More than five years after the Odebrecht scandal, this investigation reveals clandestine payments recorded in the Brazilian multinational’s secret payroll. Adding these to the ones that came to public light during the trials, bribes in this country exceeded US$56 million, a figure much higher than previously known. Although many intermediaries in these payments and two congressmen were convicted, powerful beneficiaries remain unknown, it’s still not clear what the company received from these contractors and their partners in exchange, nor how much money they contributed to which political campaigns.

 

Martínez: Are these bribes, yes or no? Say if it’s true, yes or no?

Pizano: Yes, yes.

(…)

Martínez: So now we’re in trouble and we don’t know what we’re involved in.

Pizano: Yes.

Martínez: We don’t know if we’re giving money to the paramilitaries.

Pizano: Yes, right.

Martínez: If there is corruption, they are the ones stealing it, thieving bastards.

Pizano: Yes.

Martínez: Here it is, these are all the hypotheses we’re working on. We don’t know if those sons of bitches are paying bribes from here to foreign governments and we don’t know if they are paying bribes here in the Colombian government.

…Later in the conversation…

Pizano: I don’t want, excuse me, I don’t want them to hate me now in Corfi, or something. I will be left without a job.

Martínez: Noo… But if we are … I am going to call Sarmiento and tell him that he has to be at the 11 a.m. meeting. …Hey, call Dr. Sarmiento, urgently, urgently.

 

This conversation happened in August 2015 between two protagonists of the corruption case involving concessionary company Ruta del Sol II, of which Odebrecht was main partner. The person speaking first is Jorge Enrique Pizano, at that time financial controller of the billion-dollar mega project, which consisted of improving existing roads, building a second lane in phases, buying land, and operating and maintaining 528 kilometers stretching from the center of the country to the Colombian Caribbean. The second is Néstor Humberto Martínez, at that time legal advisor to Grupo Aval, a financial conglomerate founded by Luis Carlos Sarmiento Angulo, the richest man in Colombia according to Forbes. 

Para ver las notas coloque el cursor encima del número

Grupo Aval, with its company Estudios y Proyectos del Sol (Episol), held 33% of the Ruta del Sol II Concession; Brazilian companies Constructora Norberto Odebrecht and Odebrecht Investimentos en Infraestructura Limitada held 61.2%, and CSS Constructores, S.A. 4.9%. In addition, Corficolombiana, another company of Grupo Aval, managed the project’s financial resources through an autonomous patrimony.[tooltips content=”Arbitration Court of Concesionaria Ruta del Sol S.A.S. vs. Agencia Nacional de Infraestructura – ANI, August 6, 2019.”]¹[/tooltips]. These resources were a combination of State contributions, tolls and investments, and loans from private partners. The companies holding the concession created in turn the Consorcio Constructor del Sol (Consol), which, in addition to building the project, subcontracted multiple companies to perform specific works. Pizano was talking to Martinez about those third-party contracts. He had turned to Martínez in August 2015 after years denouncing that there were fictitious, inflated, or duplicated contracts among these and no one seemed to care.

Three years passed. Pizano was no longer controller of Ruta del Sol II. It was November 2018 and -according to the Attorney General’s Office version of events- Pizano was in the study of his farmhouse on the outskirts of Bogota. He prepared a bottle of water with cyanide, left it on his desk and went to the bathroom to shave. There, in the bathroom, he suffered a heart attack and died. 

His son Alejandro, 31, returned to the farm after burying his father. In the study, wanting to feel close to him once more, he wore his father’s jacket and sat down at his desk. He tried a sip of the water that looked blueish and tried to spit it out because it tasted bad. A few hours later he died on the way to a hospital. This was the conclusion reached by the Attorney General’s Office whose head, at the time of the Pizanos’ death, was Néstor Humberto Martínez. 

His son, Humberto Martínez, wrote a public letter lamenting the terrible death of his great friend Alejandro Pizano, in which he rejected theories claiming that Pizano had not died of a heart attack, nor his son by accidental poisoning: 

“It is unacceptable that a family loss of this magnitude is being used to create suspicions where there are none. It is not right that strangers to us, who do not know the nature of the relationship between the two families, take advantage of the tragedy in the most abusive way to promote theories of persecution in their own benefit.”

Despite the letter, the official version of the deaths of Pizano and his son was difficult to believe, and it unleashed a national scandal. Pizano, who had also been diagnosed with lymphatic cancer, had previously spoken to María Jimena Duzán, a columnist for Semana magazine who had provided many clues in the Odebrecht case. This is what he told her:

“For three years in my reports I warned of administrative mismanagement (irregularities) before the scandal broke in December 2016. Those warnings were in the form of multiple emails that conformed a report of June 25, 2015 and of which Corficolombiana, the Concessionary company and Consol were aware. It is clear to me that I became a nuisance for Grupo Aval and for the Attorney General. That coincides with my abrupt departure from my position as ‘controller’ at the end of 2017 and with the investigations that the Attorney General’s Office is mounting against me.”

An avalanche of speculation ensued, and thousands of people took to the streets to demand the resignation of the attorney general. The country already knew that the dreamed Ruta del Sol II highway had been a bottomless pit of corruption, that in addition to Pizano’s allegations about the contracts, Odebrecht officials had confessed before the US justice system to having paid millions of dollars in bribes abroad, and they knew that other billions of pesos had flowed to congressmen and political campaigns.

Two months after the death of the Pizanos, on December 27 of that year, Rafael Merchán, former anti-corruption secretary of the Santos administration who had been summoned as a witness in the investigations into the Odebrecht scandal, committed suicide with cyanide in his apartment in Bogotá. “It was an autonomous and personal decision,” his relatives lamented to the Colombian press.

The Latin American Center for Investigative Journalism, CLIP, in collaboration with Quinto Elemento Lab and eight other media outlets in the region*, reviewed the intense case of Odebrecht in Colombia to see what was left after all the ado.

To do so, it sent a dozen requests for information to public entities, reviewed files on the convictions related to the case, analyzed an extensive arbitration ruling arising from claims against the State by the partners and financiers of Ruta del Sol II, collected various leaks of the secret accounting of the Division of Structured Operations (DOE) through which the engineering company paid the bribes and of its bank accounts in Andorra and Antigua, interviewed justice operators, protagonists and witnesses of the case, and recovered revelations made by Colombian and foreign media outlets throughout these years. 

