International cooperation in the Odebrecht case: Dominican Republic

This content was produced in partnership by JOTA and Transparency International Brazil.

According to the plea bargain deal testimonies given by Odebrecht’s executives, the company’s illegal activities in the Dominican Republic begun during Hipólito Mejía’s administration, between 2000 and 2004, when businessman Ángel Rondón was hired to obtain advantages within the Dominican government. For more than a decade, Rondón was the middleman for at least 18 projects in the country. The businessman distributed bribes to people in various levels of the Executive and Legislative Branches.

In exchange, Odebrecht would be awarded the projects and pay bribes to Rondón worth 3 per cent of the public contracts’ cost. Among said contracts are the installation of the Hermanas Mirabal and Samaná aqueducts and Punta Catalina’s thermoelectric plant.

The “Lava-JOTA” documents give greater detail on the Dominican operation. Back in 2015, when Operation Car Wash was just over one year old, a criminal charge made by Brazil’s Public Prosecution Office named executives Rogério Araújo, Márcio Faria, Marcelo Odebrecht and financial operator Bernardo Freiburghaus as key players in the money laundering scheme, conducted via Odebrecht’s offshore companies in the Dominican Republic.

In March 2016, while making a ruling, then-judge Sérgio Moro explained the overseas route through which Odebrecht’s money went. Among the offshore bank accounts, there is a reference to one opened by the company at Banco Popular Dominicano, in the Dominican Republic. Rodrigo Janot, on the other hand, in an official opinion issued in April 2017, presented evidence that point to the transfer of the Structured Operations Sector’s physical infrastructure, Odebrecht’s “bribes department”, to the Dominican Republic, after the onset of Operation Car Wash. According to Janot, executives Luiz Eduardo Soares and Fernando Migliaccio moved to Miami, from which they travelled weekly to their new workplace, in order to operate the structure.

PUBLIC CONTRACTS WITH POSSIBLE IRREGULARITIES

• Punta Catalina Thermoelectric Plant
• Hermanas Mirabal and Samaná Aqueducts
• Palomino Hydroelectric Project

The documents presented below are official and were obtained by searching the websites of Brazil’s judicial system’s agencies. They may not be related to the facts described above, as they may refer to cases that still haven’t been fully examined.

• In an adverse judgment involving former Odebrecht directors, from March 2016, former judge Sérgio Moro records that the illegal resources that benefited these former public agents originated from bank accounts set up in the name of companies belonging to the Odebrecht Group itself. The accounts were “mostly opened at Citibank, in New York, but also at Credit Agricole Suisse, in Geneva, and at Banco Popular Dominicano, in the Dominican Republic.”  Ruling)

Date of document: March 8, 2016

Produced by: Ruling by Curitiba’s 13th Court (by then-federal judge Sérgio Moro)

• Warrant for the preventive detention of former minister Antonio Palocci, which includes a report by the Federal Police that analyses documents taken from a hard disk drive apprehended from one of Odebrecht’s offices. Palocci’s name appears in several notes made by former Odebrecht executives, and is associated with public contracts in Latin America, such as the Palomino hydroelectric project in the Dominican Republic.

Date of document: August 23, 2016

Produced by: Paraná state Federal Police

• In a report that analyses the apprehended digital documents, the Federal Police says it has located a computer file called “CONTRACT KLIENFELD X CONAMSA”. Klienfeld refers to Kleinfeld Services’ offshore company, controlled by Odebrecht, and CONAMSA refers to Consultores y Contratistas Conamsa, a company linked to businessman Ángel Rondón, who was allegedly hired by Odebrecht to obtain advantages from the Dominican government. The Federal Police describes: “According to open-sources research, Odebrecht was allegedly in a joint venture together with Conamsa, which handled a marine outfall pipeline project in the Dominican Republic”.

