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Latino Daily News

Thursday July 24, 2014

Brazilian Court Exonerates Rousseff From Petrobras Refinery Deal

Brazilian Court Exonerates Rousseff From Petrobras Refinery Deal

Photo: Dilma Rousseff

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Brazil’s federal audit tribunal said Wednesday that President Dilma Rousseff bore no responsibility for state-controlled oil giant Petrobras’ ultimately disastrous acquisition of a U.S. refinery in 2006.

Rousseff, who was serving as chief of staff for then-President Luiz Inacio Lula da Silva, sat on the Petrobras board at the time of the deal.

Investigating magistrate Jose Jorge de Vasconcelos Lima concluded that company executives misled board members about the potential risks and benefits from the transaction.

Petrobras paid $360 million for a 50 percent stake in a Pasadena, Texas, refinery in 2006, a year after Belgium’s Astra Transcor Energy had acquired a full interest in the facility for $42.5 million.

Terms of the contract that were not brought to the board’s attention at the time the deal was under consideration forced Petrobras to shell out an additional $820 million for Astra’s remaining stake several years later.

The company’s current CEO, Gra├ža Foster, told the financial oversight committee of Brazil’s Congress that Petrobras lost around $500 million in the deal, though government opponents say the true figure could be $1 billion.

In his report, the TCU’s Lima placed the blame on Foster’s predecessor, Jose Sergio Gabrielli, and several other current and former Petrobras executives.

Lima said that if found guilty of wrongdoing, the executives should be required to pay Petrobras $792.3 million and he urged that their assets be attached to ensure payment.

Gabrielli and the others have 15 days to present arguments to the TCU.

Brazil’s Congress has named a special committee to scrutinize Petrobras’ transactions in recent years and the scandal represents a potential threat to Rousseff’s bid for a second term in the October elections.

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