The silence of the Mozambican government in the Odebrecht bribery case

The Brazilian construction company Odebrecht may have bribed top Mozambican officials between 2011 and 2014, possibly during the construction of Nacala Airport. Authorities have so far preferred to remain silent.

Recently, the US Department of Justice has uncovered several corruption scandals involving Brazilian construction company Odebrecht, said to have paid bribes valued at US$788-million in 12 African and Latin American countries, including Angola and Mozambique.

In the case of Mozambique, senior government officials are said to have received about US$900,000 between 2011 and 2014, possibly involving the construction of Nacala Airport, which cost the Mozambican state US$216.5-million. The case has rocked a country already immersed in similar murky cases.

Deutsche Welle Africa interviewed Baltazar Fael, a researcher at the CIP, on the subject.

DW Africa: Is it normal for the Mozambican authorities to remain silent about an allegation of corruption?

Baltazar Fael (BF): Normal, it is not. The Mozambican government, through its institutions, in this case the AttorneyGeneral’s Office (PGR), must take over, as the defender of legality and one that repudiates acts of corruption by its employees. The other situations are those examples, which I could enumerate, in which the Mozambican government did not act.

So we need stronger action by the PGR in corruption cases, even if they involve corruption at international level. These cases must be treated like the others, although we do not have enough data to tell us that all cases, even the oldest, are treated as they should be.

DW Africa: Will it take some kind of pressure, as has been customary in recent times, for the PGR to start investigating the Odebrecht case?

BF: We think so. It is possible that somehow we will do some of the work that the PGR itself should do, which is to address these cases in line with the principle of legality and not the principle of opportunity, which is to pursue those cases which they think should be followed. So there needs to be this pressure. But I am talking about the Odebrecht case. Let us not forget that a short time ago senior officials were accused on issues related to LAM, senior officials involved in the acquisition of Embraer aircraft.

And this case is not so old, and there are other relatively recent cases involving international corruption in which the PGR has not produced results or shown exactly

what it is doing in these cases. Pressure must be brought to bear, and the CIP is going to work to make way for the organs of administration of justice, in this case the PGR and the Public Attorney’s Office, to take a more proactive attitude towards public clarification of these cases.

DW Africa: Faced with this lethargy that dominates the PGR, what kind of reforms does the CIP suggest?

BF: There is clearly an intrinsic link between politics and the judicial system in Mozambique. The first thing to do is solve this. The organs of the judiciary must be independent. And in the case of the Public Attorney’s Office, its autonomy must be even greater than what it has been, which is more in the formal sense. When we speak of independence we are talking about the judiciary, which acts without observing pressures or issues of a political nature. And what we see is that this body often waits for endorsement from the government to act.

Source: Deutsche Welle
Mozambique among countries where Odebrecht paid bribes

According to the United States Justice Department, Mozambique was one of a dozen countries where the Brazilian construction company Odebrecht paid bribes to secure contracts.

On Wednesday 21 December, Odebrecht and the Brazilian petro-chemical company Braskem pleaded guilty in New York to paying hundreds of millions of dollars in bribes to government officials across the globe. The charges were brought by the United States, Brazilian and Swiss authorities, and the two companies settled the case by agreeing to pay a combined fine of US$3.5-billion.

Most of the fine will be paid by Odebrecht, which told the prosecutors that it is only able to pay about US$2.6-billion, although it agreed that the appropriate fine would be US$4.5-billion. The US and Switzerland will each receive 10% of the fine, while the remaining 80% goes to Brazil. The investigation found that Odebrecht and Braskem worked together, using a concealed Odebrecht unit which operated as a “Department of Bribery”, channeling large sums to corrupt government officials on three continents.

“These resolutions are the result of an extraordinary multinational effort to identify, investigate and prosecute a highly complex and long-lasting corruption scheme that resulted in the payment by the defendant companies of close to US$1-billion in bribes to officials at all levels of government in many countries”, said US Attorney Robert Capers, cited in the Justice Department release.

