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Peru detains top executives in Odebrecht probe

By BNamericas Monday, December 04, 2017

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A Peruvian judge detained billionaire José Graña and executives from three local construction firms as the Odebrecht corruption scandal continues to sweep up some of the country's most powerful figures.

José and Hernando Graña of Graña y Montero (GyM), Fernando Camet (JJ Camet) and José Castillo (ICCGSA) will all be detained for 18 months in "preventative custody" on charges including money laundering and collusion in bribes paid to government officials by their partner Odebrecht, the special prosecutor's office said via Twitter on Monday.

The executives were detained as there is a possibility they would flee the country, judge Richard Concepción said in broadcast comments. Former GyM chairman Gonzalo Ferraro will be placed under house arrest for health reasons. Police led the Grañas, Camet and Castillo, some of the wealthiest men in Peru, to a detention center in handcuffs.

Brazil's Odebrecht, which in December 2016 admitted to paying hundreds of millions of dollars in bribes to secure contracts across Latin America, has been involved in Peru's largest infrastructure projects including the southern gas pipeline, the inter-oceanic highway (IIRSA), the Olmos and Chavimochic irrigation ventures and power plants.

The five men face prison sentences of 6-11 years on charges they took part in Odebrecht's alleged US$20mn bribery scheme involving former president Alejandro Toledo in exchange for the IIRSA contract. Peru in February issued an international arrest order for Toledo, who has refused to return from the US to stand trial. All three companies and Toledo deny any wrongdoing.

The prosecutor's office said Gustavo Salazar, president of the exclusive country club Regatas, who also faces charges of involvement in Odebrecht's bribery dealings, fled the country earlier this year before he could be detained.

"The accused belong to the most prominent business class in Peru," special prosecutor Hamilton Castro said during a public hearing. "Today, Peru bears witness to how the judicial system treats all citizens of this country with the same measuring rod."

José Graña and other top GyM executives resigned in February after allegations by Odebrecht that its partners were aware of the payment of bribes sent GyM's shares tumbling.

LAVA JATO

President Pedro Pablo Kuczynski in March ordered Odebrecht to pull out of Peru after the company admitted to having paid at least US$29mn in bribes to Peruvian officials between 2005 and 2014. Peru awarded Odebrecht over US$16.9bn in 23 contracts from 1988-2015.

The scandal has already led to the detention of former president Ollanta Humala and former transport ministry officials and a ban on former Lima mayor Susana Villarán from leaving the country. Former President Alan García, presidential candidate Keiko Fujimori and Lima mayor Luis Castañeda are also being investigated.

Kuczynski, meanwhile, who is accused of acting as an advisor to Odebrecht as part of investment banking entity First Capital Partners in 2006, said he will send written replies to questions from a congressional panel investigating the Odebrecht case known as Lava Jato. Kuczynski, who served as Toledo's finance minister and later cabinet chief until July 2006, has denied the accusations.

"President Pedro Pablo Kuczynski ratified his total willingness to respond to the Lava Jato committee in congress," the presidential office said in a statement. "He sent two reports that confirm he is not obligated to appear before a congressional investigative committee during his mandate."

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