In the latest development in the Brazilian investigation into Petrobras, on 19 June 2015, Brazilian police arrested Marcello Odebrecht and Otavio Azevedo, the CEOs of Brazilian construction giants Odebrect SA and Andrade Gutierrez SA, respectively. It is alleged that the executives knew that their companies paid bribes to politicians that totalled 710 million reales ($230 million).
Petrobras is being investigated by the Brazilian authorities, as well as the US Securities and Exchange Commission and the US Department of Justice. The scandal centres around allegations that several executives at the state-owned oil company helped exaggerate the value of Petrobras’ contracts with several construction companies and paid 3 percent commissions to politicians to keep the deal secret.
The Brazilian investigation, which is the largest in the country’s history and has involved the indictment of more than 40 executives, has sent shock waves through Brazil. Announcing the latest arrests, a police spokesman said the operation sent a "clear message" that Brazilian authorities are trying to end Brazil’s culture in which historically the rich and powerful have been able to break the law without fear of reprimand.
The scandal also threatens to have a further significant financial impact on Petrobras, in addition to the $7bn loss attributed to it in the 2014 financial year. On Friday 10 July 2015, US Judge Jed Rakoff dismissed Petrobras’ attempts to have a class-action brought by shareholders dismissed, rejecting Petrobras’ argument that it itself is a victim. Petrobras now faces a $98bn lawsuit, which will commence as early as February 2016.