“In an attempt to conceal their crimes, the defendants used the global financial system – including the banking system in the United States – to disguise the source and disbursement of the bribe payments by passing funds through a series of shell companies”, he continued. “The message sent by this prosecution is that the United States, working with its law enforcement partners abroad, will not hesitate to hold responsible those corporations and individuals who seek to enrich themselves through the corruption of the legitimate functions of government, no matter how sophisticated the scheme”.

Stephen Richardson, an assistant director of the Criminal Investigative Division of the Federal Bureau of Investigation (FBI), added “This case illustrates the importance of our partnerships and the dedicated personnel who work to bring to justice those who are motivated by greed and act in their own best interest.

The FBI will not stand by idly while corrupt individuals threaten a fair and competitive economic system or fuel criminal enterprises. Our commitment to work alongside our foreign partners to root out corruption across the globe is unwavering and we thank our Brazilian and Swiss partners for their tireless work in this effort”.

“No matter what the reason, when foreign officials receive bribes, they threaten our national security and the international free market system in which we trade”, said William Sweeney, of the FBI’s New York field office. “Just because they’re out of our sight, doesn’t mean they’re beyond our reach. The FBI will use all available resources to put an end to this type of corrupt behavior”.

The Odebrecht bribery department was called the “Division of Structured Operations”. The head of this unit

reported to the highest levels in the company, using an entirely separate communications system, outside of the company’s normal e-mail and correspondence systems. The funds involved were not recorded on Odebrecht’s official balance sheets.

The US Justice Department found that “Many of the transactions were layered through multiple levels of offshore entities and bank accounts throughout the world, often transferring the illicit funds through up to four levels of offshore bank accounts before reaching the final recipient”.

The bribery scheme began in 2001 and lasted for around a decade. During that time, around US$788-million was paid in bribes, in connection with more than 100 projects in 12 countries (Angola, Argentina, Brazil, Colombia, Dominican Republic, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru and Venezuela). In Mozambique Odebrecht paid bribes of around US$900,000 to government officials between 2011 and 2014. The Justice Department does not name these officials.

It adds that “the corrupt payments included approximately US$250,000 in payments to a high-level government official in Mozambique in exchange for Odebrecht obtaining favorable terms on a government construction project, which the government had not been inclined to accept before Odebrecht offered to make the corrupt payment”. The bribe was paid in installments of US$135,000 and US$115,000, using the Division of Structured Operations’ unrecorded funds from an offshore company.

The Justice Department does not say which construction project was involved, but far and away the largest and most controversial of the projects for which Odebrecht was the contractor is the international airport in the northern city of Nacala. The airport was inaugurated in December 2014 by the then president Armando Guebuza. The total cost of the airport was put at US$200-million, partly financed by a loan from the Brazilian state bank, National Bank of Economic and Social Development (BNDES).

So far, the airport has been an embarrassing flop. It is an international airport that has no international flights. Only LAM uses it for a few domestic flights to Maputo and Tete. The runway can accommodate large aircraft such as the Boeing-747, and it has the theoretical capacity to handle half a million passengers a year. But to date no foreign airlines have expressed the slightest interest in using Nacala.

A much more useful Odebrecht project was the plan for a bus rapid transit (BRT) system in Maputo, which would go a long way towards solving the chronic deficit in public transport in the Mozambican capital. But that seems to have fallen victim to the “Operacao Lavo Jato” (Operation Car Wash) corruption scandal in Brazil, and is one of many construction projects in several countries to be funded through the BNDES that have been suspended sine die, because their contractors have been named in connection with “Operacao Lavo Jato”.

This is the second Brazilian company which has confessed to paying bribes to Mozambican officials. The aircraft manufacturer Embraer admitted to paying US$800,000 in 2009 to ensure that LAM purchased two Embraer planes.

A document signed by Embraer executives and Brazilian prosecutors said that the bribe was demanded by the then chairperson of the LAM board, José Viegas, with Mateus Zimba, then the head of the Mozambique operations of the South African petro-chemical company, Sasol, acting as middleman. According to Mozambican media reports, Mateus Zimba, the man accused of taking an US$800,000 bribe from Embraer in 2008, has been dismissed from his job as country manager of GE Oil & Gas.

Source: Agencia de Informacao de Moçambique/Zitamar News

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