MercoPress. South Atlantic News Agency

Petrobras case revealing the extent of corruption in Brazil's political system

”You can’t even put a brick on the ground if you don’t reach some kind of agreement (with politicians),” said defense attorney Mário Oliveira Filho

The lawyer of the Brazilian lobbyist Fernando Baiano, who was finally arrested in an ongoing investigation into corruption at state oil company Petrobras, has said that “no public work is done in Brazil without a bribe” and that the people who deny allegation of corruption “ignore the country’s history.”

 Baiano’s capture had been ordered last Friday, along with that of 23 other people, but he remained a fugitive until Wednesday, when he gave himself in at the headquarters of the Federal Police in Curitiba.

“If businessmen are agreeing to pay politicians it’s because if they don’t, they don’t get work. You can’t even put a brick on the ground if you don’t reach some kind of agreement (with politicians),” said Mário Oliveira Filho, in charge of Baiano’s defense.

The lawyer also said that the 24 people detained in Operation Car Wash — a kickbacks scheme that siphoned millions off Petrobras — “are victims of the country’s political culture.”

Despite his statements, Oliveira Filho denied that his client had acted as an intermediary in the kickbacks scheme described to police by former Petrobras director Paulo Roberto Costa and money launderer Alberto Yousseff, who entered a plea deal with authorities.

“He’s being used as a scapegoat. He is a businessman who discovers an infrastructure problem and searches for a solution, looks for the company that can provide a solution, and receives a percentage of the operation which is absolutely legitimate,” he said.

Both Costa and Yousseff said Baiano worked as an operator for the PMDB, currently part of the ruling coalition. “They say he is linked to the PMDB but I asked him and he says he doesn’t know Renan Calheiros and that he has no links to the party,” the lawyer said, according to local media.

Of the 24 people detained in the case, 11 were released by Judge Sérgio Moro on Wednesday.

Federal court press officer Christianne Machiavelli said the judge ordered the release of those people he doesn’t think will jeopardize the investigation. Among those freed are several construction company executives who allegedly bribed Petrobras officials to win contracts, including UTC’s financial director Walmir Pinheiro Santana and Iesa’s president Valdir Lima Carreiro.

The remaining 13 people arrested last week were not allowed to leave prison because they were deemed capable of jeopardizing the investigation, Machiavelli said, without providing further details. The president of construction company OAS, José Aldemário Pinheiro Filho, is among those still in detention.

Federal police said that current Petrobras director José Carlos Cosenza had been “erroneously” named in the probe but that neither Costa nor Yousseff had signaled him as involved in the corruption scheme.

Authorities have alleged that top Petrobras executives operated a kickbacks scheme on contracts involving several billion dollars, with the money eventually being fed back to the governing Workers’ Party and other top parties for political campaigns.

Petrobras is Brazil’s biggest company and is in charge of tapping big offshore oil fields and creating wealth that leaders hope will propel the country to developed world status.

Many of the allegations centre on what police have heard from Alberto Youssef, a convicted black-market money dealer who said that he laundered hundreds of millions in the scheme and that the governing party benefited from it.

Youssef, who is talking to police in exchange for a lighter sentence, claims recently re-elected President Dilma Rousseff and former President Lula da Silva knew about the kickbacks. He has offered no proof, and both leaders deny the allegation.

In a separate case involving the oil company, a Senate commission is investigating Petrobras’ purchase of the Pasadena Refining System in 2006.

Petrobras paid Belgium’s Astra Oil 360 million dollars that year for a 50% stake in the refinery. A year later, Astra exercised an option requiring Petrobras to buy the remaining 50%. Petrobras refused, but lost an arbitration case in the US in 2012 and had to pay 820.5 million for the remaining 50%, including interest and legal fees. In the end, Petrobras paid 1.18 billion dollars for a refinery that cost Astra 42.5 million in 2005.