The Odebrecht global corruption enforcement action literally shook worldwide anti-corruption enforcement with its breadth, depth, and scope. The range of penalties from between $4.5bn to $2.6bn was one for the record books. The split of the fines and penalties between three countries: with 10 percent going to both the United States and Switzerland and the lion’s share of 80 percent going to Brazil was also unprecedented. Yet even with these shocks, the resulting tremors from the investigation and enforcement action may well continue for many years, most particularly in Latin America.
One of the continued aftershocks will be in the Latin American construction and infrastructure realm. A recent article considered some of the effects in Latin America. One view espoused by José Ugaz, a former Peruvian prosecutor and chairman of Transparency International, is that the Odebrecht revelations “represent the tip of a broader scheme.” Another reaction was announced by the government of Colombia, which announced it would void any contracts procured with it by Odebrecht through bribery and corruption. Conversely, but perhaps not surprisingly, the government of Venezuela which has remained largely silent, in the face of allegations of nearly $100MM in bribes paid to its government officials.
The bottom line is that the dazzling latitude of Odebrecht’s functional bribery department has tainted construction projects in nearly every country in the region. Do not forget that Odebrecht USA is a major player in U.S. infrastructure projects as well. In order to recoup monies spent as bribes it would not be too surprising if Odebrecht required kickbacks from its downstream suppliers and contractors. If your company did business directly with Odebrecht or even was a sub-contractor on a project where Odebrecht was the prime contractor, The Man From FCPA suggests that now is the time to perform a thorough internal investigation to determine if there are any red flags present indicating suspicious payments.