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LatinNews Daily - 04 July 2018

Brazil’s Eike Batista sentenced to 30 years for corruption

Development: On 3 July Eike Batista, once the richest man in Brazil and one of the wealthiest in the world, was sentenced to 30 years in prison for corruption.

Significance: With the exception of former president Lula da Silva (2003-2011), Batista is the most high-profile and internationally famous of the Brazilians charged as part of the Operation Carwash investigation. Batista’s energy and logistics empire saw his personal wealth rise to over US$30bn at the beginning of the decade, but as his companies started to go bust as debt piled up and insider-trading allegations mounted, he became the world’s first-ever dollar billionaire debtor. Batista’s sentence is the longest handed down in the corruption probe to date.

  • Batista, who is already in jail, was found guilty of authorising over US$16m in bribes to Rio de Janeiro’s former governor Sergio Cabral in exchange for contracts with the state government, such as the construction of the port of Açu in São João da Barra and two thermoelectric power plants in the north of the state. He was also ordered to pay a R$55m fine. Batista’s lawyers say that he intends to appeal.
  • Once championed by the governments of Lula and Dilma Rousseff (2011-2016), who described him as a “model businessman” and “an example to be followed”, Batista’s criminal venture was minutely detailed in a 119-page sentence written by the lead Carwash judge in Rio de Janeiro, Marcelo Bretas. “Precisely because he was a world-famous businessman, his criminal business practices were potentially capable of contaminating Brazil’s business environment and reputation, causing deep scars to the confidence of investors and entrepreneurs who, in the recent past, saw Brazil as a good investment option,” he wrote.

Looking Ahead: Batista has come back from disaster – and bankruptcy – before, but it’s hard to see a comeback this time. Historically, those convicted of corruption in Brazil have little trouble returning to public life or business success. However, the sweep of Operation Carwash is such that those convicted by its investigative judges may struggle to rehabilitate their reputations.