This investigation uncovers payments made in dollars abroad to offshore accounts that were not previously known, as well as the code names of the beneficiaries. It measures the achievements of the justice system against the many gaps it left. It also highlights questions that have remained unanswered, the main one of which is perhaps this: have the strict requirements of Colombian control authorities with regard to Odebrecht in fact led to important truths about the case coming to light that may contribute to unveiling a corrupt game? Or, on the contrary, did they merely achieve the punishment of corrupt individuals and left the game unscathed? 

Emergency moves

On June 19, 2015, Marcelo Odebrecht, president and heir to the successful multinational engineering company with contracts throughout the continent, had been captured in Brazil in connection with the Lava Jato scandal, a cartel of Brazilian companies that paid bribes to politicians and public officials to obtain contracts. 

Controller Pizano was at a crossroads: on the one hand, he wanted to avoid any blame by taking his complaint to Martínez, the close collaborator of Grupo Aval patriarch Sarmiento Angulo (which is why he recorded the interview quoted above, which only came to light three years later); on the other hand, he did not want to lose a job he needed. He also had a third reason: as manager of the Empresa de Acueducto y Alcantarillado de Bogotá (EAAB), in December 2009 he had signed another concession contract with Odebrecht and CSS Constructores to carry out a US$85 million project, the construction of an interceptor that would carry contaminated water from Tunjuelo River to the Canoas treatment plant, in a neighboring municipality of the capital. He had previously reiterated his innocence in this matter, but since there had been allegations of corruption since the day the contract was awarded, he feared this time he would get entangled.  

That is why the controller not only talked to Martínez, but also sent a six-page report listing the contracts “that had not complied with the Concessionary Company’s contracting procedures”[tooltips content=”Sentencing of José Elías Melo Acosta, Juzgado Catorce Penal del Circuito de Conocimiento, April 29, 2019, p. 83.“]²[/tooltips] to José Elías Melo himself, president of Corficolombiana, and wrote several emails to other people in the same group. Officials of Grupo Aval had also sounded the alarm of the bleeding, as it emerged from the investigation of the Superintendence of Corporations.[tooltips content=’Melo had also been approached by Mauricio Millán Drews, Episol’s contract manager, on several occasions before 2015, alerting him to strange payments, according to what came out years later in the trial against the finance company’s president. Witnesses later told the courts that, after consulting with Brazil, Melo had ordered Millán to authorize the payments. See Cuestión Pública notes. And, according to Pizano, Javier Mejía, another Grupo Aval official, had refused to sign contracts that he thought were false.‘]³[/tooltips]

Grupo Aval finally starts to investigate

Between September and November 2015, Aval executives met with Odebrecht executives to discuss the relevance of payments made by the Concessionary and Consol in favor of third parties and which, according to Episol and Corficolombiana’s criteria, were “unnecessary”. They created an ethics committee that initially found no irregularities.[tooltips content=”Arbitration Court of Concesionaria Ruta del Sol S.A.S. versus Agencia Nacional de Infraestructura – ANI, August 6 2019, p. 216.“]⁴[/tooltips]. However, when they did find them, the parties reached an agreement in March 2016 not to sue each other, to settle their differences and to take measures so that these payments would not continue to be made, according to testimonies made before the Arbitration Court of the Chamber of Commerce, which ruled on a lawsuit against the State of the concessionaries and the financiers of the works. This agreement provided that Odebrecht would immediately return to Corficolombiana almost nine billion pesos (about US$2.7 million) and later complete the reimbursement up to 33 billion pesos (US$10 million). On paper, this reimbursement was seen as a refund of Odebrecht’s leadership fee in the concession. [tooltips content=”This contract was only known in July 2018, when journalist María Jimena Dussán published it in Semana: https://www.semana.com/opinion/articulo/el-pacto-de-silencio-entre-filial-de-corficolombiana-y-odebrecht-por-maria-jimena-duzan/576981/.
“]⁵[/tooltips]. Explaining this decision after the scandal broke, Martinez said that this was the amount of the contracts that could not be explained. 

If Grupo Aval was terrified that its partner was paying bribes, why did it not denounce it to the authorities and instead signed this pact of silence in the drafting of which participated the same lawyer Martínez who had heard from Pizano about the caliber of the irregularities? Was it really a shield to protect themselves from the gale that was to come with the arrest of Marcelo Odebrecht? Did they decide not to denounce so as not to attract the attention of U.S. authorities and their questions, considering Aval is a conglomerate listed on the New York Stock Exchange and, as such, is subject to the law that prohibits U.S. companies from engaging in corrupt practices (Foreign Corrupt Practices Act – FCPA)? To this date, these questions have remained unanswered.

In any case, if it was in fact damage control, it finally backfired when the Colombian Attorney General’s Office, which oversees public officials, considered that this transaction agreement was further evidence of acts of corruption in the execution of the Ruta del Sol Concession contract.[tooltips content=”Arbitration Court of Concesionaria Ruta del Sol S.A.S. vs. Agencia Nacional de Infraestructura – ANI, August 6, 2019, p. 63. In the hearing of allegations and rendering of concepts the Public Ministry issued a concept of substance regarding the issues that are debated in this arbitration proceeding: “It also finds proven acts of corruption in the execution of the Concession Contract No. 001 of 2010 and its Addenda 3 and 6. 001 of 2010 and its Addenda 3 and 6, due to the occurrence of cost overruns, fictitious contracts and the transaction contract between Odebrecht and Episol Companies”.”]⁶[/tooltips]. In the end, José Elías Melo, president of Corficolombiana and a senior executive of the financial group, was convicted by the courts for “interest in the execution of contracts and bribery by giving or offering” in relation to the payment of US$6.5 million to Morales. Then, the Securities Exchange Commission (SEC) and the Department of Justice sent them questions about Ruta del Sol II, as Grupo Aval itself disclosed in its 2018 and 2019 financial reports, although it is not confirmed that these are related to the FCPA. [tooltips content=’On December 11, 2018, Grupo Aval reported in its 6K report to its shareholders (United States) that it received an inquiry from the Department of Justice related to the Ruta del Sol II project. In the April 2019 20-F report it further informed that the Securities Exchange Commission, which oversees publicly traded companies, had also sent some questions about the same project. It reported that it was cooperating with preliminary investigations. According to the Foreign Corrupt Practices Act (FCPA) Clearing House of Stanford Law School, although Grupo Aval did not specify whether the authorities’ questions were related to possible corruption or misconduct associated with the Foreign Corrupt Practices Act, there is a case originating in the FCPA against Odebrecht in 2016, in which bribes to Colombian officials were denounced.

