Brazil’s Corruption Probe Causing Paralysis, GE’s Rice Says

Author(s): David Biller | Date: August 22, 2016 | Language: English
Source: http://www.bloomberg.com/ | URL: http://goo.gl/ksFUmC | Type: text

Brazil’s two-and-a-half-year investigation of construction companies is hampering new infrastructure in Latin America’s biggest economy and the wider region, where Brazilian builders have a dominant presence, said a top executive at General Electric Co.
“There’s a certain amount of paralysis that exists now because of Carwash, and the damage of continuing that for years and years would probably be significant,” GE Vice Chairman John Rice said in an interview in Rio de Janeiro. “There is a penalty that comes with continuing it forever.”
While opinion polls show Brazilians massively support the so-called Carwash investigation, the scandal of kickbacks at state-controlled companies has had an impact on a wide range of infrastructure projects and on employment. More than 200 people including top executives have been indicted, and 16 construction companies have been charged, with some seeking bankruptcy protection.
The scandal contributed to about 675,000 construction job losses in Brazil since 2014, worsening what is projected to be the country’s deepest two-year recession in more than a century. It also tarnished Brazil’s main political parties who allegedly benefited from the scheme for years.

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