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Lack of Consensus Postpones Deal with Construction Firm Odebrecht

11/25/2016 - 06h50

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BELA MEGALE
FROM BRASÍLIA
MARIO CESAR CARVALHO
FROM SÃO PAULO

Much to the frustration of Odebrecht's lawyers and prosecutors, the plea bargain deal involving 77 of the firm's executives will most likely only be reached next week.

The lack of a consensus between Brazilian authorities and prosecutors at the US Department of Justice regarding how much money the DOJ should get out of the fine Odebrecht will pay is the remaining loose end.

According to the terms of the current leniency agreement, Odebrecht will have to pay Brazil, the United States and Switzerland an amount that could vary between R$ 6 billion (US$ 1.75 billion) and R$ 7 billion (US$ 2.05 billion) which would be paid over the course of the next 20 years.

More than half of the total amount would go to Brazil, while the United States and Switzerland would each get a smaller cut.

American and Swiss authorities helped in the investigations into crimes practiced by Odebrecht since some of these crimes were also practiced in these countries.

The Department of Justice wants another US$ 50 million on top of its current offer. There are also issues concerning Odebrecht's payment timetable with American authorities.

The construction firm earned R$ 132 billion (US$ 39 billion) last year, but its net debt totals R$ 76.3 billion (US$ 22.5 billion). The firm has had a hard time securing bank loans due to the ongoing Lava Jato investigation.

A leniency agreement is a sort of plea bargain for corporate persons.

Without one, Odebrecht could not be hired by public authorities since it would be declared a disreputable company by the Brazilian government, and it would also have an even harder time securing bank loans.

Translated by THOMAS MATHEWSON

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