‘]⁷[/tooltips].

 

The capture of Marcelo Odebrecht also coincided with a change of direction in the government of Juan Manuel Santos. Throwing overboard an impeccable meritocratic process directed from his own office and without further explanation, President Santos decided to include Néstor Humberto Martínez in his shortlist of candidates for Attorney General of the Nation. The Supreme Court of Justice elected Martínez to that position in April 2016 and the following August he was sworn in. Did Santos need a trusted figure in case the Odebrecht case exploded? The question is not mere speculation. Months later, several allegations came to light about money from the Division of Structured Operations (DOE) going to Santos’ campaigns in 2010 and 2014. The former president said he never knew of such contributions and the justice system did not find reasons to investigate the allegations thoroughly.

For its part, Odebrecht foresaw what was coming and signed a retroactive contract with former congressman Otto Bula Bula to legalize its “lobbying activities” in favor of the Ruta del Sol II Concession in 2013 and 2014. As later uncovered by Odebrecht executives’ own confessions and Colombian justice, Bula’s “lobbying” had actually consisted of handing bribes left and right to the tune of around US$4.5 million to congressmen and other public officials. Disciplinary authorities are investigating this senator because years ago he allegedly benefited from the dispossession of 1800 hectares of land in Montes de María, a region where the armed conflict forced many farmers to leave. 

Agreement with the USA

Six months after the capture of Odebrecht’s president in Brazil, in December 2016, it came to light that the Brazilian multinational had reached a collaboration agreement with the US Department of Justice and had confessed to distributing US$788 million in bribes in Latin America and Angola to butter its operations. The list of grease included $11.1 million paid in Colombia, of which $6.5 million went to the director in charge of the National Concessions Institute (INCO) and the Vice Minister of Transportation, Gabriel Garcia Morales, to secure the Ruta del Sol II Concession in 2010; a further $4.6 million went to consultant Otto Bula, to curry favor with officials and congressmen that would defend their interests regarding the contract.

Based on these confessions, the Colombian Attorney General’s Office began its duly investigations. Today however, seven years later, with new evidence from multiple sources coming to light, it appears that the bribes amounted to a much larger sum.[tooltips content=”This evidence arises from the “principle of opportunity” arrangement (collaboration in exchange for legal benefits) for the García Morales case between the Colombian General Attorney’s Office and three Odebrecht executives; from these and other Odebrecht executives’ collaboration with the Colombian Supreme Court of Justice (CSJ); from informants of the engineering company encouraged to testify before the Brazilian Attorney General’s Office, which included disclosing payments in Colombia; of the testimonies provided by those involved to the General Attorney’s Office and the Colombian Supreme Court of Justice; of the lists of irregular contracts documented by Controller Pizano; of journalistic investigations in Colombia and abroad; and of several leaks of illegal payments and internal communications that were recovered from the secret Drousys system that Odebrecht ran with the same efficiency with which it carried out its engineering projects.“]⁸[/tooltips].

Having its hand forced by judicial investigators from several countries, Odebrecht also signed agreements with the Brazilian Public Prosecutor’s Office, the U.S. Department of Justice and the Swiss Attorney General’s Office “to conclude the investigation into the company’s participation in the commission of illicit acts carried out for the benefit of companies belonging to the economic group”. Later, it signed agreements or pre-agreements of collaboration with the justice system in exchange for judicial benefits with the Dominican Republic, Ecuador and Peru. Its preliminary agreement with Guatemala was recently blocked by a court.   

After proving that Odebrecht had altered its conduct, fired those involved in illegal acts, implemented effective internal controls to ensure that these would not happen again, and was determined to change its organizational culture to one committed to integrity, authorities in some of these countries granted the new companies OEC (formerly Construtora Norberto Odebrecht, now Odebrecht Engineering and Construction) and Novonor (formerly Odebrecht S.A.) “leniency agreements” that would eventually allow them to operate once more. These companies have been making similar agreements with the Inter-American Development Bank and the World Bank. Today, the bribery and internal communications forms of Odebrecht’s Division of Structured Operations (DOE) that have been recovered are in the hands of an independent company, GR Compliance, which has been handing them over at the behest of the judicial authorities of different countries. 

Colombia, as opposed to other countries, has not signed a general agreement with the Brazilian company and the officials responsible for the bribes. As such an agreement would encourage informers to come forward, it has been difficult to force the multinational to provide any additional information it may have on its illicit activities.

Fortunately, some of the evidence requested by prosecutors in other countries also gives us a sense of the dimensions of what really happened here.

The first bribes

The first record supported by a document from Odebrecht’s secret spreadsheets is dated April 2008 and refers to a project identified as PTAR-Colombia. The recipient is identified as “Pietra”. This is how Odebrecht identified its bribe-takers, with a “codinome” or code name, which, according to several sources, was created by the company’s director in the country – sometimes even in jest – and on other occasions by those in charge of processing payments from the Department of Structured Operations (DOE). In Colombia, these were mainly Luiz Eduardo Da Rocha Soares (Tushio) and Angela Palmeira. 

 

This first record may refer to the concession of the Tunjuelo interceptor that would carry wastewater to the Wastewater Treatment Plant (PTAR) in Canoas, a contract which in fact Odebrecht obtained in association with Constructores CSS in 2009. However, no payment is assigned to it. As this record is not accompanied by others associated with the same project, it is difficult to know if it corresponds to an illegal arrangement.

What we do know is that the Attorney General’s Office accused then mayor of Bogotá Samuel Moreno Rojas and his brother, then Senator Iván Moreno, of receiving a bribe from the concessionary for one billion pesos (about US$490.000 dollars at the time) to obtain this contract. Moreno pleaded not guilty to these charges. The setting of a trial date has hit many roadblocks and justice has yet to prove the brothers’ guilt, who are in prison serving other convictions for corruption.

