Head
of Brazil’s Largest Investment Bank and a Senator Arrested in Petrobras Probe
Supreme Court ordered
arrests of BTG Pactual’s Esteves and Sen. Delcidio do Amaral
ENLARGE
BTG Pactual CEO André Esteves during a July 2014 interview. Photo:
Reuters
By
Marla Dickerson and
Luciana Magalhaes
Updated Nov. 25, 2015 6:02 p.m. ET
SÃO PAULO—The chief
executive of Brazil’s largest independent investment bank and a powerful ruling
party senator were arrested early Wednesday as part of an investigation into a
massive corruption scandal at state-controlled oil company Petróleo Brasileiro SA.
Federal police detained
billionaire deal maker André Esteves, chief executive of BTG Pactual, at his home in Rio de Janeiro.
Authorities in Brasília arrested Sen. Delcídio do Amaral, a member of the
governing Workers’ Party and the Senate whip, whose help is seen as critical
for President
Dilma Rousseff to pass unpopular austerity measures to shore up Brazil’s shaky
finances.
Prosecutors say the two men
were conspiring to pay millions in bribes to a key witness in the Petrobras
investigation, then spirit him out of Brazil on a private jet to prevent him
from turning state’s evidence that could implicate them in the sprawling graft
scheme.
Wednesday’s arrests were
stunning even by the standards of Brazil’s biggest-ever corruption probe, which
has toppled elites at the highest levels of the nation’s business and
government. The developments are yet another blow to Ms.
Rousseff, whose popularity has plummeted as
Brazil’s economy has deteriorated and her party, known as the PT, has become
mired in the scandal.
Previously
- Video: Esteves Interview with The Wall Street Journal, January 2014
- Brazil Police Arrest Cattle Rancher in Corruption Case (Nov. 24, 2015)
- Brazil’s Operation ‘Car Wash’: The Ill-Gotten Gains Hit Auction Block(Nov. 4, 2015)
- Brazil’s Federal Police to Question Son of Former President (Oct. 30, 2015)
- BTG Pactual Banks on Growth (March 29, 2010)
“It’s a shock to the
political system, especially for the PT, and it’s a shock to the financial
system,” said economist Maílson da Nóbrega, Brazil’s former finance minister.
Brazil’s Ibovespa stocks index
declined 2.9% to 46866 points, the lowest close in six sessions. Brazil’s
currency, the real slumped about 1.4% against the dollar. Traded units of BTG Pactual fell 21% to 24.40 reais ($6.55). Petrobras had the
biggest decline in the Ibovespa on Tuesday, with its preferred shares
retreating 7.1% to 7.90 reais.
Through his attorney, Mr.
Esteves denied wrongdoing. Mr. Amaral’s lawyer said his client is fighting the
charges against him. Workers’ Party President Rui Falcão said in a statement
that Mr. Amaral’s alleged actions have nothing to with the party. In an emailed
statement from the president’s office, Ms. Rousseff said her administration
would look for a new Senate whip. Ms. Rousseff hasn’t been implicated in the
scandal.
Messrs. Esteves and Amaral
were taken into custody on suspicion they were trying to stop a former
Petrobras executive, Nestor Cerveró, from cutting a plea bargain with
prosecutors and providing testimony that would link the men with the corruption
scandal, according to Brazil’s Supreme Court, which authorized the arrests.
Jailed since January while
he awaits trial, Mr. Cerveró is accused of taking bribes in exchange for
awarding supplier contracts as part of a massive graft ring that operated at
Petrobras for more than a decade. Court documents portray the efforts by
Messrs. Esteves and Amaral to free Mr. Cerveró from custody.
At a November meeting at an
upscale Brasília hotel, Mr. Amaral met with Mr. Cerveró’s son, Bernardo Cerveró
and two other men to discuss ways to free Mr. Cerveró from prison and have him
flee the country, according to the documents. Bernardo Cerveró, who was
cooperating with authorities, used a recording device to the tape the
conversations, authorities said.
According to the documents,
Mr. Amaral proposed using a legal maneuver to secure Mr. Cerveró’s release from
prison while he awaits trial. Mr. Amaral is then alleged to have offered an
upfront bribe of 4 million reais (about $1 million) plus 50,000 reais (about
$13,000) a month for Mr. Cerveró to keep silent. Mr. Amaral then offered to
arrange a private jet on which Mr. Cerveró would flee to Paraguay before
traveling on to Spain, where he has citizenship, in order to avoid prosecution.
