SAO PAULO, Jan 7 (Reuters) - An internal investigation of potential corruption at Brazil’s state-run energy utility Eletrobras has expanded to include five more Brazilian hydroelectric dams, a source with access to the probe said.
Lawyers investigating possible violations of U.S. and Brazilian anti-corruption laws hope to finish their work in March in order to deliver a delayed financial report to U.S. regulators, and their findings could impact Eletrobras’ second-quarter balance sheet, the source said.
Eletrobras, formally known as Centrais Eletricas Brasileiras SA, hired U.S.-based law firm Hogan Lovells and Sao Paulo-based WFaria Advogados as well as three independent commissioners to assess possible graft involving Eletrobras and private construction firms in Brazil.
Kroll, a U.S.-based risk consulting firm, more recently joined the investigatory commission, the source said. Kroll did not respond to a request for comment. Eletrobras said it would only comment on the internal investigation when it was concluded.
The number of people under investigation has increased as new projects are added, the source said.
Prosecutors say construction companies accused of overcharging state-run oil firm Petrobras for work and passing on excess funds as bribes repeated the scheme at the smaller Eletrobras, adding to the economic toll corruption has wrought on Brazil’s economy over the past decade.
The commission has not cleared the four initial projects Reuters learned were being investigated in September: Angra 3 nuclear power plant and Amazon dams Belo Monte, Jirau and Santo Antonio, the source said, declining to name the five new dams.
The source did not estimate or confirm possible corruption losses but said a graft write-off was “very probable, considering what is already in the media about Eletronuclear.”
Othon Luiz Pinheiro da Silva, formerly chief executive of Eletrobras subsidiary Eletronuclear, is on trial in Rio de Janeiro for corruption and money laundering. He has been charged with taking 4.5 million reais ($1.1 million) in bribes related to the Angra 3 plant.
Eletrobras booked a 3.39 billion real impairment charge on Angra 3 in its third-quarter 2015 earnings, citing deteriorating economic conditions in Brazil rather than corruption.
Petrobras wrote off $2.1 billion in graft losses in April.
Shares of both Petrobras and Eletrobras trade on the New York Stock Exchange and are subject to the U.S. Foreign Corrupt Practices Act, which aims to prevent graft by companies linked to the United States.
$1 = 4 reais Reporting by Caroline Stauffer; Editing by Phil Berlowitz