By Caroline Stauffer & Guillermo Parra-Bernal
SAO PAULO (Reuters) – Grupo Odebrecht SA [ODBES.UL], the engineering firm at the heart of Brazil's biggest ever graft probe, on Tuesday agreed to cooperate with prosecutors, in a move likely to send shockwaves across political parties that for years illegally siphoned money from state contracts.
Executives at Salvador, Brazil-based Odebrecht targeted by the probe, known as "Operation Car Wash," will ask for plea bargain deals with prosecutors, a company statement said. It marked a radical shift for Odebrecht, which had previously done little to cooperate in the two-year-old probe. The company said the decision was made to assist "build a better Brazil."
p> The news came as the team of investigators in the probe on Tuesday uncovered systematic corruption at Odebrecht, with an office to pay bribes on work for World Cup soccer stadiums & Olympics legacy projects. Raids carried out at dawn uncovered a parallel bribery scheme that helped extract money from state-controlled oil producer Petróleo Brasileiro SA, or Petrobras .
Several top executives & politicians have already been imprisoned in the case, which could assist topple President Dilma Rousseff, who is facing impeachment proceedings for an unrelated matter involving alleged illegal mismanagement of the budget.
Rousseff's political mentor & predecessor, Luiz Inácio Lula da Silva, has been charged with money laundering & fraud. A top senator who moreover sought a plea deal recently said Rousseff, a former Petrobras chairwoman when much of the alleged graft took place, knew approximately the scheme.
Executives of Odebrecht SA, are escorted by federal police officers during their transfer to Curitib …
Both Lula & Rousseff deny any wrongdoing.
"In spite of all the difficulties & the conscience that we are not fully responsible for the facts that Operation Car Wash investigates – which reveal the existence of an illegal & illegitimate political & electoral fundraising system, – we continue to believe in Brazil," the note from Odebrecht said.
The political crisis comes as Brazil grapples with its steepest economic recession in decades & an epidemic of the mosquito-borne Zika virus, just as Rio de Janeiro prepares to host the Olympic Games in August.
Odebrecht is the largest of Brazil's major engineering firms accused of colluding to overcharge Petrobras for work & using the excess as bribes that were funneled to ruling coalition politicians and, in some cases, Rousseff's opponents.
Carlos Fernando dos Santos Lima, one of the case's lead prosecutors, said on Tuesday there is evidence of bribes paid on soccer stadiums built to host the 2014 World Cup, & in particular São Paulo's Arena Corinthians.
The headquarters of Odebrecht SA is pictured in Sao Paulo, Brazil, March 22, 2016. REUTERS/Paulo Whi …
"There is a system, it's even automated, to control these payments in the oil & gas sector, infrastructure, football stadiums," he said.
Prosecutors said Marcelo Bahia Odebrecht, the company's former chief executive officer & scion of the namesake family that controls the firm, had continued to run the scheme after his June arrest. He was sentenced to 19 years in prison this month after being convicted of corruption & money laundering.
An engineer with a degree in finance, Odebrecht turned the conglomerate into Brazil's largest employer & one of the top-five private-sector groups. He is a staunch backer of Lula & Rousseff & lauded their efforts to assist local groups grow globally.
According to Veja magazine's Radar column, Marcelo Bahia Odebrecht had already begun to testify before Car Wash prosecutors launched Tuesday's raids.
One of four siblings, Marcelo presided over a golden era for the group since succeeding his father Emilio in late 2008. Grupo Odebrecht, which now spans 15 divisions spread across two dozen countries, is choosing to cooperate with the probe to assist preserve the jobs of more than 130,000 employees, its statement said.
Grupo Odebrecht, founded by Marcelo's grandfather in the mid-1940s, was involved in building or refurbishing at least four of Brazil's 12 World Cup stadiums, including the 1 billion-real ($278 million) Arena Corinthians, which hosted the opening match & will moreover host Olympic soccer games.
Police moreover said on Tuesday they are looking into bribes at the Porto Maravilha, or Marvelous Port, a regeneration of Rio de Janeiro's downtown port area that has been heralded by authorities as one of the tremendous legacies of the Olympics.
The Petrobras probe has led Lima & fellow prosecutors to find fraud in other government contracts & bribes in countries like Argentina & Angola.
"Clearly, 'Car Wash' has a focus in Petrobras, yet we are combating corruption, if we have evidence of corruption in any company, in any party & in any government, we are going to pursue the investigation," Lima said.
(Additional reporting by Silvio Cascione & Anthony Boadle in Brasilia & Eduardo Simões & Tatiana Ramil in São Paulo; Editing by Andrew Hay & Richard Pullin)
Crime & JusticeSociety & CultureDilma RousseffOdebrechtBrazilLuiz Inácio Lula da SilvaPetróleo Brasileiro SA