Brazilian graft probe puts Swedish firm AF under microscope

March 22, 2019

By Christian Plumb

SAO PAULO (Reuters) – The arrest of a former Brazilian president on corruption charges is raising questions about how a Swedish consulting company won a contract to help build a nuclear power plant at the center of what prosecutors say was a massive bribery and kickback scheme.

The company, now known as AF Poyry, on Thursday became the latest in a series of multinationals caught up in Brazil’s sweeping “Car Wash” investigation, which has ensnared politicians as well as executives in businesses from oil trading to engineering and shipping.

In a statement, the company defended its 2011 victory in the bidding contest for work on the Angra 3 nuclear reactor on the Rio de Janeiro coast, saying it had beaten out three international competitors.

The consultancy, which was known as AF before it acquired a smaller Finnish peer, said it has “zero tolerance for fraud, bribery and corruption,” but declined to comment on the Brazilian investigation.

AF has not been formally accused in the probe, but at least two of its executives were cited in court filings on Thursday which accused former Brazilian President Michel Temer of running a scheme to extract some 1.8 billion ($470 million) in bribes related to the Angra nuclear power complex.

Temer, the leader of one of Brazil’s largest political parties before becoming vice president in 2011, took over from former President Dilma Rousseff after her impeachment in 2016. He was succeeded by President Jair Bolsonaro at the beginning of 2019. Temer has repeatedly denied any wrongdoing.


Work on the Angra 3 reactor has advanced in fits and starts since the 1980s amid cost overruns and allegations of politically-driven decisions.

Among those targeted for arrest was Carlos Jorge Zimmermann, AF’s main Brazilian representative when it won the contract for Angra 3, who pushed for the inclusion of a Temer-linked company in the bidding consortium, prosecutors said.

They cited evidence that former Eletronuclear CEO Othon Luiz Pinheiro da Silva, a retired admiral who has previously faced a number of bribery charges, had determined years before the 2011 auction that AF should win the bidding contest.

Pinheiro da Silva, according to a charging document filed by prosecutors, was a political appointee of Temer. A law firm representing Pinheiro da Silva did not immediately return a phone call seeking comment.

Under pressure from Temer and his allies, the Eletronuclear CEO allegedly pushed for an architectural and engineering firm known as Argeplan with no background in building nuclear plants to be a partner in the AF-led consortium.

Argeplan, whose main experience was building metro stations in Sao Paulo, served as a vehicle for at least 2.4 million reais in cash bribes to Temer, prosecutors said.

Argeplan representatives could not immediately be reached for comment.

AF Consult and its Brazilian unit, which had only three civil engineers on its payroll when it won the Eletronuclear contract, only hired Argeplan to guarantee that it would win the bid, prosecutors said.

“The investigations show that the hiring of AF Consult do Brasil, in partnership with Argeplan, was solely designed to permit the payment of undue advantages to Michel Temer’s group,” they wrote in the court documents.

AF Poyry said independent auditors hired by Eletronuclear, a unit of Brazilian state-controlled utility Centrais Eletricas Brasileiras SA, had “dismissed any wrongdoing in the contract.”

(Reporting by Christian Plumb; Additional reporting by Helena Soderpalm in Stockholm; Editing by Paul Simao)

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