Petrobras kickbacked: what will the corruption scandal in Brazil bring

A corruption scandal which began in 2014 has already cost the Brazilian oil giant Petrobras $2 billion. Disclosed kickbacks threaten Brazil with large-scale changes in the political system. 
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April 22 largest Brazilian oil company Petrobras, once on the market which cost $ 300 billion, with a delay of two months has published a report for 2014. Oil producers was forced to overestimate the number of assets that it cost $ 14.8 billion. In total for last year's net loss Petrobras totaled $ 7.17 billion.

Among the main reasons - broke out in 2014 corruption scandal, which has consistently gaining momentum. Losses related to the corruption case, was $ 2 billion.

The investigation itself, code-named "operation" Car Wash ", started just over a year ago. It, in turn, stemmed from another investigation, which began in 2008.

In 2013, the director of Petrobras units have been arrested for refining and marketing in the years 2004-2012, Paulo Roberto Costa, and his accomplice Alberto Youssef. Last headed the office for currency exchange and the organization was suspected of money laundering. Going to a deal with the investigation, Costa told about corrupt practices in Petrobras.

According to a former employee of the company, Petrobras overstated the value of contracts for third-party podryadchCove. Among them were the largest Brazilian developers. In exchange for bribing senior Petrobras developers (OAS, Camargo Correa, UTC Engenharia, Galvao Engenharia, Mendes Junior, Engevix) received lucrative contracts for themselves. Already a separate management of these companies has been accused of creating a cartel for overpricing in the construction of Petrobras.

Approximate scale "Car" began to emerge in the autumn of last year, when police conducted a series of raids in six Brazilian states. It was blocked more than $ 270 million belonging to persons suspected of corruption. Initially, 18 people were arrested. BBC News reported that the operation was attended by more than 300 police officers and 50 of the tax. Large resources are aimed at "car wash", explains the scale of criminal activity.

In the fall of 2014, investigators speculated that the attackers due to "suspicious" transactions transferred $ 3.9 billion. Total "suspicious" considered it a consequence of Petrobras contracts for $ 22 billion.

Double bottom

Almost immediately, the scandal surrounding Petrobras acquired a dual dimension. On the one hand, it was a"Habitual" corruption simply its scale for Brazil and all over the continent were significant. On the other - there is a political aspect. The scandal involved were political allies of President Dilma Rousseff, and she was accused of negligence. After all, it is in the 2003-2010-ies led Petrobras board of directors.

Corruption in the Petrobras blog was worth even the top managers, who was not involved in it. In February 2015, company president Maria Silva Foster (a close friend of Rousseff) and five other leaders were forced to leave their posts.

As noted to Reuters, total since March last year allegations of corruption, collusion and organization laundering 97 suspects were charged. Under police suspect are 47 current and former politicians. With one exception, they all belong to the parties of the ruling coalition Rousseff.

Moody's and Fitch in the winter-spring of 2015 lowered the ratings of Petrobras, the other member of the "Big Three» - Standard & Poor's - is limited to the deteriorating outlook for the company's rating, but it threatened to reduce, if before the end ofApril Brazilian company does not submit audited financial results.

Late last year, the auditor PricewaterhouseCoopers to certify Petrobras refused to report for the third quarter of 2014. For the financial markets, it was tantamount to a vote of no confidence. As for the company itself and for the entire Brazilian economy it has become a worrying sign.

Depositary receipts Petrobras posted on the New York Stock Exchange (NYSE). At the beginning of April 2015 it has allowed several large US investors to sue the company, accusing it of inflating the value of its assets and mislead as to the internal financial control rules.

Petrobras is the most zakreditovannoy public company in the world. Commenting on the decrease in the credit rating, Fitch's indicated that it will affect the nearly $ 50 billion debt of Petrobras. According to The Economist, in the covenants of bonds totaling $ 54 billion were written early repayment in the event of lack of audited results before the end of April. Petrobras total debt at end-March reached about $ 130 billion.

In 2010, the company held the largest instories offering, global investors sold the paper to $ 70 billion. The main shareholder is the state oil company. That is more than all lost because of the shortcomings of Internal Oversight Petrobras. The state owns 60.5% of the ordinary voting shares of the company. The exchange value of Petrobras from 2008 to 2015 decreased almost six-fold, from $ 310 (at the peak) to $ 56.7 billion on Thursday evening.

Scandal in Petrobras is already affecting the entire Brazilian business. Operation "Car Wash" affected third largest Brazilian bank Caixa Econômica, which is the country's largest mortgage companies. He is now under the control of the state, but will soon be privatized. The Wall Street Journal suggested that the IPO of the bank will be "difficult", but held.

