After Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR); Brazil Unveils Dozens Other Multibillion-Dollar Tax Shams

The haunting sight of the biggest graft sham of Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) in Brazil is not yet over; as a range of other firms in the country have come under the microscopic lens of the investigating agencies. Dozens of companies in the countries have been alleged of bribing the tax officials with an amount worth $5.9 billion.

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Storm doesn’t stop for Brazil

Brazil, which is facing the biggest storm of its economy, after the gigantic $3.8 billion graft scandal involving the contracts of Petrobras and construction companies, is soon to experience yet another typhoon. After a range of big names being implicated, the typhoon of corruption doesn’t seem to halt in the country.

Operation Zeal: The New Humiliation

This new scandal is called Operation Zeal and it opened up after the federal police investigation in the suspected scam at the offshoot Brazilian tax authority, CARF. This authority is responsible for overlooking the appeals made on tax disputes.

The police claims that CARF managed to seek the tax appeals Board verdicts in the favour of the alleged companies by either ignoring them completely, or slashing their penalties. The officials, in return, got bribes from around 70 companies. According to the police, the win-win kind of a situation was created so as to benefit CARF as well as these companies.

The Brazilian Police, in the statement, said that the probe was kicked off in 2013. This explained that CARF acted within this body which sponsored the private interests of these companies. In the meanwhile, the police explained, the organization sought to corrupt and influence the advisers under the viewpoint of either reducing or cancelling the penalties.

The police said that if the task would have been done properly, it would have penalized the companies with an amount of approximately 19 billion reais or $5.9 billion. However, according to the evidences, as of now, only 1/3rd of this amount has been uncovered. Interestingly, this amount is more or less equal to the one involved in Petrobras scam.

All these alleged companies have made use of a range of other front firms in order to hide under the cover.

About the Author

Coper graduated from the University of Chicagi with majors in political science and journalism.

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