Petrobras Corruption Indictments Expected To Continue

Did Chanos cover too early? Following the end of a Congressional inquiry, additional indictments are expected to piggy back existing ones.

A probe into corruption at the state-owned oil company Petrobras, dubbed Operation Car Wash by the Brazilian Federal Police, was made public in March of this year. Last week saw that investigation come to an end with the indictment of 36 individuals including Petrobras executives, construction company execs and politicians. In the week since, many of those indicted have admitted wrongdoing and entered in to plea deals while cooperating with investigators.

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Parallel investigations

The non-political prosecutors of Operation Car Wash maintain that Petrobras had roughly $1.7 billion stolen from them as a group of construction firms colluded to drive up the price of contracts that were meant to be competitive. Those companies are also accused of bribing execs at Petrobras from 2004 and 2012. Many continue their stance of innocence while others are revealing more information to authorities.

The congressional hearing ended yesterday, but was highly politicized unlike Operation Car Wash. The opposition led parallel investigation blames the governing coalition for the corruption but stopped short of recommending that the Petrobras CEO, Maria das Gracas Silva Foster, be indicted following her repeated testimony before congress.

Petrobras corruption indictments Indictments in February?

If the indictments are made the timing of when that might happen is up in the air with February being the most likely time frame. This is due to both congressional and law enforcement breaks for the holidays and the fact that criminal charges can only be brought against ministers and congresspersons if approved by the Supreme Court. As it happens, the Supreme Court, made up of 11 politically appointed judges, is on break until Feb. 1.

The 903-page final document from Congress will now be sent to Brazil’s attorney general’s office. The document is not yet public but it’s largely believed that the difference in suggested indictments includes a number of politicians hence the delay waiting for the court.

President Dilma Rousseff recently spoke of the scandal that won’t go away from Brasilia urging Brazilians to keep their faith in the state-owned company saying, “We have to punish people, not destroy companies.”