Brazil's Eletronuclear investigated for corruption

30 July 2015

The president and CEO of Brazilian nuclear utility Eletronuclear, Othon Luiz Pinheiro da Silva, has been arrested in connection with construction contracts for unit 3 of the Angra NPP as part of a wider corruption investigation. Electronuclear's parent company Eletrobras confirmed the arrest. Brazil's Federal Police said its most recent acivity focused on contracts signed by companies already listed in the 'Operation Jet Wash' investigation.

The 1270MWe Angra 3 pressurized water reactor was ordered from Germany's Kraftwerk Union in the 1970s but never built, despite the delivery of many components, which were housed in a special storage facility at considerable expense. The project was re-launched in 2009 and construction restarted in June 2010 managed by Eletrobras. Areva was contracted to lead the nuclear part of the project. Civil construction was undertaken by two Brazilian consortia: 'UNA 3' (Andrade Gutierrez, Norberto Odebrecht, Camargo Correa and UTC Engenharia) and 'Angra 3' (Queiroz Galvão, EBE and Techint). All these firms were included in the latest police investigations, local media reported.

In April, Eletrobras said its internal supervisory board had found "no irregularities" in the contracting for Angra 3, noting that its Board of Directors had "approved the hiring company specialized to carry out research to ensure transparency and necessary independence, in accordance with Brazilian and US law." Eletrobras said then that Pinheiro da Silva had "requested leave of absence in order to guarantee the independence and transparency of the research to be performed." However, Prosecutors began an investigation of charges that he had taken more than $1.3m in bribes between 2009 and 2014 related to the contracts with construction companies building Angra 3.

Pinheiro da Silva, a nuclear engineer educated at the Massachusetts Institute of Technology, has long been a vocal defender of developing Brazil's nuclear capabilities. During the military dictatorship, which lasted from 1964 to 1985, he oversaw a parallel nuclear programme focused on developing reactors for submarines.

Eletrobras said it's seeking information on the case while it continues an independent internal probe led by law firm Hogan Lovells US LLP on operations including the Angra 3 nuclear plant. Earlier this month Eletrobras was sued in the US by shareholders claiming it failed to disclose that Silva was caught up in the bribery allegations.

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