Brazil’s Petrobras corruption investigators to probe Olympic contracts

SAO PAULO, (Reuters) – Brazilian police investigating corruption around state-run oil firm Petrobras also plan to probe more than $10 billion of construction contracts for the 2016 Olympic Games in Rio de Janeiro, a lead investigator said.

Some of the big engineering firms caught up in the Petrobras probe “very probably” broke laws against price-fixing and bribery on contracts to build Olympic venues, said Igor Romario, a Federal Police chief and key figure in the investigation.

“In every situation where there has been an investigation into contracts with these companies, this model of corruption was repeated,” Romario told Reuters in a telephone interview. “It’s possible that it was repeated in the projects for the 2016 Olympics.”

So far, Romario said, there is no evidence proving any crimes around Olympic bidding and investigators are still focused on the original probe – a deep inquiry into price-fixing on Petroleo Brasileiro SA contracts and bribes for company executives and politicians in exchange for winning bids.

The probe, now nearly two years old, has already ensnared dozens of Brazil’s business elite and congressmen and could put pressure on a tight Olympic construction schedule.

Of about two dozen companies investigated by the comptroller general’s office, known as the CGU, just five are building most of the nearly 40 billion reais ($10.5 billion) worth of venues and infrastructure needed for the Olympics in Rio.

Privately held Odebrecht SA, Latin America’s largest engineering firm, is involved in over half of all Olympic projects by value, according to contracts reviewed by Reuters.

Marcelo Odebrecht, the company’s chief executive, has been jailed since June awaiting trial for corruption in the Petrobras case.

The other four companies involved in much of the rest of the Olympic work are OAS SA, Andrade Gutierrez SA, Queiroz Galvao SA, and Carioca Christiani Nielsen Engenharia SA.

OAS’s chief executive was convicted of corruption and sentenced to more than 16 years in prison in August because of the Petrobras probe. Andrade Gutierrez and Queiroz Galvao executives have been jailed to face corruption charges.

Odebrecht and Andrade Gutierrez declined to comment. The other companies did not respond to request for comment.

Pulling off a safe and scandal-free games is important to Brazil, which has lost global influence over the past five years as an economic boom gave way to what is now its worst recession in three decades.

Rio de Janeiro’s mayor, Eduardo Paes, a possible 2018 presidential candidate, says Brazil can boost its reputation with a successful Olympics.

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