Petrobras expands business with accused of paying bribes to PT

Accused of paying bribes to PT members to close million-dollar contracts with Petrobras in the government of Luiz Inácio Lula da Silva (PT), Etesco Construções e Comércio returned to doing business with the oil company under the management of Jair Bolsonaro (PL). It was prevented by the state’s anti-corruption rules.

Etesco is a ship operating company. It’s a billion dollar market. It also operates in the construction sector.

In July 2021, Petrobras extended for 3 years, without competition, a deal that should have been closed in April 2022.

The extended contract stipulated the operation of a drillship from 2012 to 2022. The new deal should guarantee Etesco around US$ 252 million – the equivalent of R$ 1.26 billion at the current exchange rate (June 2022). The extension of the contract was signed during the administration of General Joaquim Silva e Luna, but had been negotiated during the period in which economist Roberto Castello Branco headed the state-owned company. He was fired in February 2021. Luna took over in April.

The new agreement stipulates the payment of around US$ 230,000 per day for the drillship to prospect for oil – approximately R$ 1.1 million. The original contract called for a payment of $460,000 per day. At the time, the dollar exchange rate was approximately R$1.80, equivalent to just over R$820,000 per day.

To Power 360Petrobras initially said that it had only one collaboration agreement with Etesco and that it would not comment on what the state company calls the GRI (Integrity Risk Degree) as it is confidential information.

The GRI measures the ability of companies to have mechanisms to prevent corruption. There are 3 possibilities, identified by color:

  • blue flag – low risk of corruption;
  • yellow flag – medium risk;
  • Red flag – high risk.

Etesco received a red flag, which means that it could not be hired for new projects. O Power 360 had access to the letter sent by Etesco to Petrobras. The company was asking for a review of its red flag. Faced with the documents, Petrobras confirmed the new contract. He said that the extension of the deal followed the rules of the state-owned company, but did not explain how the high risk of lack of integrity at Etesco was circumvented.

In addition, documents found in the database of Pandora Papers show that the partners of Etesco, upon being the target of investigations of the Lava Jato operation, started a process of change of tax domicile to Paraguay. The objective was to try to keep the patrimony in case they were forced to pay millionaire fines.

You Pandora Papers are a set of documents that supported an investigation conducted by the ICIJ (International Consortium of Investigative Journalists), a non-governmental and non-profit organization formed by reporters from dozens of countries. Journalists work in vehicles such as The Washington Post and BBC. O Power 360 participate in the group.

INDICTMENT

The accusation against Etesco was made by operator Fernando Moura, who was a friend at the time of former minister José Dirceu, of the PT. Both lived in the same condominium, in Vinhedo, in the interior of São Paulo. Moura was detained by Operação Lava Jato in August 2015 on charges of having intermediated the payment of bribes in contracts with Petrobras.

In the whistleblower agreement he made with the Federal Police, Moura said that Etesco paid bribes to Silvio Pereira, then secretary general of the PT, and to the party to appoint the director of Petrobras Services, Renato Duque, in 2002, shortly after the Lula’s 1st presidential election.

Read what Moura said in August 2015 about the growth of Etesco after the alleged agreement to appoint Renato Duque to a Petrobras board:

The declarant [Fernando Moura] is aware that this arrangement between Etesco and Renato Duque allowed Etesco to close several million-dollar contracts with Petrobras; that Etesco even entered into a partnership with OAS and Toyo for the operation of drillships in a deal that also involved Sete Brasil. That Etesco, which was a small/medium-sized company in Butantã, headquartered close to the regional directorate of the Workers’ Party, started to appear as a ‘player’ among the giants of civil construction.

Duque was convicted in 13 cases by the Federal Court, with sentences totaling 103 years in prison. He spent 5 years in prison and is currently under house arrest. At the time, he was willing to pay back $100 million. Recently, the TCU (Union Court of Auditors) condemned the former director of Petrobras to return another R$ 975 million.

In his denunciation, Moura said that he received US$ 10,000 a month from Etesco for having bridged the gap between the company and the PT. It was a sort of success rate for the Duke nomination.

The denunciation, however, was canceled by the then judge Sergio Moro for considering that Moura had lied in a statement. There were two lies, according to the lawsuit.

Moura said, in writing, that at the time of the monthly allowance he went to live in Paris on Dirceu’s recommendation. When asked by Moro about the episode, he declared that he had never left Brazil.