The next payments of which Odebrecht did leave traces in its accounts are those of a bribe for García Morales. Between March 2 and September 3, 2010, six transfers were made from Odebrecht’s Klienfeld Services account at Banca Privada de Andorra BPA to the firm Lurion Trading, totaling the US$6.5 million that supposedly guaranteed that the Concession would be awarded the contract for the second section of the Ruta del Sol project. In this case justice perhaps went the farthest, as it got García Morales to confess to be the final beneficiary, and established that his childhood friends Enrique and Eduardo Ghisays lent him their offshore account in Panama to launder the money and were convicted for it (see graph with details of convictions).

Even after this, many questions were left unanswered. As Vice-Minister of Transportation, García Morales also assumed the position of director in charge of the National Institute of Concessions (INCO), replacing Álvaro José Soto. The latter had been fired by his bosses through e-mail while on an official trip, alluding to an unsubstantiated scandal of an alleged bribe. García Morales conveniently came in in September 2009. In December he signed the concession, and after the second installment of the bribe was paid, the following March, he resigned. According to what this journalistic team heard from a very close observer of what happened who preferred to remain anonymous, other officials facilitated García’s arrival to the position and must have had their reward as well, although this has not been corroborated by justice.

García Morales himself later told magistrates of an Arbitration Court that Odebrecht officials had told him that they had handed out at least US$15 million in additional payments between lobbying, journalists, and campaign contributions (it was an election year) to promote this award. As no one verified these payments, this investigation does not count them.[tooltips content=”Arbitration Court of Concesiones Ruta del Sol S.A.S vs. ANI, p.418.“]⁹[/tooltips].

One factor that sheds doubt on the possibility that the whole $6.5 million were for Garcia Morales is that not all the money was found. “The destination of US$2,308,000 is uncertain, since according to Ghisays, US$1 million went to the stock market and was lost, and US$1,308,717 went to various expenses and there is no record as to what they were invested in,” said the Attorney General’s Office in the Ghisays indictment.[tooltips content=”Written accusation form against Eduardo Ghizays Mansur, Attorney General’s Office, Code FGN-20-F-03, version 2, p. 11., June 12, 2017.”]¹⁰[/tooltips]. Why did the justice system accept that someone had lost such an enormous amount of money and did not investigate where it had gone?

Did Odebrecht pay the entire bribe, or did its partners at Episol chip in? Luiz Bueno told the Superintendence of Industry and Commerce: “…I had a person there who is Manuel Ximenez, he is Brazilian…and Corficolombiana had its representative who was Mauricio Millán, between them they made the division of the costs, considering the contribution of the US$6.5 million that had been paid to Gabriel García (…) Asked: How did Odebrecht make sure that Corficolombiana paid its corresponding percentage of the US$6.5 million? Answered: I advised Manuel Ximenez to make the division of the costs and if that did not happen or there had been any problem, that issue would have come back to me to solve with José Elías Melo, but it never happened because it was fulfilled as agreed”.

García Morales, for his part, told Arbitration Court judges: “During my questioning I was presented with a lot of evidence and asked to say whether I had knowledge and, although I was not given the evidence in detail nor could I take copies, an official of Corficolombiana or Episol whose name is Mauricio Millán spoke about a payment made in 2010 that even he had objected to, because it had no support”[tooltips content=”Arbitration Court of Concesionaria Ruta del Sol S.A.S. vs. Agencia Nacional de Infraestructura – ANI, August 6, 2019, p. 430.”]¹¹[/tooltips]. Millán said something similar as a witness in the trial of José Elías Melo, president of Corficolombiana.[tooltips content=”Sentencing of José Elías Melo Acosta, Juzgado Catorce Penal del Circuito de Conocimiento, april 29, 2019, p. 19.“]¹²[/tooltips]. The justice system convicted Melo for these facts, and asked to investigate Luis Carlos Sarmiento Gutiérrez, son of the leader of Grupo Aval, but this investigation was shelved. However, Melo, as well as his bosses in Grupo Aval, has reiterated that he did not know about the bribes, much less contributed to them. Justice has not prosecuted anyone else in this group.

Although García could not justify where part of the bribe money went, the former Vice Minister admitted his guilt before the Colombian Attorney General’s Office, which reduced his sentence and prevented him from paying multimillion-dollar penalties, as ratified by the Superintendence of Industry and Commerce in response to a request for information from this team.

It is difficult to corroborate whether in 2010 Odebrecht made other payments, because its secret spreadsheets for that year are not public. The transfers to García, via the Ghisays, were known because of his collaboration and that of the Brazilians, and because the Private Bank of Andorra made these accounts public.

However, the press did learn of another irregular payment made that year. Roberto Prieto, who was the manager of Santos’ presidential campaign, at that time candidate of President Álvaro Uribe’s party, acknowledged in a radio interview that he had known about a payment of US$400,000 to the Santos campaign before he came to manage it, earmarked for poster printing. He said the candidate did not know about it.  In 2018, recordings of several conversations came to light, among them, one of Santos with Prieto in which he asks about the issue of the posters with concern, leaving the feeling that the President did not know about this in-kind donation. From there, it emerged that the contribution was wired to the Panamanian firm Impressa Group Corp, created shortly before in June 2010 by the husband of a government official. Days later, the finance committee of the campaign issued a statement saying that “it was without our knowledge, or the manager’s, or of the finance committee, and with the absolute ignorance of then candidate Juan Manuel Santos”.

Ruta del Sol begins

Towards the end of June 2011, the Ruta del Sol II Concession works started. At that time, the Drousys system of Odebrecht’s DOE registered two payments, of which there was no knowledge until now. Both were made on June 28, 2011, and although it is not known from which account they came out or to which company or person they were paid, it was noted that the related work was the “Rota do Sol”, and that the person responsible was LB DS, (Luiz Bueno (LB) was the supervising director (DS) of Odebrecht in Colombia). Each payment has a number and the amounts and code names of the beneficiaries. ‘Marmore’ received US$350,000, and ‘Barba Blanca’ received US$1 million. There is also an “accumulated” figure of US$11,150,001.40, but it is unknown whether it coincides with the amounts paid up to that moment for the Ruta del Sol II contract. 

As far as it was possible to ascertain, the justice system never asked about these payments and none of the multiple witnesses who received legal benefits mentioned them. 

