Brazil prosecutors present charges against Odebrecht CEO

By Sergio Spagnuolo CURITIBA, Brazil (Reuters) - Brazilian prosecutors, declaring war on what they called a culture of impunity, presented charges on Friday against the CEO of Latin America's largest engineering firm as part of a landmark investigation of a kickback and bribery scandal. Marcelo Odebrecht, the third-generation chief executive of the family-run Brazilian conglomerate Odebrecht SA, was charged with corruption, money laundering and criminal conspiracy. "Today we take yet another important step in combating impunity," prosecutor Deltan Dallagnol said at a news conference. "We at the public ministry have a dream that all Brazilians are treated equal by the law." Prosecutors said there was no way Marcelo Odebrecht could have been unaware that his firm participated in what they call a cartel of engineering firms overcharging state-run oil firm Petrobras and bribing executives and politicians, many of whom are in President Dilma Rousseff's coalition. They are seeking 6.7 billion reais ($2 billion) in damages from Odebrecht, Dallagnol said, adding that Odebrecht SA laundered more than 1 billion reais between 2006 and 2014. The company reported 107.7 billion reais in revenues in 2014. He said 870 million reais have been recovered so far in Brazil's largest-ever corruption investigation. Top executives of Brazil's second-largest engineering firm, Andrade Gutierrez, including its CEO, were also among the 22 people charged. They will stand trial if the judge overseeing the case accepts the charges. Odebrecht is accused of paying bribes for contracts including a deal for Petrobras to supply naphtha to Braskem SA at favorable rates that eventually caused 6 billion reais of losses. Braskem, Latin America's biggest petrochemical company, is a joint venture between on Petroleo Brasileiro SA, as Petrobras is formally known, and Odebrecht, which holds a controlling stake. Braskem said in a statement the 6 billion reais losses didn't make any sense and it had not gotten an unfair advantage on the naphtha contract. Andrade Gutierrez said its lawyers were analyzing the charges but that unfortunately prosecutors seemed to have ignored its explanations. Guilherme Carnelos, a lawyer for Odebrecht SA, said at a news conference in Sao Paulo that the charges were based on assumptions with serious material errors . HIGHER STAKES AND SWISS ACCOUNTS Marcelo Odebrecht's personal ties to former Brazilian President Luiz Inácio Lula da Silva threaten to bring the scandal closer to the ruling Workers' Party, whose treasurer is in jail and standing trial for corruption. Prosecutors have also opened a separate inquiry into whether Lula improperly used his connections to benefit Odebrecht after leaving office. Rousseff is not under investigation, but her approval rating sank to 7.7 percent, a poll showed this week, while 62.8 percent want her impeached over corruption at Petrobras, which she chaired before becoming president in 2011. Federal judge Sergio Moro issued a second preventive detention order for Marcelo Odebrecht and four other Odebrecht executives on Friday, citing new evidence that he said would make releasing them a risk to public order. Odebrecht lawyers said on Friday Moro was "a judge with a cause" and "out of line." Cooperation with Swiss authorities had resulted in "material proof," Moro wrote, of deposits from accounts controlled by Odebrecht SA to all five former Petrobras executives implicated in the investigation. Moro also cited evidence that Odebrecht executives had tried to hamper the investigation, a complaint later echoed by prosecutors. Earlier this week, police released messages found on Marcelo Odebrecht's cell phone with instructions to "sanitize paraphernalia MF and RA." Moro said the initials apparently suggest Odebrecht was directing two of his subordinates, Marcio Faria and Rogerio Araujo, to destroy evidence. More alarming, he said, was another message: "Work to stop/annul (PF dissidents)." PF are the commonly used initials for federal police. (Additional reporting by Brad Haynes, Asher Levine, Alberto Alerigi and Aluisio Alves in Sao Paulo; Writing by Caroline Stauffer; Editing by Leslie Adler and Christian Plumb)