On Friday night, Peruvian authorities arrested the first two people involved in a scandal reverberating across Latin America. Brazilian construction giant Odebrecht allegedly paid hundreds of millions of dollars in bribes to win lucrative infrastructure contracts.
Edwin Luyo Barrientos, chairman of the public works committee for the line 1 of Lima subway, and former Vice Minister of Communications Jorge Cuba were arrested in the Peruvian capital accused of receiving bribes from Odebrecht.
The Attorney General's office said the project required an initial investment of US$410 million, but later they increased the budget by US$109 million.
In cooperation with Peruvian prosecutors, the Brazilian construction firm has admitted it paid US$29 million in bribes between 2005 and 2014, and it was awarded public-works contracts valued at $152 million during Humala’s tenure in office.
This case has exposed officials from Peru's last three governments led by Alejandro Toledo, Alan Garcia and Ollanta Humala.The most recent president and his wife, former first lady Nadine Heredia, are under investigation and banned from leaving the country.
The company agreed this week to make a voluntary deposit of US$8.9 million to Peru’s treasury as an act of good faith. The payment is in addition to criminal fines Peru’s courts will later levy on the company. President Pedro Pablo Kuczynski said the deposit was not enough, and that it needed to deposit at least US$26.7 million.
Odebrecht is a major player in the massive embezzlement and bribery scheme at Petrobras in Brazil. Its CEO, Brazilian mogul Marcelo Odebrecht, has already been convicted on different charges and received a sentence to 19 years in prison.