The following October, the Instituto de Concesiones (INCO) published the bidding conditions for the Transversal de Boyacá. In December the bidding was opened and in March 2012 it was awarded to the Conpros consortium, belonging to the same partners Odebrecht and Proyectos de Infraestructura S.A. (PISA), as well as to Grupo Aval. It was a smaller project tendered for US$87.6 million to improve and expand a 49-kilometer highway that runs from the emerald zone in Boyacá, in the east of the country, to Puerto Boyacá on the Magdalena River. It was completed smoothly in July 2016. 

Who are these characters Marmore and Barba Blanca? Were they paid as a reward because the construction of the Ruta del Sol II had finally started although the work had been commissioned a year and a half earlier? This journalistic team asked about this and other cases to people close to Novonor and OEC, the new companies of the Brazilian business group. They answered that until an environment of collaboration is consolidated in Colombia in which the evidence they provide is not used against their companies or their former employees, they cannot give more information. If this were to change, they could hand over the information they have, as they have been doing in other countries.

Bulldozer favors

Federico Gaviria, a marketing executive who had been involved in other scandals (for instance he was accused of paying bribes to sell ambulances to the city of Bogotá in the notorious “carrusel de la contratación”) was hired by Odebrecht to open doors for them in Colombia. As he himself said to justice, Luiz Bueno, director for Colombia of the Brazilian firm, told him that they needed to get a “legal stability” contract, a package of rules that would freeze the fiscal conditions of the Ruta del Sol II Concession for the duration of the contract. The deadline for approving the last contracts of this kind was December 2012 and they were in urgent need of help.

According to Bueno, in mid-2012 he met Otto Bula, a former congressman, who offered his support. Bueno then delegated the matter to Yesid Arocha, Odebrecht’s legal director. Bula called a political godson from the same region of the country, Bernardo Miguel Elías, nicknamed Ñoño, to do the job. “Bula related that, having perfected the negotiation, Elías, along with his peers in the budget commissions were very active in the legal stability project, fulfilling tasks before the Minister of Finance, the National Budget Director and the Minister of Foreign Trade, Sergio Díaz-Granados, who delegated the task of lobbying the Ministries to Luis Miguel Pico, and the ministries, in turn, lobbied Congress,” says Elías’ sentencing.[tooltips content=”Sentencing of Bernardo Miguel Elías Vidal. Radicación No. 52892. Ley 600 de 2000. July 29, 2021, p. 39.“]¹³[/tooltips].

The government was in negotiations with Congress to pass a tax reform bill, and that gave the senators special leverage for obtaining favors. Bula and other intermediaries claimed that the Brazilian company agreed to wire the former congressman 4 billion Colombian pesos (equivalent to $2.23 million at the exchange rate of early 2013)[tooltips content=”This figure varies according to the sentencings of Bernardo Ñoño Elías and Antonio Guerra de la Espriella. The first one states that the Attorney General’s Office, in its indictment resolution, said that 4,000 million pesos had been wired, but Bula asserted that he had only paid Elías 3,000 million pesos. (p. 4) In Antonio Guerra’s sentencing, based on the testimony of the owner of the Panamanian company used to pay the money, CSJ investigators assure that 4,500 million”]¹⁴[/tooltips]. The money was sent in the first quarter of 2013 from Hernando Mario Restrepo’s company, New Com INT, S.A., registered in Panama in September 2008, to another company in Colombia which in turn wrote several checks to Bula, and Bula distributed them in cash.[tooltips content=”Sentencing of Bernardo Miguel Elías Vidal. Radicación No. 52892. Ley 600 de 2000. July 29, 2021, p. 39-45.”]¹⁵[/tooltips]. Restrepo said he volunteered to bring the money, believing it was a legal operation, only because Bula owed him money from a cattle ranch and he would deduct it from there. According to Restrepo, Elías needed the money to pay off campaign debts.[tooltips content=”Sentencing of Bernardo Miguel Elías Vidal. Radicación No. 52892. Ley 600 de 2000. July 29, 2021, p. 44.”]¹⁶[/tooltips].

No accounting records of Odebrecht’s DOE have been made public that can corroborate whether the amounts paid for this purpose are the ones mentioned by those involved. However, the investigators of the Supreme Court of Justice did find the transfers from Panama to a Colombian company.[tooltips content=”Sentencing of Antonio Guerra de la Espriella No 51087, Ley 600 de 2000.  March 15, 2022, p. 178.
“]¹⁷[/tooltips]. Moreover, according to the sentencing of the CSJ, Senator Antonio Guerra de la Espriella received 200 million pesos (about US$100,000 at the time) in cash for helping pressure the government to approve the contract, for which he was convicted (see graph with convictions). But it does not yet know who the final recipients of the cash were, besides Elías and Guerra.

The point is that on December 31, 2012, at 5 p.m., hours before the deadline, the Ministry of Transportation and the Concessionary Ruta del Sol II signed the stability contract, which, according to what the intermediary Gaviria heard Bueno say, brought them tax benefits for US$60 million.

Apparently, they then started calling these congressmen and several others who are now under preliminary investigation (see graph) ‘Buldozers’, because they swept away any obstacle to get the well-paid “favors”. This is how Odebrecht’s Department of Structured Operations (DOE) identified in its spreadsheets payments to be distributed among these congressmen with the intermediation of Bula, and the ways he managed to bring the money to Colombia.

Supposedly, these ‘Buldozers’ sold their services to Odebrecht to push for the approval of the addition of a 72-kilometer route that would cross the Ruta del Sol from the city of Ocaña, in the west, to Gamarra, on the Magdalena River.

The new road had already been in approval process for several months. Since July 2012, the newly created National Infrastructure Agency (ANI), led for almost a year by Luis Fernando Andrade, an experienced consultant and McKinsey partner, formalized its interest in developing this road and a month later, the Concessionary Ruta del Sol II had already submitted its proposal to plan the road. A road was required that would effectively connect Venezuela with Colombia. If this route had a dual carriageway and a good surface, it would shorten by several hours the trip from Cúcuta on the Venezuelan border to Ocaña, taking the Ruta del Sol to Bogotá. Andrade is currently on trial accused of undue celebration of contracts and other alleged crimes for the modifications to the contract with Concessionary Ruta del Sol II that included this road. He has insisted on his innocence. 

