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News > Latin America

Brazil Police Arrest Businessmen Linked to Petrobras Scandal

  • Two more businessmen were arrested in connection to a probe of the Petrobas oil company

    Two more businessmen were arrested in connection to a probe of the Petrobas oil company | Photo: Reuters

Published 28 March 2015

Nearly 100 people have been indicted in a probe into corruption at the state-owned Petrobras oil company.

Brazilian police on Friday arrested two businesspeople in connection to corruption probe focused on state-owned oil firm Petroleo Brasileiro SA (Petrobras).

Dario Galvao, chief executive of a construction group, and Guilherme Esteves, a lobbyist who is being investigated for funneling bribe money, were taken to federal police headquarters in the southern city of Curitiba, a court spokesperson said.

Federal judge Sergio Moro ordered the arrests after a request by investigators looking into the Petrobas scandal. Investigators said they were led to Galvao by Shinko Nakandakari, an import figure implicated in the scandal who has been cooperating with the investigation.

Judge Moro called Galvao the mastermind of his company's criminal activity and said he posed a risk of committing more crimes.

“There is evidence of crimes for extended periods, starting at least from 2008 to 2014,” Moro wrote in a court decision.

Moro said that a search of Esteves' home “revealed evidence of corruption crimes and money laundering, with the use of secret accounts abroad by Guilherme Esteves de Jesus to make bribe payments... to leaders of Petrobras and (oil rig maker) SeteBrazil.”

In a statement, Grupo Galvao said Galvao's arrest was "without legal grounding" and he had "not committed any crime." It also said that Galvao Engenharia, its building subsidiary which filed for bankruptcy this week, rejects vehemently any accusations of being part of a corrupt cartel.

Esteves was not available for comment.

Two dozen of Brazil's biggest engineering firms are being investigated for overcharging on Petrobras contracts and using the excess to bribe executives, politicians and political parties.

Galvao Engenharia was one of 23 companies blacklisted by Petrobras in December, with the oil company cutting off payments and banning the firms from bidding on future contracts.

The scandal has caused reverberations throughout Brazil's political establishment. The opposition in Brazil has attempted to use the scandal to topple President Dilma Rousseff's government but there is no evidence linking her to it.

President Rousseff has promised to root out corruption in Petrobas and make the necessary changes. Rousseff replaced the head of the oil company in February.

Nearly 100 people have been indicted in the probe, and prosecutors say more criminal charges will be presented. About 20 executives and money changers are in state and federal jails in Curitiba, including the head of Galvao Engenharia, Erton Fonseca.

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