January 15, 2017 / 2:53 PM / 3 years ago

Colombia arrests ex-senator linked to Odebrecht graft scandal

BOGOTA/SAO PAULO, Jan 15 (Reuters) - Colombian authorities have arrested a former senator for allegedly taking $4.6 million in bribes to help Odebrecht SA win a road-building contract, as fallout from a massive corruption scandal continues to bite Latin America’s No. 1 engineering firm.

Otto Bula Bula, a Liberal Party senator until 2002, was tasked by Odebrecht with ensuring a certain number of higher-priced tolls were included in a contract to build the Ocaña-Gamarra highway, Colombia’s Attorney General’s office said late on Saturday.

“For his work, Odebrecht made $4.6 million in payments from Brazil,” the statement said, adding that Bula faces charges for bribery and illicit enrichment.

Bula, who was arrested on Saturday, may also have breached foreign currency exchange rules, the statement said. The contract for Colombia’s Ocaña-Gamarra road was awarded to the company in March 2014.

Reuters could not immediately contact Bula or his lawyers.

Odebrecht’s reputation has been hit after prosecutors in Brazil unearthed a bribes-for-contracts scandal that has extended into other countries, leading the group to sell assets, refinance debt and bid for fewer contracts across the Americas and Africa.

Late last year Odebrecht agreed to a $2 billion leniency deal with prosecutors in Brazil, the United States and Switzerland.

U.S. prosecutors allege that Odebrecht paid hundreds of millions of dollars in bribes in association with projects in 12 countries, including Brazil, Argentina, Colombia, Mexico and Venezuela, between 2002 and 2016.


Last week Colombia arrested Gabriel Garcia Morales, a former director of an institute that managed roadway licensing and later a vice minister of transport, for allegedly receiving $6.5 million in bribes from Odebrecht in 2009.

The impact of the scandal, known in Brazil as “Operation Car Wash,” could drive Odebrecht’s gross revenue down 61 percent over the next five years, Folha de S. Paulo newspaper reported on Sunday, citing unnamed executives.

Odebrecht did not immediately comment on the Colombian arrest or the Folha report.

Before the scandal broke in March 2014, Odebrecht informally targeted gross revenue of 200 billion reais for 2020, said Folha, which did not say how it got that information. The 72-year-old group is also considering a name change, the paper said.

Expectations of a steep decline in revenue may force Odebrecht to speed up efforts to restructure debt-burdened units and revive a shrinking pipeline of construction projects, analysts said. Reuters has reported that Odebrecht is in talks to refinance about 40 billion reais in bank loans.

Prosecutors in the Car Wash probe, which centers on a bribes-for-contracts scheme at state companies, believe Odebrecht benefited the most from the scheme. (Editing by Meredith Mazzilli)

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