However, according to the testimony of several people involved, Odebrecht made payments to the ‘Buldozers’ through its consultants Federico Gaviria and Otto Bula to accelerate the process of the addition of this road to the original concession contract. The available DOE secret spreadsheets only provide information beginning in late 2013, and therefore, this investigation could only corroborate nine transfers from December 5, 2013, from Odebrecht’s accounts abroad to various accounts belonging to Bula or his friends in Panama or in Hong Kong, China. Seven of these payments were made during election season, between the end of February and the end of June 2014. The total amount is US$4,066,795.

The ninth wire transfer was made in August 2014. It is unclear whether these payments effectively “bought” the addition of the Ocaña-Gamarra route to the contract with the Concessionary Company. When they wired the bribes to obtain the Ruta del Sol concession in 2010, or when they wired them to get the legal stability contract, they always did it after the fact, after making sure they got what they wanted. The “amendment 3” was not fully approved in all instances until October 2014, so why did they pay all this money in dollars in advance? 

Is it possible that in August 2014 Odebrecht was actually paying for the new contract it had just secured? At the end of July, the Navelena Consortium, made up of Constructora Norberto Odebrecht (87%) and Valorcon (13.33%) submitted its economic bid with a view to obtaining the contract to channel, dredge and maintain 908 kilometers of Colombia’s main river, the Magdalena, to make it navigable. This river runs parallel to a large part of the Ruta del Sol. As the only qualified bidders, they knew they would obtain the concession. The work was estimated at 2.5 billion pesos (equivalent to US$1,275 million). Valorcon is owned by Julio Gerlein, from a family of politicians from Barranquilla who later was investigated for another notorious case of vote buying, unrelated to this Navelena Concession.

However, it cannot be affirmed that bribes were paid in relation to this road. In 2016, Navelena was still not able to achieve the financial closure necessary to begin the works. During the trials of this case, it came to light that Elías and Bula had lobbied public and private financial entities trying to obtain the leverage required by the Portuguese company Afa Vías to acquire a part of Odebrecht’s shares in Navelana.[tooltips content=”Sentencing of Antonio Guerra de la Espriella No 51087, Ley 600 de 2000. March 15, 2022, p. 7.”]¹⁸[/tooltips]. Then the international scandal broke out and the government liquidated the contract in 2017. Justice found no evidence of corruption.

Odebrecht had confessed before the US government to paying US$4.6 million to Bula to distribute among officials and congressmen. As we saw earlier, the amount in the payrolls destined to the ‘Buldozers’ is smaller and short by about US$530.000, which could perhaps have been paid in a previous transfer.

The question remains open as to why Odebrecht would want to pay so much money in advance to secure the construction of a road that was already being processed with political backing in high government. And if this was not the reason, then who could these beneficiaries be that those involved so wanted to keep hidden?

In his first statements before justice, Bula categorically denied that he had received the US$4.6 million that the Brazilians swore in the United States to have paid him and that exceed the US$4 million registered on the secret spreadsheets. Moreover, a source in the Attorney General’s Office said that Bula was furious about Odebrecht’s confession. Both this former congressman and Gaviria spoke of money that went to financing the 2014 election campaigns, but without references to specific campaigns. 

As restitution, Bula promised to give up a farm and a promissory note totaling US$2.1 million. According to Gaviria’s sentencing, he had received $1.6 million in personal benefit and was fined an amount in pesos equivalent to $2.8 million. In response to a request from CLIP, the Coactive Collections Office of the Superior Council of the Judiciary informed that by law, those sanctioned have up to two years to pay the fines.

It also informed that Bula owes 42,284,745 pesos (almost US$10 thousand), but they do not have information on Gaviria, since not all the fines imposed by the judges come to the attention of the Coactive Collection Offices of the Judiciary. 

Both were given benefits for their collaboration and are now free. However, today it is not known precisely who received the funds, besides to what they kept as commission.

The information provided by Odebrecht’s supervising director for Colombia Eleuberto Martorelli (a position he assumed in January 2013) before the Colombian justice system regarding the ‘Buldozers’ case, contradicts the data on the DOE spreadsheets that have been made available so far. According to Martorelli, four payments in May, June and September 2014, totaling US$1.3 million, went to congressmen and officials who facilitated Odebrecht’s efforts to move forward with the addition of the Ocaña-Gamarra road to the original contract. However, in the DOE’s payroll, they appear as payments to the code name “Marinheiro”. 

These were not the only payments to this beneficiary with “codinome”.

A publicity push for the 2014 presidential elections

As Martorelli himself confessed before Brazilian justice hoping they would pay more attention to his claims, Odebrecht contributed US$1 million dollars – paid in two drafts of US$500 thousand each, on March 28 and April 28 – to Sancho BBDO, a veteran Colombian advertising agency that ran Santos’ re-election campaign, to conduct an opinion survey. 

“We met with Luis Peña, a publicist (he refers to Luis Alberto Peña Bernal, executive of Sancho BBDO) and he asked me if we wanted to hire his firm to conduct a study for Santos’ re-election campaign, and that it would also serve other campaigns and Odebrecht. I said yes, but on the condition that he would tell the government that Odebrecht had contributed and that this would help us solve problems we had in the Ruta del Sol,” said Martorelli. He went on to explain that they had claims for US$6 million from the government for extraordinary construction costs on the Ruta del Sol (winter, delayed environmental licenses, social protests, ELN attacks on machinery, etc.), but that “approaching the Colombian authorities is very difficult, so this was an opportunity to approach the authorities through the campaign route”. 

According to an industry expert, many other concessionary companies in Colombia win bids for public works by offering lower costs initially, confident that they will increase the value with subsequent claims. Thus, what Martorelli called “approximation difficulty” meant that the ANI’s Andrade was not yielding to their claims. Their solution was to make an indirect campaign contribution. 

One indicator of the fact that Odebrecht made this payment in an irregular way is that it left the DOE and was registered in the clandestine spreadsheets of Box 2, the one that was not included in their official accounts. The transfer was made to the firm Paddington Ventures of Panama and the code name of the beneficiary was “Marinheiro”.

In total, this investigation found US$3 million with “Marinheiro” as final beneficiary, including the well-known wire transfer to Paddington. Two of those payments to this beneficiary were made in late June 2014, very close to the presidential runoff. Santos, who ran for reelection that year, had competed against Oscar Ivan Zuluaga, of the party of historic right-wing leader Alvaro Uribe Velez, and had lost in the first round.

