Petrobras managers face bribery charges

Brazilian federal police July 10 arrested 13 people on charges of corruption in the country's state-owned Petrobras.

Eric Watkins
Senior Correspondent

LOS ANGELES, July 12 -- Brazilian federal police July 10 arrested 13 people on charges of corruption in the country's state-owned Petroleo Brasileiro SA (Petrobras). The arrests follow recent calls for greater accountability by the firm's chief executive officer.

The corruption scheme reportedly involved Petrobras managers who, in exchange for bribes, allegedly gave privileged information to private firms, enabling them to win public tenders to operate in partnership with the state firm.

Brazilian police named three companies—Angraporto, Mauá Jurong, and Iesa—as involved in the scheme but said that many other private companies and nongovernmental organizations also may be involved.

According to the police, the scheme cost Petrobras at least $120 million reals ($64 million) in the past year.

On July 5, Petrobras Chief Executive Jose Sergio Gabrielli said he supported a shift toward closer monitoring of companies' commitments under the United Nations' 7-year-old Global Compact, saying his own firm would benefit from stricter rules on corruption.

About 3,000 companies from 116 countries are members of the Global Compact, which requires firms to follow 10 principles, including pledges to work against corruption, extortion, and bribery.

The July 10 arrests coincided with publication of the World Bank's annual global report on governance and anticorruption, which showed that Brazil's corruption control index fell to its lowest level in 10 years, to 47.1 in 2006 from 59.1 in 2000.

The index rates countries on corruption control in a scale from 1-100 where 1 is the worst score and 100 the best.

Contact Eric Watkins at hippalus@yahoo.com.

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