Swiss arrest Brazilian suspected in Petrobras scandal

The Petrobras scandal involves taking kickbacks for the construction of oil platforms and drilling vessels Keystone

A Brazilian national has been arrested in Geneva in connection with a massive price-fixing scandal at Brazil’s state oil company Petrobras, according to Swiss federal prosecutors.

The man had come to Switzerland to withdraw funds and take them out of the country. He was arrested while closing an account at a Geneva bank, prosecutors said.

He is suspected of involvement in the payment of bribes to former Petrobras executives and is being held in custody in Switzerland for three months because of a risk of collusion and flight.

The Swiss Office of the Attorney-General in Bern has been working with Brazilian authorities since March 2015 to investigate Petrobras in response to allegations of bribery and money laundering – allegations implicating the owners of some 300 Swiss bank accounts. The case is thought to be one of the largest corruption scandals in Brazil’s history.

Specifically, Petrobras executives are suspected of accepting bribes from the Odebrecht construction company, paid via the Swiss accounts, in exchange for charging inflated prices for contracts. The contract payments were then skimmed, with the extra going to Brazilian politicians.

As the investigation heated up a year ago, Switzerland froze $400 million (CHF395 million) in assets across more than 30 banks, of which $120 million was released for repatriation to Brazil.

In October 2015, Switzerland opened criminal proceedings against Eduardo Cunha, the speaker of Brazil’s lower house of Congress. Cunha was accused of receiving payoffs relating to contracts to build two drilling vessels for Petrobras.

Earlier this week, campaign aides to Brazilian President Dilma Rouseff were also arrested in connection to the Petrobras scandal, which has damaged her government’s reputation and spurred large protests in Brazil last year.