On July 5, 2022, the Inter-American Development Bank announced the 18-month debarment of construction and engineering company Construcap CCPS Engenharia e Comércio S.A. for engaging in corrupt and fraudulent practices in connection with its work on the Mario Covas Rodoanel Project – Northern Section in Brazil.
IDB and Construcap signed a Negotiated Resolution Agreement in which Construcap admitted that it made approximately $1 million in illicit payments between 2013 and 2015 to a public official involved in the “supervision and management” of the project. According to an investigation conducted by IDB’s Office of Institutional Integrity (OII), the public official demanded the improper payments through a designated subcontractor. A Construcap manager authorized the improper payments “based on the impression” that failing to pay the bribes would result in unjustified delays in approvals for contract-related disbursements. The OII also found that Construcap concealed the illicit payments by misrepresenting certain project expenses and activities.
According to the IDB, after an investigation by Brazilian enforcement authorities was launched, Construcap conducted its own investigation into the incident. The company voluntarily and promptly disclosed its factual findings to Brazilian authorities, and ultimately agreed to pay restitution and fines of R$3.8 million to resolve the Brazilian enforcement action. In light of this settlement and the company’s cooperation with OII, IDB stated that it imposed a “significantly reduced sanction.”
The debarment makes Construcap ineligible to participate in projects and operations funded by the IDB and other multilateral development banks. Under the terms of the settlement, Construcap also agreed to continue its full cooperation with the IDB and provide reports on its compliance program to the IDB “through an independent compliance consultant.” If Construcap fails to meet its settlement obligations, the debarment will continue until the conditions are met or for 6 years and 6 months from the effective date of settlement, whichever comes first.