RIO DE JANEIRO—Federal prosecutors in Brazil will file charges
Friday against the chief executive of construction giant Odebrecht
SA and several other construction-industry executives as part of an
investigation into corruption at state-run oil firm Petró leo
Brasileiro SA, according to a person familiar with the case.
The expected charges would represent a significant setback for
Latin America's biggest construction firm and one of Brazil's most
important companies.
Chief Executive Marcelo Odebrecht, along with the chief
executive of Brazilian construction conglomerate Andrade Gutierrez
and other executives from both firms, were arrested last month
under suspicion of money laundering and corruption. The executives
have since been held in the southern city of Curitiba, to the
strong objections of both firms' lawyers. None of the executives
been charged with a crime.
Since their arrests, prosecutors have gathered more evidence of
their alleged involvement in the scheme, which will be made public
Friday afternoon, the person said. The chief executive of Andrade
Gutierrez, Otá vio Azevedo, is also expected to be charged, the
person said.
Both Odebrecht and Andrade Gutierrez have denied the allegations
made against their executives. Odebrecht has called the arrest of
its chief executive unnecessary because it was cooperating with
authorities. A spokeswoman for Odebrecht wasn't immediately
available to comment Friday. Andrade Gutierrez on Friday again
denied involvement with the alleged corruption scheme.
At the time of the arrests, federal prosecutors said that
Odebrecht and Andrade Gutierrez "headed the cartel scheme within
Petrobras."
Prosecutors allege that several of Brazil's biggest construction
companies formed a cartel to drive up prices of Petrobras contracts
and kick back some of the money to Brazilian politicians, political
parties and executives at the oil firm. Some have admitted
wrongdoing in exchange for lesser punishment, prosecutors say,
while others have denied involvement and await trial.
The investigation into alleged corruption at Petrobras has
expanded outside Brazil since the case was first uncovered last
year. The U.S. Securities and Exchange Commission and the Justice
Department are both investigating Petrobras, whose shares are
traded in New York.
On Wednesday, authorities in Switzerland said they were
investigating units of Odebrecht in connection with the
allegations, and believe Odebrecht units paid bribes from accounts
in Switzerland to separate Swiss bank accounts held by former
Petrobras directors. Swiss authorities didn't name specific
Odebrecht operating units or the Swiss banks involved.
Petrobras has said it was a victim and is cooperating with
authorities.
Write to Luciana Magalhaes at Luciana.Magalhaes@dowjones.com and
Will Connors at william.connors@wsj.com
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