in Panama keep coming, notwithstanding Varela’s law that these mean nothing.

Is corruption the law here? It could be. In effect is has been. But now it’s not just a bunch of gadfly lawyers and leftist agitators who are objecting to that. A crisis appears to be brewing.

 

Odebrecht

Odebrecht projects in Panama. Graphic by criminals.

http://www.thepanamanews.com/2017/01/the-governments-growing-odebrecht-problem/

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MEDIA WATCH: Inaction or Odebrecht cover up?

Posted on January 21, 2017 in Media Watch, Panama

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Varela administration awarded Odebrecht over $2.5billion in contracts despite red flags.
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Editorial La Prensa, Jan 21

TOMORROW marks 30 days since the US Department of Justice confirmed that Constructora Norberto Odebrecht confessed to the payment of at least $59 million to senior Panamanian officials and their close associates.

In the month that has passed, nothing has happened in our country. Nothing! No goods seized, no offices searched no officials or businessmen investigated.

This lack of action contrasts with what is happening in other countries where Odebrecht has business. From action in Peru, to e x-ministers and in Colombia facing justice.

Of the 12 countries where the company acknowledged that it paid bribes , only  three  retain what appears to be blatant impunity: Angola, Mozambique and Panama.

We are the Skyscraper country, but also Panamanian politics has condemned us to be part of this shameful league of nations. Are we ever going to leave the company  of those with so little credibility?

And if that  was not enough, The President of the Republic, political administrator of our State, warmly asks confidence in the Public Prosecutor’s Office, while openly ignoring public concerns   and does not instruct his ministers to become prosecutors in legal proceedings into  Odebrecht as consequences of their corruption.

Nor does he instruct them to proceed civilly against this company, as was  done  with Finmeccanica, in order to recover the costs and the high damages against the country.

Worthy of condemnation is The Government’s reaction, to label the Odebrecht affair as a media affair is worthy of condemnation , when it really is a reflection of the greatest rot of the Panamanian political class.

Mr. President: The country expects from its top leader concrete actions that demonstrate genuine interest in knowing the truth, no matter who falls.

Do not forget that, despite all the alarms and warnings, your government awarded contracts to Odebrecht  of more than $2,5 billion with the excuse that other bids were unprofessional. You also have  a lot of responsibility for  this enormous blunder.

Now, citizens disgusted with so much corruption, demand that you move from the discourse to the facts and comply with your inalienable duty to recover what has been stolen and to know the whole truth.

The best heritage to leave to your country is not works. Your best legacy is to  take the necessary measures to achieve a frontal fight against corruption and  see that justice be done.

President Varela, Ministers of State: This is not a media issue.

http://www.newsroompanama.com/news/panama/media-watch-inaction-odebrecht-cover

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I find it very interesting that, according to this news article, it will be Odebrecht (the company) that will disclose the names of the Panamanian officials who received the $59M in bribes. Is that information not coming from the Panamanian officials involved in the Odebrecht investigation because they do not know who received the bribes? Or do they know but cannot by law divulge such information? Or ...?

This gets more intriguing with every passing day.

 

Odebrecht name release.png

http://www.prensa.com/in_english/Panama-debe-pedir-informes-Brasil_21_4672992655.html

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I'm wondering if the Panamanian population is learning that corruption and bribes will be discovered and those involved will be charged? More info later?

Edited by Pat
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Social media listing names of alleged bribed officials

Posted on January 22, 2017 in Panama

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 PANAMA,  in spite of its laggardly approach to the Odebrecht scandal, raising fears of a cover as names of high ranking officials said  to have pocketed  bribes  circulate on social media, will  get details of the overseas accounts  used   to transfer the money.

As part   of its  agreement with Brazilian prosecutors, the company  has pledged to identity all the accounts  used for the payment of bribes and political donations it made during the past 16 years.

This means that Panama, where the company admitted to paying bribes totaling $59 million between 2009 and 2014, will have complete information about the company’s activities in this country, where it has received contracts totaling more than $9 billion.

The Public Ministry has opened an investigation into the company, and it will have the responsibility to request timely reports that detail the involvement of Panama officials.

This will allow the government to both recover the money that was paid illegally and prosecute the corrupt officials reports La Prensa.

Meanwhile there is a growing demand in civil  groups and among political observers for the release of the names of the high profile suspects under investigation.

Odebrecht has already agreed to reimburse Panama the $59 million.

While the company has only admitted to paying bribes during the administration of former President Ricardo Martinelli, it served the Martin Torrijos administration and has received over $2.5 billion in contracts from the current  administration.

Names of alleged bribe recipients in  all three administration are part of the on-line rumor mill. The list details of the alleged bribes totalling $59 million. although the country’s comptroller has publicly stated that  the money that changed hands was likely more.

http://www.newsroompanama.com/news/panama/social-media-listing-names-alleged-bribed-officials

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21 hours ago, Moderator_02 said:

I find it very interesting that, according to this news article, it will be Odebrecht (the company) that will disclose the names of the Panamanian officials who received the $59M in bribes. Is that information not coming from the Panamanian officials involved in the Odebrecht investigation because they do not know who received the bribes? Or do they know but cannot by law divulge such information? Or ...?