Supreme Court Justice Teori
Zavascki on Wednesday said that Mr. Amaral “is part of a criminal
organization,” citing the senator’s alleged participation in “an escape plan”
that could jeopardize the corruption probe known as Operation Car Wash.
The court documents didn’t
expressly indicate a link between BTG and the investigation.
But Brazilian authorities
have been investigating BTG’s $1.5 billion purchase of a 50% stake in the
African operation of Petrobras in 2013 following allegations that the price
paid the bank may have been too low.
BTG also is a major
investor in troubled oil rig supplier Sete Brasil Participações SA, which also
was ensnared in the Operation Car Wash investigation. Sete Brasil signed
contracts worth roughly $89 billion to provide Petrobras with drillships. As
the corruption scandal grew and Petrobras slashed its investment plans, Sete
Brasil ran into trouble repaying more than $3.6 billion in loans. Recently Sete
has worked to restructure its loans with Brazilian banks. In the first quarter
of 2015, BTG wrote off 280 million reais in its stake in the company.
Mr. Esteves’s arrest is a
dramatic setback for one the nation’s best-known financial executives. One of
Brazil’s richest men, Mr. Esteves, 46, has a net worth estimated at $2.1
billion, according to Forbes.
He started his career at
investment bank Pactual in 1989 and became a top trader there before it was
bought by Swiss bank UBS in 2006 for around $2.5 billion. When UBS suffered in
2009 during the global financial crisis, Mr. Esteves engineered a repurchase as
its controlling shareholder and changed the name to BTG Pactual.
Mr. Esteves quickly
developed a reputation for innovative deal making and built BTG into Brazil´s
largest independent investment bank, with 245 partners and 3,500 employees. The
bank manages about $112 billion and has offices in 20 countries.
—Reed Johnson
and Paulo Trevisani contributed to this article.
and Paulo Trevisani contributed to this article.
==//==
SOURCE/LINK: http://agenciabrasil.ebc.com.br/en/politica/noticia/2015-11/senate-endorses-jailing-senator-delcidio-do-amaral
Senate endorses jailing of Senator Delcídio do Amaral
URL:
- 26/11/2015 11h30
- Brasília
Mariana
Jungmann reports from Agência Brasil
Senate President Renan
Calheiros (left), Senators Romero Jucá (center) and Jorge Viana (right) during
the Senate session that decided to keep the government's leader in Senate in
jail Wilson Dias/Agência Brasil
The Senate decided to
maintain the arrest of Senator Delcídio do Amaral, of the Workers' Party (PT).
In an open (nonsecret) floor vote held Wednesday (Nov. 25), the senators held
that Amaral, who is the government leader at Senate, should remain jailed, by
59 votes in favor, 13 against and one abstention.
Learn More
- Presidency evaluates prison of government's leader in Senate
- Stock falls and dollar hikes as banker and senator go to jail
Amaral has been in custody
at the Federal Police building in Brasília following a unanimous decision of
the Supreme Court (STF). The 21st stage of Operation Car Wash has also led to
the arrest of the head of Senator Amaral's office, Diogo Ferreira, and the
president of BTG Pactual bank, André Esteves.
The ground for the arrest
was a recording made by Bernardo, the son of Petrobras's former director and
Car Wash Operation convict Nestor Cerveró. In the recording, Senator Amaral
offers Cerveró a monthly $13,200 stipend for his family and an escape plan to
help him flee the country. Amaral's intention was to prevent Cerveró from
striking a plea bargain deal with the Public Prosecutor's Office, which has
been investigating the corruption scheme at Brazil's state-run oil company.
Ouster
The Senate endorsement of Senator Delcídio Amaral's inprisonment could be the first step toward his removal from office. Senator Cássio Cunha Lima, leader of PSDB, the largest opposition party, said he expects the Senate presiding officers to report Amaral to the Senate Ethics Committee.
The Senate endorsement of Senator Delcídio Amaral's inprisonment could be the first step toward his removal from office. Senator Cássio Cunha Lima, leader of PSDB, the largest opposition party, said he expects the Senate presiding officers to report Amaral to the Senate Ethics Committee.
“If they [the presiding
officers] fail, then the parties can do it. You don't hold office in Congress
from jail. This is a difficult, sad situation, but we're upholding the
Constitution, the Republic, and democracy,” Lima said.
After the vote, the
President of the Senate, Renan Calheiros, declined to comment on the
possibility of seeking Amaral's ouster by reporting him to the Ethics
Committee.
Translated by Mayra Borges
Edited by: Augusto Queiroz
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