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  HOME | Central America

Panama to Ban Odebrecht for New Contracts, Asks to Return the Removed Money

PANAMA CITY – The Panamanian government announced it will prohibit Brazil’s Odebrecht construction company from acquiring new public works contracts until it returns the money it “removed” via a “scheme” of corruption and bribes.

Authorities in Panama, a country where Odebrecht has built important infrastructure, will also ban the firm from bidding on projects in which it is already participating, namely the construction of a fourth bridge over the Panama Canal and Line 3 in the capital metro, Cabinet chief Alvaro Aleman said.

The Panamanian Government will also take the necessary actions to take back Odebrecht’s concession of a hydroelectric project, Chan II (Bocas del Toro, Caribbean), and to abort, at no cost to the State, the contract of association for this work, which has not yet begun.

Through the state-owned Electricity Generation Company (EGESA), Panama signed a contract with Odebrecht in June 2014 to build the Chan II hydroelectric plant with an investment of $1 billion.

Aleman read out a Cabinet resolution explaining that the construction company accepted to have paid $59 million in bribes to Panamanian officials, according to the documents from the U.S. Department of Justice released last week as part of an international investigation on corruption in 11 other countries.

In response to a court settlement of the construction company that pledged to pay fines amounting to about $2 billion to the governments of the U.S., Brazil and Switzerland, the Panamanian government indicated that it seeks to protect the works that the company is currently developing in the country.

Odebrecht is involved in major infrastructure projects such as Metro Line 2, for more than $1.8 billion; the renovation of Colon City, for $537 million, and the expansion of Tocumen airport, for about $800 million, according to official data.

The Panamanian authorities also indicated that they will try to ensure that Odebrecht completes these works satisfactorily at the agreed time and that it “redoubles” efforts so that its overall situation does not affect the work, which generates thousands of jobs in the country.

The Government agreed to support the Public Prosecutor’s Office (MP) in investigating the case so that Odebrecht would accept its responsibility in all acts of corruption and bribery, undertake to compensate the Panamanian State for the damages caused, and extensively collaborate to “prosecute” those responsible.

Panama will maintain its policy restrictive to Odebrecht until this company demonstrates its collaboration in the investigations with the MP and guarantees the payment of the sums that must be returned to the State.

The Brazilian construction company allegedly paid bribes on more than 100 projects in 12 countries in Latin America and Africa, amounting to approximately $788 million, according to U.S. documents.

The MP of Panama, which indicated that it had collaborated with foreign authorities for the revelations made by the U.S., sent a group of prosecutors to the country on Tuesday to search for data on the case, which opened in 2015 after the Lava Jato scandal, involving the company in Brazil.


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