Have you ever heard of a bigger corruption scandal?

luiz

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Like, anywhere in the world and at any time in history. I can't think of any.

Short summary before article: Petrobras is Brazil's state-owned oil company. It also used to be the country's biggest company, before being destroyed by the current administration. Basically, after taking over the country in 2003, Lula's Workers' Party (PT) replaced all the high level (and even mid level) administration of all public companies for unqualified politicians of the PT and allied parties. Suddenly all projects started to cost many times more than they were originally budgeted (due to both massive incompetence and corruption). Now a judge triggered a massive investigation that found that government politicians and their cronies stole at the very least 20 billion US dollars from the company during PT's rule. Some of the arrested people were mid-level managers, and some of those relatively unimportant individuals already agreed to return over 100 million dollars in stolen money. That's how much one mid level manager admits to stealing. God only knows how much the upper echelons have pocketed. The investigation is shaking the government, Petrobras and several of Brazil's main private contractors, all of which have ultra-cozy relations with PT's kleptocracy and many of which were now caught red-handed.

It is widely believed that the total corruption losses may add up to 50 billion USD.

Petrobras releases results delayed by corruption scandal

Petrobras has released its delayed third-quarter results but failed to arrive at how much has been stolen from the Brazilian state-controlled oil company in a vast corruption scandal that has shaken confidence in the world’s second-largest emerging market.
The company said just after 4am in Brazil on Wednesday that it decided to publish its unaudited financial statements for the three months to September 30, originally due in November, to avoid breaking some of its debt covenants.
However, Petrobras said it was “impracticable to measure in a correct, complete and definite manner” its losses from an alleged bribery and kickback scheme at the company — believed to be the largest of its kind in Brazilian history.
Analysts had widely expected Petrobras to book a writedown of up to $20bn in what would have been a vital first step to regain credibility in the market and the trust of PwC, its auditors, who have refused to sign off its accounts as police investigate the corruption allegations.
About 40 executives from Brazil’s largest construction firms and former Petrobras directors have been arrested during the past few months over the scandal. They are accused of conspiring to inflate the value of Petrobras contracts by up to 3 per cent for everything from refineries to ships in order to pay bribes and funnel cash to politicians, mainly from the ruling Workers’ party and its allies.
Without audited results, Petrobras may struggle to raise new capital and risks triggering a technical default for violating the terms of some of its existing debt, according to analysts and lawyers. Earlier this month, some creditors agreed to accept unaudited third-quarter results instead as long as they were released by the end of this week.
However, analysts said the Brazilian government may still have to provide the company with emergency funding — a move that would not only strip Petrobras of its investment-grade credit rating but also endanger Brazil’s investment-grade status. With more than $135bn in gross debt as of the end of September, Petrobras ranks as the world’s most indebted oil producer.
On Wednesday Petrobras said it was taking measures to ensure it would not have to “visit the debt markets in 2015”.
The scandal comes at a particularly delicate moment for Brazil’s economy as President Dilma Rousseff struggles to win back investors’ trust with a series of market-friendly measures and prevent another technical recession this year.
It also comes as Petrobras faces large operational challenges from the plummeting global oil price. According to the unaudited results, Petrobras’s net income fell 9 per cent to R$3.09bn in the third quarter, compared to the same period in 2013.
Petrobras recorded a R$2.7bn writedown on two of its refineries in the northeast of Brazil.
“The company believed it should terminate those projects, in light of the economic results obtained so far and considering the projected growth rates for the domestic and international markets for oil products, as well as the lack of an economic partner for the project,” Petrobras said.
Fears have also grown over the impact of the scandal on Brazil’s wider economy. While the country’s nascent oil and gas industry has effectively been put on hold, analysts have warned of potential defaults at construction companies that are facing a liquidity crunch after being linked to the scandal.
OAS, which is building the world’s third-largest dam, has already missed two debt payments after its chief executive was arrested by police in November as part of their investigation into the scandal. Fitch has warned of further challenges for Brazil’s public banks as they deal with higher loan loss provisions in the construction and oil and gas sectors.
Petrobras said it is co-operating with the police investigation, while OAS has declined to comment.
http://www.ft.com/cms/s/0/98674a12-a6d5-11e4-9c4d-00144feab7de.html#axzz3Q8IatlnG

And of course the same Workers' Party that brought us this multi-tens-of-billions-of-dollars corruption scheme had brought us before the Mensalão, which until now was Brazil's biggest corruption scandal ever. They seem very good at record-breaking.

My question is: has anyone heard of a bigger scandal, or can we submit this one to the Guiness Book?
 
I agree. This makes Putin's Olympic games and the US Lobby culture seriously laughable compared to this.
 
Didn't the U.S. lose more money than that in Iraq? I mean, nobody in the U.S. seemed to care, it wasn't a huge scandal, but technically I think a larger amount of money was involved. That's not even to mention all the shady contracts that went to companies with ties to the U.S. government.
 
If I was most esteemed and glorious world dictator, this is what I would do to every economy in the world.

For everything is belong to me, and none for you.
 
Didn't the U.S. lose more money than that in Iraq? I mean, nobody in the U.S. seemed to care, it wasn't a huge scandal, but technically I think a larger amount of money was involved. That's not even to mention all the shady contracts that went to companies with ties to the U.S. government.

