Panama bars Odebrecht from tenders after bribe allegations

PANAMA CITY - Panama's government is barring the Brazilian construction giant Odebrecht from future public tenders after the US Justice Department accused the company of using bribes to secure business in Latin America.

A sign of Brazilian construction company Odebrecht at the Olympic and Paralympic Village in Rio de Janeiro, Brazil

In a statement read by the minister of the presidency, Alvaro Aleman, the government said it has decided to "take the steps necessary to prohibit the Odebrecht Group being awarded... any future contract from public bidding processes."

The contract ban will last until Odebrecht demonstrates full cooperation with an investigation by prosecutors, and pays Panama for damages, he added.

Aleman also warned that Panama will take measures to ensure Odebrecht leaves bidding processes for which it had already been cleared. They include a new line of the Panama City metro and a fourth bridge over the Panama Canal.

Panama also will scrap "at no cost to the state" a hydroelectric dam project that would have had the company and government work together, he added.

The announcement came the same day Panamanian prosecutors flew to the United States seeking information about alleged Odebrecht bribes to officials of the Central American country.

The US Justice Department recently reported that Odebrecht had paid bribes worth hundreds of millions of dollars to obtain contracts in nine Latin American countries.

It said the construction company paid more than $59 million in bribes to Panama between 2010 and 2014 to obtain contracts valued at $175 million.

Panama's auditing office said it is investigating Carlos Ho Gonzalez, a former public works official. And people still on the job who have seen potentially suspicious income surges may also be investigated, according to the government.

Two sons of former president Ricardo Martinelli have denied Brazilian newspaper reports that they had received $6 million intended as a bribe from Odebrecht for their father.

Martinelli lives in voluntary exile in Miami. The Panamanian government has requested his extradition on allegations of espionage and corruption.

In Brazil, Odebrecht -- a home-grown giant turned massive multinational -- has figured prominently in the graft allegations and investigations that helped bring down the last president, Dilma Rousseff, and plague the current government.

Dozens of Brazilian politicians have been accused of taking bribes from Odebrecht and other construction companies to line their own pockets and boost party campaign funds in exchange for facilitating inflated contracts for the companies with Petrobras.