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Brazilian tycoon freed to begin ‘luxury’ house arrest

Heuler Andrey, AFP | Brazil's construction giant Odebrecht president Marcelo Odebrecht gestures during a hearing of the parliamentary committee of the Petrobras investigation in the Federal Justice court, in Curitiba on September 1st, 2015.
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Marcelo Odebrecht, the construction tycoon at the center of Brazil's biggest ever corruption scandal, was released from prison Tuesday to begin house arrest in his luxury Sao Paulo home.


Odebrecht, 49, left the prison in the southern city of Curitiba after serving two and a half years behind bars.

He was fitted with a monitoring ankle bracelet before taking a chartered business plane to the country's biggest metropolis. On arrival, he entered his heavily guarded gated community in a car with darkened windows, AFP reporters at the scene said.

The former CEO of Latin America's most powerful construction company still has seven and a half years to serve of his sentence for organizing the systemic bribery of politicians to gain influence and contracts for Odebrecht in Brazil and across the region.

The so-called "Car Wash" scandal around the family-owned firm Odebrecht S.A. has put huge pressure on President Michel Temer after many of his allies came under investigation.

"Car Wash" is also causing political havoc abroad.

Peruvian President Pedro Pablo Kuczynski faces possible impeachment this week over allegations that he took bribes from the company, and Ecuador's vice president was sentenced to six years in prison last week for taking kickbacks.

Building everything from the Miami Heat basketball arena to a hydroelectric dam in Angola, Odebrecht S.A. has long been one of Brazil's economic giants. At the peak of his career at the company founded by his grandfather, Marcelo Odebrecht was one of the most influential people in the country.

Swimming pool

But in 2015 he was arrested and later convicted for his central role in the embezzlement and bribery scandal uncovered by the "Car Wash" probe that two-and-a-half years later continues to shake Brazil's elite.

Originally sentenced to 19 years in prison, Odebrecht struck a plea bargain with prosecutors, agreeing to testify in exchange for a reduced sentence.

Under the deal, 77 Odebrecht S.A. executives, including Marcelo Odebrecht, pulled back the curtains on their corruption scheme, which was so extensive that it required its own dedicated corporate department to manage the bribes.

The company also ended up agreeing to pay $2.6 billion in fines to the Brazilian, Swiss and US governments.

Fallout from the scandal continued even as Odebrecht was being released Tuesday. Authorities revealed that documents surrendered by the firm show it formed a cartel to control the market for highway construction in Sao Paulo between 2008 and 2015.

A similar scheme involving Odebrecht S.A. was alleged Monday in the construction of metro train lines in eight Brazilian states.

For the next two and a half years, Odebrecht will be strictly bound to his home, receiving only family and a small number of other visitors. Restrictions will be eased during the second half of his sentence.

According to local media, Odebrecht's house is a 32,292 square feet (3,000 square meters) property within one of Sao Paulo's most exclusive condominiums. It has a large swimming pool.

"The disgraced businessman is focused on "returning to family life and fulfilling his collaboration" with the authorities, his lawyer Nabor Bulhoes was quoted as saying by Folha newspaper.

Family firm in turmoil

But while the courts have finished with Odebrecht for now, a feud with his father and other members of the powerful family looms, raising questions over the future of the man once known as "the prince" and of the giant company that once embodied Brazil's rise.

While the firm was heavily involved in graft, Odebrecht is accused of ramping up the practice to industrial levels upon taking over as CEO in 2008. When investigators closed in, he defiantly tried to prevent a plea bargain.

However, his father Emilio, 72, spearheaded negotiations with prosecutors, according to Globo and other local media.

Odebrecht S.A. is now going through a profound makeover and on the eve of Marcelo's release, his father announced the latest reforms: he is resigning as chairman of the board and from now on family members will not be able to serve as CEO.

"Car Wash" was named because the graft probe began with a seemingly run-of-the-mill money laundering investigation linked to a service station in the capital Brasilia.

That probe led prosecutors and police to an incredible web of money laundering, bribery and embezzlement involving much of the country's political and economic elite.


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