 

It was not uncommon for Odebrecht to use the same codinome for various payments. In fact, this codinome was also used in bribe payments in Peru. This is why it cannot be proved that all payments to “Marinheiro” went to the Santos campaign, but it does leave the question open.[tooltips content=”This thesis according to which all were payments to the Santos campaign is supported by the fact that in his collaboration to justice, Bula assured the Attorney General’s Office that Martorelli had asked him to make two deliveries of US$500 thousand that went to Andrés Giraldo, a close friend of the Santos campaign manager. Testimony of Otto Bula before the Attorney General’s Office in Acta de Aproximación of June 2017, p. 37-38.“]¹⁹[/tooltips].

As they had done in other countries, Odebrecht wanted to make sure that the opposition campaign, which could very well get hold of government, owed them favors. According to statements before justice made by Odebrecht’s supervising director in Colombia, Martorelli, his company paid part of the fees that renowned Brazilian publicist ‘Duda’ Mendonça charged the Zuluaga campaign for his advice. “During a work visit, Daniel Garcia (Arizabaleta) confirmed it to me, indicating that the publicist had asked the campaign for payments for US$1.5 million in addition to what we had agreed. I interpreted this comment as a message for the company to support the campaign by paying additional costs charged by the publicist”, he said, and explained that he consulted with his boss Luiz Mameri “considering that it would be interesting to support Mr. Zuluaga’s campaign, because he was rising in the polls and could be in the second round of the elections”.

Daniel García Arizabaleta was a consultant for Odebrecht and worked in Zuluaga’s campaign. The candidate, his son and the now outgoing president of Colombia, Iván Duque, traveled to meet with the publicist. They later stated that they never knew that Odebrecht had paid those fees. 

García Arizabaleta’s role in this story is interesting. He had been appointed by the Uribe administration as director of Invías, but he had to resign because he had lied about his credentials. According to Martorelli’s statement to the Brazilian justice system, Luiz Bueno introduced him to García as soon as he arrived to replace García in January 2013. Last June, García was indicted by the Attorney General’s Office for illicit enrichment and misrepresentation in the Odebrecht case. 

The payment to this publicist, registered in the DOE accounts and thus indicating its secret nature, was made in three drafts totaling US$1,610,740, between June and July 2014, to the offshore Topsail Holding S.A., registered in Panama. The beneficiary in the DOE spreadsheet was ‘O Outro’, which in Portuguese means The Other, a detail not without humor.

When the news was known three years later, magistrate of the National Electoral Council, Armando Novoa said in session that these campaigns should be investigated for possible violations to electoral rules. However, a few days after his proposal, an anonymous letter arrived stating that Novoa was not fit to judge the case. The Electoral Council in Colombia, which is constituted by representatives of the most voted political parties, accepted the petition for recusal, and prohibited Novoa from participating in the discussions. Soon enough the magistrate began being intimidated, while he continued to ask for an investigation into campaign financing. In Colombia, it is forbidden by the Constitution to receive campaign donations from foreign entities, as well as failing to declare donations to the Electoral Council, whether these be in kind or in money. Finally, the Electoral Council ended the administrative investigations of the two campaigns and found no evidence to keep them going. 

Ultimately, in a series of public statements, the manager of the Santos Presidente campaign assured that neither he nor Santos knew about these payments. 

The Commission of Accusations of the House of Representatives, in charge with investigating possible illegal actions of the President, also failed to find merit to continue with the case.

Following the payments made to the campaigns, the justice system documented another irregular transfer made in dollars, although this was not corroborated in the DOE’s clandestine accounting. It is a payment for US$2,727,000 million dollars to the firm Consultores Unidos Panamá, whose owner was Eduardo Zambrano. Zambrano had eluded the country’s justice in the eighties, when as vice-president of a private bank him and his boss were giving out supposed loans to fictitious cattle ranchers. Instead, they were using the money to buy shares in their own bank and consolidate their position. It was the Investigative Unit of El Tiempo that brought to light this mess at the time, which Alberto Donadío, a member of this team, recalled in his book Nobelbrecht on the Odebrecht case in 2019.

It is unclear what Odebrecht was paying for in May 2015 when it made this transfer. Zambrano told the Attorney General’s Office that the money was “for some political campaigns.” Congressional elections had taken place the year before and presidential elections eleven months earlier. In October 2015 there were elections for mayors, governors, and local authorities, so they could have been contributions to those campaigns. In any case, it is not obvious what Odebrecht would get in exchange for those contributions, nor did justice investigate exactly which campaigns they went to and in what amounts. It barely got Zambrano to admit to some accusations made by the Attorney General’s Office, and even though he had been a fugitive from justice in the past, he was given benefits for his collaboration. This June, he was released for having served his sentence.[tooltips content=”Zambrano Caicedo – Eduardo José complies with the order of 06/21/2022 and is sentenced to prison … order recognizes remission of sentence in proportion to 49.5 days for the work and study activities carried out in the months of January and February 2018, as well as from January to March 2022.“]²⁰[/tooltips].

The Dirty Dozen

In addition to the bribes paid abroad in dollars described so far, there were also the suspicious money transfers reported by Pizano. Different irregular funds were flowing in parallel, between March 2013 and December 2015, in Colombia, through the Ruta del Sol Concessionary and its construction company Consol. The funds were extracted through inflated or fictitious work contracts, land payments for higher values, and other tricks.

As some of the money in these contracts did go to paying for works, plans, or real contributions to the Ruta del Sol highway, it is difficult to determine exactly what proportion ended in the pockets of the bribe-takers.

What we do know is that the major irregular contracts denounced by Pizano, and later corroborated and expanded by the Attorney General’s Office, went through just a dozen intermediary companies: Profesionales Bolsa, Inversiones Profesionales, Presoam, Desimpro, Gistic, RGQ Logistics, Grupo Mundial de Ingenieros, Ingream, Inversiones Torrosa, Consorcio SION and Consultores Unidos de Colombia, sister company of Zambrano’s company in Panama. According to the Attorney General’s Office investigator, the money from Consultores Unidos de Panamá and Colombia was used in a very small proportion to make some road plans, but almost all of it went to Odebrecht’s consultants Gaviria and Bula, and about 10% was paid in taxes (surely a rare occurrence when income taxes are paid on bribes).

