Grupo Aval Will Pay $80 Million USD to Resolve Odebrecht Investigations by US and Colombian Authorities
Corficolombiana, a Colombian financial services company majority-owned and controlled by Grupo Aval, will pay more than $80 million USD to resolve bribery investigations related to the region-wide Odebrecht scandal being conducted by authorities in both the United States and Colombia.
Photo: Colombian Attorney General Francisco Barbosa Delgado speaks to the press after the resolution was announced. (Credit: Fiscalía)
According to the US Department of Justice (DOJ), which announced the resolution of the charges earlier this month, Corficolombiana “conspired” with disgraced Brazilian construction giant Odebrecht to make illicit payments of more than $23 million USD to win favor with Colombian officials involved in the Ruta del Sol 2 highway project.
Specifically, between 2012 and 2015, the two firms were attempting to win a contract to build a 328-mile stretch of this major roadway that would be built in the northeast department of Norte de Santander, revealed the US investigators.
Resolving the Odebrecht Investigation
In resolving the investigation, the financial group acknowledged, as a whole, having carried out illicit actions in conjunction with Odebrecht, and Corficolombiana agreed to withdraw its appeals against charges from Colombia’s Superintendence of Industry and Commerce (SIC). It also committed to continue collaborating with both US and Colombian authorities for the next three years in their fight against corruption and economic malpractices.
Additionally, the DOJ agreed to substantially reduce the initial fine of $40 million USD that had previously been sought, per reports.
Grupo Aval released a press statement highlighting that it was not the subject of the US DOJ charges, nor accusations from the US Securities and Exchange Commission (SEC), while noting that the resolution focused on “actions taken by a former Corficolombiana executive” and that both it and Corficolombiana have been working to improve controls since the revelation.
“The DOJ and SEC recognized Corficolombiana’s and Grupo Aval’s extensive cooperation with the investigations and that, in the many years since the events occurred, Corficolombiana and Grupo Aval have enhanced their compliance programs and internal controls,” stated Grupo Aval.
It added that, “Corficolombiana and Grupo Aval consider this painful chapter closed, insisting on their commitment to the highest ethical standards and the continuous strengthening of their control environment.”
The Rotten Tentacles of Odebrecht Spread Wider
On the heels of the Grupo Aval settlement, Colombian Attorney General Francisco Barbosa announced from Washington that Luis Fernando Andrade, former head of the National Infrastructure Agency (ANI), had been indicted, along with 33 past and present government officials plus dozens more individuals, for their role in the Odebrecht scandal.
These two major developments represent just the latest in a near-decade-long scandal that has rocked the entire hemisphere.
Since its illicit activities came to light last decade, the scope and reach of Odebrecht’s corruption has only continued to be uncovered. The Brazil-based conglomerate, which has arms in sectors from construction and infrastructure to real estate and transportation, paid some $788 million USD in kickbacks for more than 100 public construction projects in 11 Latin American countries, as well as in Angola and Mozambique in Africa, according to official figures compiled by German outlet Deutsche Welle.
The enormity and duration of the scandal has only exacerbated the entire region’s outrage against corruption, which costs Latin America around $140 billion USD each year — or some 3% of regional gross domestic product (GDP) — according to Global Financial Integrity, a specialized consulting firm.
The Ongoing Political Fallout in Colombia
Beyond the national anger toward corporate sector corruption, in Colombia, Odebrecht illegal activities have stained some of the highest-ranking politicians, including the 2014 campaigns of both former President Juan Manuel Santos and the candidate he defeated, Óscar Iván Zuluaga, who currently faces criminal charges before the court.
Despite Santos not being implicated by the House of Representatives’ accusation committee, by a vote of six to three, the Procuraduría recently disqualified Roberto Prieto, the manager of his 2014 campaign, from holding office or contracting with the state for 12 years due to charges that he submitted false reports to the National Electoral Council (CNE) about contributions from the Brazilian multinational Odebrecht.
The attorney general also last month indicted former Zuluaga, the hand-picked candidate of powerful former President Álvaro Uribe, for falsifying a private document, procedural fraud, and illicit enrichment of individuals.
While former attorney general Nestor Humberto Martínez has not faced justice, his reputation has been greatly stained as then-head of the nation’s prosecution arm — in addition to his former ties to Grupo Aval. In response to the recent settlement announcement, Colombian President Gustavo Petro publicly chastised his political rival Martínez and described his ties with the Grupo Aval as an “incestuous relationship” that in the end “prevented a transparent trial in the case and the discovery of those bribed, who are currently senior political leaders.”