The 2nd contested information is directly related to Etesco. Moura said that the company’s relationship with Duque allowed it to close contracts with Petrobras and made it a “player” among construction giants.

Did I say that?“, asks the whistleblower after remaining silent for a few seconds. Moro responds: “Said“. Moura then states that the prosecutors “must have filled in a little more” of what he had said (listen to the dialogue here from 1min16s onwards). Then he turned back, but it was too late.

Moura was the first Lava Jato whistleblower to have his agreement revoked. He went back to jail. He was sentenced to 16 years and 2 months in prison. By decision of the Federal Supreme Court (STF), he served most of his sentence at home. In March 2022, he was allowed to take off the anklet he had been wearing for 6 years.

Investigations into the company ceased, at least temporarily, at this time.

PANDORA PAPERS

There are two pieces of information about Etesco that appear in the documents of the Pandora Papers:

  • offshore – the company’s partners have an offshore company in the British Virgin Islands, in the Caribbean, with assets of US$ 16 million in their account. The company, called wedgewooddoes not appear in Etesco’s documents in Brazil, as required by law;
  • Paraguayan residence – in 2017, the owners of Etesco became tax domiciled in Paraguay. The 3 partners (Licinio de Oliveira Machado Filho, Sergio Luiz Cabral de Oliveira Machado and Ricardo Antonio Cabral de Oliveira Machado) have always lived in São Paulo. Licinio, for example, lives in Jardim América. But for tax purposes they say they reside in Asunción, Paraguay.

Changes of tax domicile to other countries have at least 2 objectives: it aims to pay less taxes and protect assets in case of any conviction by the Court. The tax change appears in an encrypted form on Etesco’s file with the São Paulo Board of Trade. In November 2017, the partners changed the address from São Paulo to the expression “resident and domiciled abroad“.

Petrobras audited the company, but this type of verification does not identify illegalities because it is impossible to break bank secrecy or request documents in other countries. With the analyzes carried out at Etesco, Petrobras concluded, in 2015, that the company had precarious mechanisms to avoid corrupt practices. Etesco then received a yellow flag. Two years later, in September 2017, Petrobras concluded that the situation was more serious: the company did not pass the corruption prevention test and received a red flag.

Etesco itself acknowledged in a letter (read the full text) sent to Petrobras in 2018 that it had been removed from new business because of the state-owned company’s decision to raise the company’s risk level with such a red flag. Says the message, obtained by the Power 360: “Although the high GRI does not lead to inclusion in a ‘black list’, in practice the effect is basically the same”.

With the red flag, the company is prohibited from participating in bids and entering into contracts. This situation lasted until the middle of 2021, when Petrobras extended the 10-year agreement for another 3 years. The state-owned company did not explain why it bypassed the existing veto.

According to Petrobras, via LAI (Access to Information Law) to the Power 360, 14 companies with high GRI were contracted without bidding by the state-owned company in recent years. Etesco is one of them. The oil company claims secrecy not to say the names of all these companies or the reason they were hired, despite restrictions on compliance.

OTHER SIDE

Etesco was contacted for 1 month by the report of the Power 360 to answer questions regarding this report. He didn’t speak up.

Former Federal Attorney Deltan Dallagnol, who coordinated the Lava Jato task force from 2014 to 2020, was contacted to comment on any flaws in the investigation surrounding Etesco. He said the following by way of a note, referring to himself in the 3rd person: “The former prosecutor does not recall this specific case and does not know the confidentiality status of any investigations”. Dallagnol said that only prosecutors who continued investigations could comment.

The Federal Public Ministry in Paraná said that “there are investigations and actions in progress, most remain confidential”.

The MME (Ministry of Mines and Energy) was contacted, but did not respond and asked that Petrobras be contacted.


This report is part of the Pandora Papers series, by the ICIJ (International Consortium of Investigative Journalists). 615 journalists from 149 outlets in 117 countries participated in the investigation.

In Brazil, journalists from the Power 360 (Fernando Rodrigues, Mario Cesar Carvalho, Guilherme Waltenberg, Tiago Mali and Bruno Kono); from the magazine Piauí (José Roberto Toledo, Ana Clara Costa, Fernanda da Escóssia and Allan de Abreu); gives Public Agency (Anna Beatriz Anjos, Alice Maciel, Yolanda Pires, Raphaela Ribeiro, Ethel Rudnitzki and Natalia Viana); and the website metropolises (Guilherme Amado and Lucas Marchesini).

About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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