May 3 Fallout from a series of corruption probes
involving Brazilian construction firm Odebrecht S.A. is slowing
down infrastructure development and creating negative spillovers
across Latin America, Moody's Investor Service said on Wednesday
in a report.
Odebrecht is at the heart of Brazil's bribery and kickback
probe, known as Lava Jato or Car Wash, which has been linked to
hundreds of politicians and public figures and cited as among
the factors leading to the impeachment of former President Dilma
"Several infrastructure concessions have been halted and
will need to be re-launched as a result of the Odebrecht
corruption scandal," Moody's Vice President Adrian Garza said in
the report. "The legal and administrative hurdles for these
projects will likely take another 12 to 24 months."
Moody's also said it expects that the resulting slowdown in
the execution of projects will delay the pace Latin American
countries are able to grow their infrastructure, making it
difficult to reduce the region's sizable infrastructure gap.
The company has admitted to paying $788 million in bribes to
government officials in 11 countries beyond Brazil, including
nine in Latin America, according to the Moody's report.
Brazilian President Michel Temer has been accused of hosting
a 2010 meeting where an Odebrecht executive was asked to arrange
a $40 million illegal payment to his political party. Temer has
dismissed the graft accusation.
Former Peruvian President Ollanta Humala also has been
accused of taking illicit funds from the company as have a
number of high-ranking politicians from across the region.
(Reporting by Dion Rabouin; Editing by Christian Plumb and