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.
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?
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.
http://www.ft.com/cms/s/0/98674a12-a6d5-11e4-9c4d-00144feab7de.html#axzz3Q8IatlnGPetrobras 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 worlds 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 Brazils 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 Brazils investment-grade status. With more than $135bn in gross debt as of the end of September, Petrobras ranks as the worlds 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 Brazils 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, Petrobrass 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 Brazils wider economy. While the countrys 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 worlds 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 Brazils 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.
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?