Petrobras The point numbers

97 suspects formally charged with corruption and money laundering

47 cases of politicians under investigation by the police. With one exception, they all consist in the ruling coalition of President Dilma Rousseff

$ 200 million was the treasurer of the Workers' Party Joao Vaccari in the form of illegals remittances

$ 56.7 billion was the capitalization of Petrobras April 23

$ 310 billion cost of Petrobras reached in 2008

$ 7.8 billion of net income received in 2013 Petrobras

$ 25 billion will make Petrobras investments in 2016

Political sink

Costa said that the illegal scheme provides transfer 3% of the funds transferred by criminal way the politicians, including the Workers' Party of President Rousseff. Shortly before the presidential election of 2014, in September, a former executive described the role of the country's top officials in a corruption scandal around the state-owned company. Then the outcome of the election is not affected, but in the beginning of March 2015 the Supreme Court approved the investigation of the Petrobras case against 54 leading representatives of the establishment, some of whom are close associates Rousseff. Among them stands out Joao Vaccari, treasurer of the Workers' Party. He was arrested in mid-April on charges of money laundering. A former high-ranking official within the confessions of Pedro Barushko Petrobras late last year announced that Vaccari from 2003 to 2013year illegally received about $ 200 million to the Labour Party. However, the organization itself, as well as Vaccari, insisting on his innocence.

Against the background of the falling exchange rate and deceleration of the economy and social programs, corruption in Petrobras and colorful testimony of the accused about their rich life have caused many millions of Brazilians protests demanding the president's resignation.

The close relationship of the ruling party with Petrobras corporation has a negative impact on the ratings of President Rousseff, who before his election had been a member of the board of directors. Falling ratings record sociologists Datafolha, the analytical center of entering the media concern Grupo Folha. So, at the beginning of February 2015 23% of respondents approve of the president acts, while 44% of residents expressed their distrust her. In mid-March the country a wave of protests related to the corruption scandal Petrobras. After this rating Rousseff, according to Datafolha, fell even lower: only 13% of respondents called it a policy of "good" and "excellent", while 62% believed the government "bad" or "terrible." This is the lowest level of approval of the Presidentin the history of Brazil since 1992.

Who suspected

According to the BBC, B, in the list of officials that the General Prosecutor's Office accuses of corruption, are the chairmen of both chambers of parliament, some deputies and senators, ex-energy minister Edison Loban and former Brazilian President Fernando Color de Mello. It is considered one of the most unpopular leader in the country's history, with whose ratings are now comparing the level of support Dilma Rousseff. Color de Mello resigned as president in 1992 as a result of the impeachment because of allegations of corruption and multimillion-dollar public protests. The last eight years he served as a senator from the state of Alagoas.

In addition, in early April, The Wall Street Journal reported that the prosecutor's office became interested in Brazilian Petrobras mindravom ties with the country and the Caixa Economica. The cost of bank contracts and ministry with Petrobras was overstated by 10%, which "settled" in the pockets of politicians and top managers of the oil company. After the news of such an extension of investigative actions on the country, a new wave of pickets numbering slightly lessThan in March.

Historical parallels

In its scope and resonance operation "Car Wash" items conducted by the Brazilian Public Prosecutor's Office reminds the operation "Clean Hands", which Italian law enforcers carried out in the mid-1990s. The scandal began in February 1992 with the arrest of Mario Chiesa Milan officials for accepting bribes from businessmen. Companions Chiesa on the Socialist Party to publicly disown him and he, like the top-manager of Petrobras, Paulo Costa, in response began to testify in his own party. As in Brazil, the scandal started a few months before the general election, and also did not affect the outcome.

By the fall of 1992, the investigation has touched the entire top of the Socialist Party, and early next year, investigators started checking functionaries of other parties to the acts of corruption. In parallel, the investigation opened against the management of the group Eni, Fiat and other companies. In early 1994, the Prime Minister was the Milanese businessman Silvio Berlusconi, who promoted the decriminalization of corruption and otherwise let clCOROLLARY. A year later, under the threat of a vote of no-confidence, he was forced to resign.

All the years of the operation under investigation were about 5 thousand. Officials and businessmen, 1,5 ths. Of them were arrested. Across the country, it was disbanded more than 400 city councils affected by massive corruption, half of the current members of parliament were defendants in anti-corruption investigations. In addition, at the height of operations in the country took several referendums, which completely changed the political system of Italy. Failing election riddled with corruption Socialist Party self-destructed at the end of 1994.