Yeat, whatabout USA #1?
 
Didn't the U.S. lose more money than that in Iraq? I mean, nobody in the U.S. seemed to care, it wasn't a huge scandal, but technically I think a larger amount of money was involved. That's not even to mention all the shady contracts that went to companies with ties to the U.S. government.

Yeah but I'm talking of actual money pocketed by individuals through corruption, not just "losses". I don't think any individual in the US stole $100 million as a result of shady Iraq contracts. In this scandal this is what mid-level nobodies pocketed.

Just to give an example of the magnitude of the destructiveness and crookedness of Workers' Party:

In 2008 they approved the construction of the Abreu e Lima oil refinery for 2.4 billion USD. Half of that was supposed to be paid by Venezuela, as it will refine Venezuelan oil and was joint-venture between PDVSA and Petrobras. It was supposed to be ready in 2011. We're in 2015 and it's still not ready. Total cost now? $18.5 billion US dollars, paid entirely by Brazil (Venezuela can't afford toilet paper nowadays). Note that this amount is not included on the estimated $20 - $50 billion dollar losses due to corruption, because we don't know yet how much of the increase was due to corruption and how much was due to grotesque incompetence.
 
Funnily, last night I had a dream of placing a donut vending machine in the middle of town, and making 17 million quid from it in one week.

People in my dream world must love donuts.
 
You know what "Uhh yeah we lost $20 billion" means.

But the vast majority of the cost of Iraq War was due to buying and paying for actual stuff, from Tomahawk missiles to the the deployment of hundreds of thousands of troops (I recall reading somewhere that each American soldier deployed to a war zone costs over 1 million dollars per year).

It's fine to call all the money spent in Iraq as a waste, but it's not corruption. I don't think the total pocketed money in Iraq due to corruption, if there really was corruption, is anywhere near what happened in Petrobras.
 
This is pretty close to some of the reported corruption thefts in China recently, no?
 
Oh, but so much more than that happened. Shady contracts were given to companies with ties to U.S. administration members, money mysteriously went missing, i.e. "nobody knows" what happened to it, etc. It all adds up to trillions, doesn't it? Or at least tens of billions? Hundreds? I have no idea. I'm just throwing this out there as a potential "bigger corruption scandal" than this.. which it of course wasn't, since nobody in the U.S. seemed to care all that much.
 
This is pretty close to some of the reported corruption thefts in China recently, no?
Was it? I'm not sure. I know China is a very corrupt country as well, but they deal with corrupt people pretty harshly there.

Oh, but so much more than that happened. Shady contracts were given to companies with ties to U.S. administration members, money mysteriously went missing, i.e. "nobody knows" what happened to it, etc. It all adds up to trillions, doesn't it? Or at least tens of billions? Hundreds? I have no idea. I'm just throwing this out there as a potential "bigger corruption scandal" than this.. which it of course wasn't, since nobody in the U.S. seemed to care all that much.

Eh, no. I think you're way off. "Trillions" is the total cost of the war, which as I said is composed by in its vast majority by actual war costs. There's no way the total corruption payments in Iraq amounted to hundreds of even tens of billions. I doubt they even amounted to 1 billion.
 
luiz, why aren't you leaving Brazil (if you haven't already)? I'm curious, corruption on this scale seems to plague all parts of Latin America (Brazil, Argentina, Venezuela, Mexico.) Why aren't people in the streets demanding the resignations/heads of Kirchner, Maduro, and Rousseff?
 
luiz, why aren't you leaving Brazil (if you haven't already)? I'm curious, corruption on this scale seems to plague all parts of Latin America (Brazil, Argentina, Venezuela, Mexico.) Why aren't people in the streets demanding the resignations/heads of Kirchner, Maduro, and Rousseff?

Actually, he did. I think he lives in Chile right now.

I left for Chile in 2010 after the Brazilian people decided they wanted some more corruption and economic decadence. Since then I've spent some time in Scotland and am now living in the US of A since September 2013.

As for people on the streets demanding resignations, in all fairness that has happened in Brazil since at least 2013. Dilma is hated by nearly 50% of the population, including virtually all educated people. Unfortunately the PT has the loyalty of a group about the same size, concentrated on the poor, backwards and illiterate Northeast, but also present in the slums and peripheries of the richer cities of the Center-South. Last election Dilma only won by a 1% margin, and that was after the dirtiest; most illegal campaign in democratic times.
 
luiz, I've done some digging and the U.S. claims that $8 billion was "lost" in Iraq. I thought it was a much higher number than that.

I just think that if you figure in the shady contracts, you'll find more than $20 billion of corruption there.. easily.

Well $20 billion is the lower estimate of what was stolen from Petrobras in the last 12 years. It's certainly much closer to $50 billion.

The $8 billion that disappeared in Iraq is certainly a very respectable sum, but whoever pocketed it are still rookies compared to the Workers' Party. The Cosa Nostra are rookies compared to the Workers' Party. They redefined what it means to be a crook, and the whole world of criminality is forever changed.
 
Thread is not about FIFA, I am disappointed.
 
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