By Brad Brooks
CURITIBA, Brazil (Reuters) - A long-anticipated plea bargain deal with the construction firm at the center of Brazil's largest graft scheme is at least "months" away and could fall apart due to interference by fearful politicians, a top prosecutor told Reuters.
Construction firm Odebrecht SA [ODBES.UL], the largest in Latin America, is accused of being the main corporate driver behind the long-running massive political kickback scheme at state oil company Petrobras.
Local media reports of a nearly final plea bargain have heightened expectations of an impending political bombshell. If top Odebrecht executives turn state's witnesses, they could implicate scores of politicians who took bribes.
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"There is no signed deal. There is no agreement. There are many details large and small to work out," said Carlos Lima, a lead prosecutor in the sprawling kickback probe focused on Petrobras, formally known as Petroleo Brasileiro SA Petrobras.
"All these negotiations are extremely complex and they take a long time to finalize because they involve many facts, many people," Lima said on Thursday in an interview at his office in the southern city of Curitiba, where federal police, prosecutors and a crusading judge have led Brazil's anti-corruption fight.
Lima emphasized repeatedly there "is no agreement with Odebrecht, neither with the individuals nor a (leniency) deal with the company."
Lawyers for Odebrecht said in an email they could not talk about the ongoing negotiations with prosecutors.
Graft took place not just in Brazil, but in several other Latin American nations and in Africa where the company has infrastructure projects, some of which are already under investigation, according to investigators.
Marcelo Odebrecht, the firm's former chief executive officer, is serving a 19-year jail term after he was convicted of corruption this year.
For months after his arrest last year, Odebrecht steadfastly refused to consider turning state's witness.
Prosecutors made clear that if he remained silent, they would dismiss any deal for dozens of company executives or the firm itself.
Before he was sentenced this year, Marcelo Odebrecht told lawmakers running a congressional probe into the Petrobras scheme that "to snitch, you have to have something to snitch."
He added that if one of his children had done something wrong, "I'd maybe have more of a problem with the one who snitched than the one who did it."
NOT MUCH CONFIDENCE
The company quickly changed its tune. In March police discovered through documents and records on executives' mobile phones that the company had created a department devoted to tracking billions in bribes paid out to politicians over the years in return for winning bloated government contracts.
The company announced it was willing to cooperate "to help build a better Brazil."
Odebrecht is further motivated to strike a leniency agreement because like other construction firms involved in the Petrobras scheme, it is blocked from winning any government contracts.
Also, credit has dried up and the company is trying to restructure over 100 billion reais ($31.69 billion) in debt.
That led Marcelo Odebrecht's father Emilio, the former CEO, to push his son to strike a deal with prosecutors, according to two government sources.
Lima would not discuss details about the negotiations. While he said he is more optimistic now than a few months ago over a deal, he issued a warning.
"I cannot say I have great confidence that any deal will be reached because we're living with incredible institutional instability," he said. "I don't know how much interest there is on the part of the federal government that these types of deals are reached."
"A good chunk of what is discussed in these negotiations, not just with Odebrecht, involves politicians who are or were active in government."
Critics have blasted new President Michel Temer's government and congressmen from his Brazilian Democratic Movement Party for trying to weaken the independence of corruption probes in an attempt to protect corrupt officials.
Lima pointed to the updating of a 1965 dictatorship-era "Abuse of Authority Law" proposed by Senate leader Renan Calheiros, who is under investigation in the Petrobras graft scheme.
The law would hold judges and investigators criminally liable if a high court overturns a decision ordering the imprisonment of a suspect or dismisses charges. The measure is currently in the Senate in a Congress dominated by Temer's party and its allies.
Federal judges and prosecutors have held protests in recent weeks against the law, saying it is a direct threat against pursuing suspects in the growing number of complex corruption cases surfacing in Brazil.
"It's really simple. They are trying to discourage people from investigating and to impede new cases," Lima said. "Why would someone stick their neck out to investigate and be punished if they would make the same salary by doing absolutely nothing?"
(Editing by Jeffrey Benkoe)