Argentina bans Brazil's Odebrecht from new projects for 12 months

BUENOS AIRES (Reuters) - Argentina has banned scandal-racked Brazilian builder Odebrecht SA from bidding on public works projects for 12 months, a government spokesman said on Monday, citing corruption cases facing the company in South America and elsewhere.

The corporate logo of Odebrecht is seen inside of one of its offices in Mexico City, Mexico May 4, 2017. REUTERS/Carlos Jasso

The move could cut Odebrecht out of a series of government-financed infrastructure jobs scheduled in Argentina as the country heads into a key mid-term election in October.

Odebrecht, which admitted in a settlement with U.S. and Brazilian prosecutors to paying bribes across 12 countries to win contracts, including $35 million in Argentina, can continue to operate current projects, the spokesman for the Interior Ministry said in a telephone interview.

“For one year they are prohibited from taking out the certificate used to bid on public works,” the spokesman said, adding that a resolution would be published in the official Gazette confirming the measure in the next few days.

Odebrecht said in a statement it had not been formally informed of the decision. “When officially informed, the company will evaluate the situation and see to it that its rights are preserved,” the statement said.

It said Odebrecht already has adopted “the necessary measures to ensure its business actions are ethical, have integrity and are transparent.”

The resolution is expected to cite “strong indications that the company has been involved in corrupt practices,” the ministry spokesman said.

The measure could leave Odebrecht out of a spate of public works projects on tap in Argentina as President Mauricio Macri’s coalition aims to boost economic growth with new infrastructure ahead of the October congressional election.

Since settling in the United States, Brazil and Switzerland for a record $3.5 billion, Odebrecht has sought to negotiate leniency deals that would allow it to keep operating in other countries across Latin America.

It also is banned by law from participating in new infrastructure auctions in Peru and is trying to negotiate leniency deals in Colombia, Ecuador, Mexico, Panama, the Dominican Republic and Venezuela.

Argentine prosecutors investigating Odebrecht have said the country lacks a legal mechanism for companies to reach a leniency agreement like the one signed in Brazil.

Macri’s administration supports a bill that would allow companies to be punished for corruption and also enable them to sign leniency agreements.

Reporting by Maximiliano Rizzi; Additional reporting by Caroline Stauffer; Writing by Hugh Bronstein; Editing by Leslie Adler and Bill Trott