This gets more intriguing with every passing day.

I thought of two more possibilities for the current non-disclosure of the names, assuming the Panamanian investigators do know them:

  • perhaps they are protecting those individuals from what could become vigilante justice, or
  • perhaps the bad guys have already left the country.

Just my thoughts.

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Odebrecht Downrated Again

Fitch Ratings has downgraded Brazilian construction firm from B- to CC, arguing that the revelations about bribes "have exacerbated its reputational risk".

Friday, January 20, 2017

From a press release by Fitch Ratings:

Fitch Ratings-Sao Paulo-17 January 2017: This is a correction of a release published Jan. 17, 2017. It corrects the rating for the USD800 million senior unsecured notes due 2023.

Fitch Ratings has downgraded and removed from Rating Watch Negative Odebrecht Engenharia e Construcao S.A.'s (OEC) ratings, including its foreign and local currency long-term Issuer Default Ratings (IDRs) to 'CC' from 'B-' and its national scale long-term rating to 'CC(bra)' from 'BB-(bra)'. 

Fitch has also downgraded to 'CC/RR4' from 'B-/RR4' approximately USD3.1 billion issuances of Odebrecht Finance Ltd. (OFL), which OEC unconditionally and irrevocably guarantees. The 'CC/RR4' rating of OFL's unsecured public debt reflects average recovery prospects in the event of a default, ranging between 31% to 50%.

A complete list of rating actions follows at the end of this release.

KEY RATING DRIVERS
The downgrades reflect the increasing and substantial challenges OEC faces in 2017 to restructure its activities and recover its cash flow generation capacity amidst a continuing cash burn for parental support. Fitch sees the company's ability to replace its backlog as further impaired after details were published by the U.S. Department of Justice (DoJ) under a plea agreement. The information published has exacerbated OEC's reputational risk and triggered a series of investigations in some countries where the company operates. 

New Investigations
Fitch's expectations that the plea agreement would improve the status for OEC have not materialized. Instead, it has already triggered further corruption investigations in Colombia, Ecuador, Panama and Peru, which is likely to result in the stoppage of projects under construction, suspension from participating in new public biddings and request of fine payments. These governments may uphold payments related with the ongoing contracts under scrutiny, which worsens the company's increasing receivables balance and further pressure its liquidity. OEC will have to negotiate a solution in each of these countries in order to be able to participate in new biddings. Fitch understands all potential additional fines to be charged by other countries will be covered under the BRL3.8 billion initially negotiated by Odebrecht group.

Backlog Renewal Relevant Challenges
Fitch anticipates another year of backlog reduction for OEC in 2017 with potential to reach as low as USD18 billion by the end of the year. The Brazilian weak macroeconomic condition and infrastructure agenda combined with the company's damaged reputational risks poses substantial concern on OEC's capability to replace backlog domestically and abroad. By the end of September 2016, OEC's backlog of USD21.3 billion decreased 24% from USD28.1 billion registered by the end 2015.

Fitch is also concerned with OEC's backlog quality deterioration. As the company executes projects with payments performing as expected, it is being left with projects facing suspended or late payments. The agency estimates that approximately 42% of the company's USD21.3 billion backlog in the third quarter of 2016 has been executed at a very slow pace (i.e. beyond 15 years to conclude).

Difficulty to Monetize Receivables
OEC continues to face difficulties monetizing receivables. Oil exporter countries have stretched contracts to reduce monthly disbursements, and BNDES has suspended the loans of projects abroad due to the corruption scandal. Receivables stopped piling up in third quarter of 2016 at the expense of revenue deceleration since second quarter 2016. In September 2016, OEC had BRL12.8 billion (USD3.9 billion) in short-term receivables.

Cash Burn for Parental Support
OEC continues to support its parent, which further pressures liquidity. In the third quarter 2016, OEC provided USD100 million intercompany loan to Odebrecht S.A., with an additional amount in the fourth quarter 2016. This support materially differs from Fitch's initial expectation that Odebrecht S.A. would pay back the USD250 million loan to OEC in 2016. The timeframe of holding support returning to OEC is uncertain as it depends on the group's sale of assets strategy.

KEY ASSUMPTIONS
--Backlog falling 40% in 2016 and 6% in 2017 with execution pace slowing down;
--Net revenues falling 64% in 2016 and 15% in 2017 in BRL terms;
--EBITDA margin of 8.2% in 2016 and 8.4% in 2017 pressured by severance payments;
--Capex at 2% of net revenues for both years and no dividends distribution in 2016.

http://www.centralamericadata.com/en/article/main/Odebrecht_Downrated_Again

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