Vast bribery network uncovered in Brazilian construction company

Camargo Correa, once the third-largest construction company in Brazil, established an intricate financial network across eight countries. This network was used to channel illegal commission payments to executives at Petrobras, Brazil’s state-owned oil company. The bribery scheme unfolded in the Cayman Islands, Mauritius, Bermuda, Liechtenstein, Panama, Switzerland, Andorra and China. In 2014, Camargo Correa reported a net income of $9.6 billion.

Documents obtained by EL PAÍS reveal new details about this corrupt scheme and how it was concealed, as well as the intricate network of intermediaries, fictitious companies and encrypted accounts used to launder the bribes.

A judge from Andorra, a country that maintained banking secrecy until 2017, has charged former executive Fernando Días with money laundering. Additionally, Mover, which became Camargo Correa’s new operating company in 2018, along with three subsidiaries of the Brazilian conglomerate, have been implicated in an investigation by the Andorran justice system that started in 2017.

The judge also indicted the defunct Banca Privada d’Andorra (BPA) for allegedly helping to design a complex financial network aimed at concealing transactions and payments. The judge has charged eight former BPA executives, including its majority shareholder, Higini Cierco. Camargo Correa moved $100 million through BPA between 2008 and 2011.

The Tennis Club

This story of white-collar crime and politics goes back to July 2015 when a federal court in Curitiba (Brazil) determined that Camargo Correa, along with four other Latin American construction companies, collaborated in a corrupt cartel from 1998 to 2014. Their goal was to divide up contracts awarded by Petrobras, a major industry player that had earned a record $33 billion in profits the previous year.

Known as the G-5 or Tennis Club, the group of Odebrecht, OAS, Andrade Gutierrez, Queiroz Galvao and Camargo Correa paid bribes to Petrobras executives amounting to 3% of each contract. To conceal the bribes, the group applied “club rules” — fake contracts with shell companies, fake invoices and encrypted bank accounts controlled by third parties.

Camargo Correa used one shell company — SW Southern Investment LTD of the Cayman Islands — to move $20.6 million between 2007 and 2010. Some of these funds flowed through Switzerland and ended up in the pocket of José Sergio de Oliveira Machado, a former Brazilian congressman and president of Transpetro, a Petrobras subsidiary.

Another key piece in the scheme was a Panamanian company called Desarrollo Lanzarote that facilitated a $3.4 million transfer to another shell company’s account in Switzerland. This account was controlled by Sergio Firmeza Machado, the son of the former president of Petrobras. Andorra’s investigation established that Sergio Firmeza acted as his father’s intermediary to collect bribes.

The mechanism also relied on illegal currency exchange dealers known as doleiros, who would collect cash proceeds from Brazilian businesses and companies in order to cover up the bribes. Camargo Correa utilized multiple secret accounts in BPA to transfer funds and create a sophisticated money laundering system. Approximately $48 million circulated through the covert doleiro system.

BPA Serveis, an Andorran subsidiary of BPA led by Cristina Lozano, was also part of the corruption scheme. It moved $32 million in illicit funds and charged Camargo Correa a commission of $300,000 in 2008 for its services. “The company participated in criminal activity, acting as an intermediary and using its corporate bank account as a bridge account,” said the Andorran judge. Andorran authorities took control of BPA in March 2015 for alleged financial crimes.

BPA’s majority shareholder, Higini Cierco, was named as a representative of an encrypted account, along with former CEO Joan Miquel Prats. They allegedly funneled $1.6 million from a Brazilian construction company to Andorra to conceal its origin. “They failed to conduct due diligence measures of any kind,” stated the judge when charging the bank and its former executives with creating fictitious contracts to support the illegal money transfers.

The investigation revealed that BPA’s leadership was aware since March 2009 of the arrest of Camargo Correa executives for illicit association, money laundering and illegal campaign financing. Nevertheless, they failed to report this information to Andorran authorities. “They cooperated with Camargo Correa’s defense,” claimed the judge.

Camargo Correa said “there is no lawsuit against the company” in Andorra and that the investigation in this country pertains to a former executive who left the company “almost a decade ago.” A company spokesperson said, “All Camargo Correa assets are properly disclosed in its accounting records.”

In addition to Fernando Días, the Andorran investigation initially focused on Pietro Francesco Giavina, another former Camargo Correa executive who has since died. Both individuals were arrested in 2009 as part of the “Sand Castle” case, which delved into a network of bribery and illegal campaign financing related to contracts in Peru and Brazil. However the case was dismissed by Brazil’s Supreme Court in 2011, after ruling that the wiretaps, which were the basis of the allegations, were inadmissible as evidence.

Camargo Correa, a conglomerate with operations spanning 22 countries in the energy industry, seaports and airports, merged with another Brazilian company — Odebrecht. This construction industry powerhouse sent shockwaves through Latin America when it was revealed that it had spent a whopping $682 million to influence officials, presidents and prime ministers in 12 nations.

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