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CANADIANLAWYERMAG.COM/INHOUSE MARCH 2016
BY STEFAN DUBOWSKI
elcome to Brazil. The weather's beautiful.
People are friendly. Business is corrupt.
Corrupt?
Sure. At least, that's the gist of ongoing
media coverage out of the South American
nation: bribery, kickbacks, and price-fi xing
among the country's corporations, governments,
and political parties.
But that's not the full story. In fact, many say it's far from
accurate.
Yes, Brazil has uncovered corruption involving large state-
run businesses and high-ranking politicians. But legal experts
say the country is poised to tackle corruption with sharp new
legislation and detailed regulations.
And they're not just for locals. The anticorruption measures
apply to any and all businesses in the country, including
Canadian organizations with Brazilian operations.
CORRUPTION SCRUB
Operation Car Wash: That's where this situation begins. It has
little to do with tri-colour detergent and a spot-free rinse. It's
an investigation by a Brazilian police agency into corruption —
a case of fraud that led all the way into the executive offi ces of
Petrobras, Brazil's country-owned oil company and one of the
nation's largest enterprises.
Police kicked off Car Wash in 2014, chasing a crime ring
that used a currency exchange service at a gas station to launder
money. Agents soon linked the criminals to a former Petrobras
director. Then police discovered that a number of companies
that had won construction contracts for a Petrobras oil refi nery
had bribed Petrobras offi cials. As the situation unfolded, offi cers
investigated nine construction fi rms, arrested 57 people — in-
cluding federal politicians accused of taking money and facili-
tating the fraud — and charged 46. An estimated R$2.1 billion
had allegedly been misappropriated.
The fallout has been wide. Last April, Petrobras said the
value of its assets was some R$17 billion lower than stated due
to graft. This, at a time of sinking oil prices, set the fi rm back
a step or four. By January 2016, the company had slashed its
growth projections, greatly contributing to the trend of rising
MATTHEW
BILLINGTON
