December 12, 2017 / 5:46 PM / 2 years ago

Mexico government bans Odebrecht unit from public contracts for four years

MEXICO CITY (Reuters) - The Mexican government has banned an affiliate of construction company Odebrecht from bidding for federal public contracts for four years, in an investigation stemming from the bribery scandal that has engulfed the Brazil-based builder.

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

The Public Administration Ministry (SFP) said in a statement late on Monday that it had sanctioned Constructora Norberto Odebrecht for an “incorrect charge” of 119 million pesos ($6.20 million) under a contract with state oil company Pemex at the Miguel Hidalgo refinery in central Mexico.

The SFP said that the action was a result of one of eight administrative investigations it had opened in the case, four against the company and its affiliates, two against its legal representatives and two against public servants working for Pemex.

The probes were opened after Odebrecht in December 2016 pleaded guilty in a New York court to conspiring to violate the U.S. foreign bribery law after an investigation involving political kickbacks at Brazil’s Petrobras unearthed the bribery scheme.

The Brazilian firm is at the center of one of the largest corruption scandals in Latin America, and has admitted paying bribes from Peru to Panama. Ecuador jailed its vice president over the scandal and the company has paid $3.5 billion in settlements in the United States, Brazil and Switzerland.

Odebrecht admitted to U.S. and Brazilian prosecutors that it paid $10.5 million in bribes in Mexico, but details have not been made public.

Brazil’s O Globo newspaper in August published an article saying that Emilio Lozoya, the former head of Pemex, was involved in shifting cash to President Enrique Pena Nieto’s presidential campaign.

Lozoya was called before the attorney general’s office after the report.

Mexican investigative journalism site Quinto Elemento has published videos showing former Odebrecht officials describing payments made through Lozoya in exchange for contracts.

Lozoya denies any wrongdoing and the president’s office denied any cash was funneled into the campaign from Odebrecht, calling the accusations “absurd, irresponsible and in bad faith.”

($1 = 19.1926 Mexican pesos)

Reporting by Veronica Gomez and Christine Murray, editing by G Crosse

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