Counting only the payments to Consultores Unidos and the other eleven companies, the Concessionary Company and Consol signed irregular contracts for more than 74 billion pesos, a value greater than the one denounced by Pizano, and double the value that Odebrecht agreed to return to Corficolombiana for contracts that later, when they signed the very singular Transaction Agreement, they accepted had been irregular. The equivalent in dollars, using average exchange rates on the dates of the payments, was US$34.8 million. Witnesses in the various cases mentioned many other transfers, including a payment to pay off a mortgage on a farm and payments through small local businesses where the road passed through, among others.

As a result of the declarations of the main intermediaries – Bula and Gaviria – and of the many businessmen who lent their companies to receive bribe money, the Supreme Court of Justice has opened preliminary investigations against nine congressmen. In 2021, it sentenced Bernardo ‘Ñoño’ Elías to eight years in prison and Senator Antonio Guerra de la Espriella to 13 years in prison in 2022. In addition, it fined Elías the equivalent in dollars of 2.9 million, which according to the Superior Council of the Judiciary (CSJ), he has yet to pay.[tooltips content=”Answer to an information petition from CLIP. División de Cobro Coactivo, Dirección Ejecutiva de Administración Judicial, Consejo Superior de la Judicatura, July 5, 2022.“]²¹[/tooltips].

The CSJ also acquitted then senator Plinio Olano in 2019, who a year earlier had been removed from the Senate by the State Council for influence peddling. A few weeks ago, the CSJ shelved the case against Senator Armando Benedetti in first instance.

In comparison to other countries, it can be said that the General Attorney’s Office and the Court did an effective job disentangling these operations, almost always complicated because they passed through several hands, consisted of multiple checks written to different operators, and the money was often delivered to the beneficiaries in cash. It also prosecuted, interrogated, and convicted most of the legal representatives or operators behind the intermediary companies that facilitated the bribes, and forced them to collaborate. 

However, justice has not advanced in some cases, such as that of Esteban Moreno, who had held several positions in the Liberal Party and Santos’ presidential campaigns and is accused of collecting money wired for contracts to Gistics and RGQ Logistics as contributions to Santos’ presidential campaign. 

Moreover, collaborations with justice of those involved did not always lead to the whole truth. Many of the sentencings affirm that Concesionaria Ruta del Sol II or Consol made payments in exchange for favors from congressmen, particularly to move forward amendments 3 and 6 related to the Ocaña-Gamarra road. However, the fact that these payments were made in advance does not fully make sense, and neither do the 2015 transfers, made seven months after the amendments had already been approved.

Much ado

In the end, after more than five years of a scandal that produced hundreds of headlines, thousands of hours of radio and TV reports, interviews and commentaries, a lot of investigative journalism work following leads and tying up ends, and dozens of accusations by the Attorney General’s Office and court rulings, we still don’t know for sure who many of the final beneficiaries of these bribes were, nor how much money they received exactly, nor where that money went. We don’t even know what these bribes were really paid for. While modifications to the original Concession contract seemed to be the main motive, as seen in this investigation, the phases of its approval processes do not always coincide with the illegal payments made.

Likewise, different sources agree that money went to political campaigns, but justice has not sanctioned anyone for this reason.

This journalistic investigation has been able to establish, based on the secret spreadsheets of Odebrecht’s Structured Operations Division and on bank documents verified by the justice system, that payments were made in dollars from abroad for approximately US$21.9 million, and in pesos through the fictitious or inflated contracts associated with the Ruta del Sol for the equivalent of at least US$34.8 million, for an approximate total of US$56.7 million.[tooltips content=”The contract figures in pesos were converted into dollars at the average conversion rate for the month in which the transfer was made. For this reason, the total figure in dollars is approximate.“]²²[/tooltips].

In Colombia, the Superintendency of Industry and Commerce (SIC), according to its own reports, sanctioned Odebrecht and its affiliates with fines equivalent to US$51.4 million and Corficolombiana and its subsidiary Episol with another US$26.2 million. It also fined Concesionaria Ruta del Sol II US$64.000. Of these, Corficolombiana and Episol paid the sanctions in total, while collections from Odebrecht and its companies in Colombia, including the Concessionary, are suspended as they are being settled, according to what the SIC told this alliance.

The Colombian justice system managed to convict at least 12 main intermediaries in the irregular flow of money, a senior executive of Grupo Aval and two congressmen. Nine more are under scrutiny and a former mayor of Bogotá, a former director of Invías, and many others, stand accused. However, justice has been slow on some cases involving influential figures, or it has failed to act. It was generous on its sentencing of many of those accused, even when they had already been involved in illegal activities. It failed to account for all the money that was handed out as bribes, and it failed to uncover the names of all the takers. 

In a recent public statement, the Department of Justice and the FBI offered a reward for information “leading to the seizure, restraint, forfeiture or repatriation of bribes or assets related to bribes paid by Odebrecht S.A. and Braskem S.A. that are (1) in an account at a U.S. financial institution, including a U.S. branch of a foreign financial institution; (2) located in the United States; or (3) in the possession or control of any U.S. person”.  According to a local media report, FBI agents have already been in Colombia for five months searching for this information and are likely to announce results in the next few weeks. 

Although this investigation revealed payments recorded in Odebrecht’s secret spreadsheets that were previously unknown, neither journalism nor justice have yet gained access to all the documents that may exist, nor has Odebrecht fully collaborated in this process. The only way to achieve this is through a plea bargain agreement, as other countries have done. Then, with all the information available, it would be possible to truly dismantle this deep-rooted corrupt arrangement whereby resources for public works in Colombia are used to finance campaigns, to buy future favors from governments and, incidentally, to satisfy the excessive ambition of some repeat offenders.

Main Image and Infographics: Miguel Méndez

*This article is part of the series “Journey to the center of Lava Jato” by the Red de Investigaciones Periodísticas Estructuradas, with the participation of journalists from La Nación (Argentina), Metrópoles (Brazil), the Latin American Center for Investigative Journalism (Colombia), El Universo (Ecuador), Quinto Elemento Lab (Mexico), La Prensa (Panama), IDL Reporteros (Peru), Sudestada (Uruguay) and Armando.info (Venezuela).