BRAZIL-PETROBRAS/ELETROBRAS Brazil police arrests two as Petrobras probe hits Eletrobras

Record ID: 145987

  • Title: BRAZIL-PETROBRAS/ELETROBRAS Brazil police arrests two as Petrobras probe hits Eletrobras
  • Date: 28th July 2015
  • Summary: ANGRA DOS REIS, RIO DE JANEIRO STATE, BRAZIL (FILE - 2013) (REUTERS) VARIOUS MORE OF CONSTRUCTION OF THE ANGRA III NUCLEAR REACTOR WHICH IS ADMINISTERED MY ELETROBRAS
  • Embargoed: 12th August 2015 13:00
  • Keywords:
  • Topics: General
  • Reuters ID: LVA2BDV33XRBI1XA0I3735F5IV4Q
  • Aspect Ratio: 16:9
  • Story Text: Brazilian police on Tuesday (July 28) arrested two people involved in building a nuclear power plant for Brazil's Eletrobras, pulling the state-led utility holding company into a giant corruption scandal surrounding state-run oil company Petrobras.
    The arrests come as Brazil's Federal Police and federal prosecutors follow allegations that a price-fixing, bribery and political kickback scheme they discovered at Petroleo Brasileiro SA, as Petrobras is formally known, extends to other state-led companies, including Eletrobras.
    A Brazilian prosecutor on Tuesday cited evidence that Othon Luiz Pinheiro da Silva, currently on leave from the post of chief executive of state-led utility Eletrobras' nuclear power unit, received 4.5 million reais ($1.2 million) in bribes from engineering firms Andrade Gutierrez and Engevix.
    Prosecutor Athayde Ribeiro Costa said police had arrested Pinheiro and Andrade Gutierrez executive Flavio Barra on Tuesday morning.
    The arrests are part of an investigation into nuclear reactor Angra 3, officially moving a giant corruption probe beyond state-run oil firm Petrobras.
    Tuesday's police action focused on Eletrobras' Eletronuclear division, which is building a third nuclear-power at Angra dos Reis, Brazil about 100 kilometers (62 miles) west of Rio de Janeiro.
    Eletrobras, which is formally known as Centrais Eletricas Brasileiras SA, declined to comment.
    Federal police confirmed the action and arrests at a late morning press conference to announce "Operation Radioactivity", the latest round of arrests and seizures in Brazil's Lava Jato or "Car Wash" corruption probe that began in April 2014.
    Besides the arrests, the operation involved the execution of 23 search and seizure warrants in Brazil's largest cities.
    "The warrants were directed to the offices of executives who were involved, or who were supposedly involved. And their objective (of the warrants) was also to extract e-mails from the e-mail accounts of these executives," federal prosecutor Athayde Ribeiro Costa said.
    The detainees will be taken to Curitiba, the capital of Brazil's southern Parana state, where the federal judge leading the case, Sergio Moro, is based.
    "The judge of the 13th (federal criminal) court (Sergio Moro) understood it was the moment to decree preventative prison. And in accordance with the evidence found in the searches, afterward, if necessary, we can ask for preventative prison measures," Costa added.
    The expanding probe has put some of Brazil's most powerful engineering executives behind bars and implicated more than two dozen lawmakers, mostly from President Dilma Rousseff's ruling coalition.
    Allegations of bribery are the latest woes to hit the Angra 3 plant, a third reactor under construction at the country's only nuclear power facility.
    Angra 3 was shelved more than two decades ago as Brazil entered a debt and inflation crisis that stalled infrastructure spending, but the government of Luiz Inacio Lula da Silva revived the project in the early 2000s. It has faced repeated delays and rumours of cost overruns.
    The investigation into Eletronuclear involves the same local engineering firms already being investigated for forming a cartel to overcharge Petrobras, a police statement said.
    A prosecutor and federal police agent told Reuters last month they had evidence the scheme to overcharge Petrobras for work and pass on the excess as bribes to executives and politicians probably operated at Eletrobras as well.
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