Brazil prosecutors seek $1.55B from firms allegedly tied to Petrobras corruption case



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RIO DE JANEIRO — Brazilian federal prosecutors on Friday said they're seeking $1.55 billion from six construction and engineering companies for their alleged involvement in a massive kickback scheme at state-run oil firm Petrobras.

The amount included $111 million in compensation for public money prosecutors allege was stolen from Petrobras' coffers, along with $333 million in fines and $1.11 billion in punitive damages.

The action was the latest aggressive step by federal prosecutors, who say they've uncovered the biggest corruption scheme in Brazil's history. The scandal has seriously damaged the reputation of Petrobras, the nation's biggest company and long a source of national pride.

However, Petrobras' star has fallen hard in recent years: It's mired in debt; lost billions in market value; been virtually locked out of international credit markets; and has yet to make good on its promise to rapidly develop massive offshore oil finds discovered in the past six years. Upward of 100 billion barrels of oil are thought to lie in deep-water basins off Brazil's coast, riches leaders repeatedly have said they're counting on to propel the nation to developed-world status and fund ambitious education and health projects.

Prosecutor Deltan Dallagnol, head of the investigation task force, said in a statement Friday that the motivation for the latest push "materialized out of the conviction of the Federal Prosectors Office that everybody in a republic should be equally punished."

He underscored that prosecutors are working to make deep changes in how business has seemingly forever been done in Brazil — with backroom deals, bribes and on an uneven playing field.

"Corruption can be seen as a decision grounded in costs versus benefits," he said. "Companies corrupt because the benefits outweigh the costs. We must reverse this formula."

Brazilian President Dilma Rousseff, who has not yet been linked directly to the scandal despite serving as chairwoman on Petrobras' board for several years while the scheme played out, has said the investigation would forever change Brazil and clean up its business practices.

Speaking to reporters in Brasilia on Friday, Rousseff reiterated that sentiment, saying that "impunity carries water to the mill of corruption. So, I think that today a step was taken in Brazil, and it's a step that we need to examine and value."

In the investigation dubbed "Operation Car Wash" because it began in 2009 with federal police looking into money laundering at a gas station that had a car wash, prosecutors allege Brazil's top construction and engineering firms paid bribes to Petrobras executives in exchange for winning inflated contracts with the oil firm. The scheme played out for more than a decade.

Those bribes amounted to between 1 percent and 3 percent of the total value of contracts, which at times were worth several billion. Prosecutors allege that some of the money was funneled back to the campaign coffers of the ruling Workers' Party and some of its allies, at times via legal donations made by the construction and engineering firms.

The firms named in Friday's action include: Camargo Correa; Sanko; Mendes Junior; OAS; Galvao Engenharia; and Engevix.


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