Date of document: June 28, 2016

Produced by: Paraná state Federal Police

• In his testimony (see video and transcription below), the former chairman of Odebrecht Ambiental, Fernando Luiz Ayres da Cunha Santos Reis, states that former Chief of Staff José Dirceu used to provide services to Odebrecht’s competition, or to other Brazilian companies with activities in Latin America. According to the former Odebrecht executive, José Dirceu enjoyed international prestige and, even after he no longer held public office, he had free access to Latin American rulers. He provides an example of Dirceu’s visits to Dominican Republic officials. According to Reis, Odebrecht tried not to make an enemy of José Dirceu, one who could hinder its international business ventures and/or exert a negative influence on the federal, state and municipal governments in Brazil. Thus, a rapprochement with José Dirceu was sought, which resulted in him giving Odebrecht the names of some politicians whose election campaigns the company needed to fund, including that of his son, federal representative Zeca Dirceu. The donations were made via slush fund, according to Reis.
• In his testimony (see video and transcription below), the former head of Odebrecht’s Structured Operations Sector (which was responsible for handling bribe payments), Hilberto Mascarenhas Alves da Silva Filho, states that the purpose of the 2014 transfer of the sector to the Dominican Republic was to evade Operation Car Wash’s investigations in Brazil. He also revealed that several pieces of evidence on the illegal payments system (Mywebday and Drousys software) were destroyed at the time of the sector’s transfer.
• In his testimony (see video and transcription below), Marcelo Odebrecht recounts the transfer of Odebrecht’s Structured Operations Sector (which was responsible for handling bribe payments), in 2014, to the Dominican Republic. The purpose of the transfer was to evade Operation Car Wash’s investigations in Brazil. He also tells how the transfer of the company’s corporate link to Panama was done in order to prevent information from passing through the United States.
• In his testimony (see video and transcription below), divided into four parts, former Odebrecht director, responsible for obtaining export credits, João Carlos Mariz Nogueira, talks about how he tried to influence BNDES to acquire resources for public contracts in countries like Cuba and the Dominican Republic, by using a front consulting company.
• In a three-part testimony (see below), former Odebrecht director Antônio de Castro Almeida (João Carlos Mariz Nogueira’s predecessor), responsible for obtaining export credits, talks about the beginning of this process, which involved the use of a front consulting company, as well as influencing Luiz Eduardo Melin, BNDES’ director. One of the public contracts, for example, involved a highway in the Dominican Republic — the country needed to build some collateral security and might have had BNDES support. He also recounts that, in every Latin American country in which Odebrecht operated, there were local managers that were aware of the company’s influence peddling and bribery scheme, such as Marco Cruz, from the Dominican Republic. These people took part in the illegal procedures and the service payments.

Fernando Luiz Ayres da Cunha Santos Reis’ testimony

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Hilberto Mascarenhas Alves da Silva Filho and Marcelo Bahia Odebrecht’s testimonies

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João Carlos Mariz Nogueira and Antonio de Castro Almeida’s testimonies (PET 6738)

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INFORMANTS

• Hilberto Mascarenhas Alves da Silva Filho (former Structured Operations Sector coordinator): provides information on the sector’s transfer to the Dominican Republic and its operations there, giving the names of those responsible.
• Marcelo Bahia Odebrecht (former chairman of the Odebrecht Group): admits to the payment of bribes and to the corruption scheme’s mode of operation.
• Maria Lúcia Tavares (secretary, handled the Structured Operations Sector’s bribe payments in Brazil): provides information on the sector’s transfer to the Dominican Republic.

The information below was obtained from the Ministry of Justice and the Public Prosecutor’s Office. Since they touch on investigations that are still in progress, the Brazilian organs did not give too much detail on their subject matters, nor did they give the name of the persons and companies involved.

TERMS OF COMMITMENT

A terms of commitment agreement is a document signed between Brazil and a country that wishes to obtain evidence from Brazilian authorities. The agreement details the conditions for sending said evidence.

Among the nine Latin American countries in which Odebrecht allegedly had illegal operations (according to the December 2016 agreement), the Dominican Republic is the only one that did not sign a terms of commitment agreement with Brazil’s Public Prosecutor’s Office. The country was the first to make a deal directly with Odebrecht, which may explain why it did not sign any agreements with the Brazilian authorities, seeing as the Caribbean country may have obtained evidence directly from the company.

COOPERATION REQUESTS MADE TO BRAZIL

Within the framework of Operation Car Wash, the Dominican Republic sent only three requests for cooperation to Brazil in the last two years, all of them having been sent in 2017.

• 2017:
• Obtaining any information that may reveal illegal actions.
• Obtain access to signed leniency agreements.
• First request – testimonies from several witnesses. Second request – financial information request.

JOINT INVESTIGATION TEAMS:

According to a report by Brazil’s Public Prosecutor’s Office from January 2019, Venezuela was not at that moment one of the countries with which Brazil was in negotiations to create a JIT – Joint Investigation Team. The three Latin-American countries in the list are Argentina, Paraguay and Peru.

This content was produced in partnership by JOTA and Transparency International Brazil.

International cooperation and other catalysts for anti-corruption prosecution

Unpublished data present x-ray on activity of Latin American investigative organizations in the Odebrecht case

Countries:

Argentina

Panama

Dominican Republic

Peru

Mexico

Guatemala

Colombia

Venezuela

Ecuador