The Inter-American Development Bank (IDB) announced Wednesday the six-year debarment of more than 20 subsidiaries of Odebrecht S.A. for bribing public officials in connection with two IDB-financed projects.
The IDB said the debarred Odebrecht units are CNO S.A. and Odebrecht Engenharia e Construção S.A., as well as 19 CNO subsidiaries.
CNO branches in Africa weren’t debarred.
Between 2007 and 2015, Odebrecht companies paid $118 million in bribes on two IDB-funded projects, “utilizing a complex network of agents and offshore financial payment schemes.”
The projects were the Highway Rehabilitation Program in São Paulo, Brazil and the Tocoma Hydroelectric Power Plant Program in Venezuela.
The bribes amounted to about six percent of the value of Odebrecht’s contracts under the projects.
In reaching the negotiated settlement, Brazil-based Odebrecht didn’t contest the IDB’s evidence.
The company also agreed to make a total contribution of $50 million directly to NGOs and charities managing social projects in “the IDB’s developing member countries.”
Odebrecht’s contributions will start in 2024, the IDB said.
The Washington, DC-based IDB is the biggest development finance lender in Latin America and the Caribbean. It has 48 member countries, including 26 borrowers.
In late 2016, Odebrecht agreed to pay criminal penalties of at least $2.6 billion for a global corruption settlement with authorities in the United States, Brazil, and Switzerland.
Odebrecht was supposed to pay ten percent of the penalties to the United States to resolve FCPA violations. But within months of the global settlement, Odebrecht lost big contracts it had for construction projects with the governments of Peru, Colombia, and Panama. In April 2017 the DOJ agreed to reduce the U.S. share of the global penalties from $260 million to $93 million because of Odebrecht’s inability to pay.
The company filed for bankruptcy protection in New York a week ago. It has debt of about $25 billion.
The IDB said the settlement Wednesday recognized “Odebrecht’s continued cooperation, including internal investigations that are intended to uncover systemic integrity risks to IDB Group-financed activities.”
Odebrecht will report on its compliance program through an independent monitor, the IDB said.
The debarments qualify for cross-debarment by the World Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, and the African Development Bank.
A list of all Inter-American Development Bank debarred entities and individuals is here.