December 18, 2018 / 6:15 PM / in a month

Brazil's Andrade Gutierrez to pay $381 million fine to settle graft charges

BRASILIA (Reuters) - Andrade Gutierrez Engenharia, a construction company, has signed a 1.49 billion reais ($381.49 million) deal to settle corruption allegations against it, federal authorities said on Tuesday, as part of the so-called “Car Wash” graft investigation.

Andrade Gutierrez is one of more than 30 construction companies being investigated in the sprawling probe which has ensnared senior executives and high-ranking politicians in Latin America’s largest economy.

The deal is contingent on the firm’s cooperation in the investigations. Andrade Gutierrez has agreed to testify about wrongdoing involving at least 100 other companies and 250 people, with investigations to be opened against all those implicated, Solicitor General Grace Mendonca told a news briefing.

The company will make the payment as part of a deal to end certain legal processes it faces in exchange for cooperation in investigations, the solicitor general’s office said. The total settlement could reach 3.6 billion reais ($923.2 million) over the 16 years it is to be paid, when adjusted for interest and inflation, the office said in a statement.

Brazilian authorities had previously wanted the construction companies under investigation to pay some 34 billion reais ($8.72 billion) in fines for alleged transgressions, but the penalties have been reduced for the firms that agreed to deals.

Andrade Gutierrez’s settlement will be directed to firms damaged in the alleged scheme to fix government contracts, including to state-run oil company Petroleo Brasileiro SA (PETR4.SA), known as Petrobras, the solicitor’s office said.

Andrade Gutierrez is part of a larger unlisted Brazilian conglomerate that owns a stake in companies including toll road operator CCR (CCRO3.SA). CCR last November agreed to pay a fine of 81.5 million reais for irregular financing of political campaigns.

Andrade Gutierrez has a stake in the San Antonio hydroelectric plant in the Brazilian state of Rondonia.

The most prominent construction company to emerge tarred by the Car Wash probe is Odebrecht SA [ODBES.UL], which admitted to paying millions of dollars in bribes to authorities in Brazil and throughout Latin America.

Reporting by Lissandra Paraguassu and Alberto Alerigi Jr; editing by Jeffrey Benkoe and G Crosse

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