Brazilian CEO to Sign Plea Deal in Petrobras Case

The head of Brazilian construction firm UTC Engenharia will sign a plea bargain deal with prosecutors, newspaper Folha de S. Paulo said on Wednesday, making him the highest-level executive to collaborate with a corruption probe at state-run oil company Petrobras.

Prosecutors say Ricardo Pessoa led a cartel of some 20 firms that allegedly fixed prices on bids for projects and overcharged Petroleo Brasileiro SA, as the oil major is formally known, on contracts. Excess funds enriched executives, politicians and political parties, the prosecutors say.

Pessoa agreed to collaborate with the investigation and is expected to name senior politicians who allegedly took bribes, Folha reported without naming any sources.

The federal prosecutor's office said it could not confirm a plea deal with Pessoa. An aide to prosecutor general Rodrigo Janot said he could not comment on any agreement until it had been approved by the Supreme Court.

The deal, if confirmed, would signal the 14-month-old case is moving from the southern city of Curitiba, where money launderers and engineering executives are on trial, to the capital Brasilia, where a separate team is investigating 34 sitting politicians.

Elected officials enjoy special legal protection in Brazil and must be tried before the Supreme Court in Brasilia. President Dilma Rousseff was not implicated and denies knowledge of the scheme, but the treasurer of her party was jailed in Curitiba and her popularity has slumped as a result.

Folha said Pessoa would travel to the capital on Wednesday and had agreed to pay a fine, thought to be around 55 million reais ($18 million), and reveal what he knew about the scheme.

Pessoa's lawyer, Alberto Toron, did not answer calls. He told Reuters in March that Pessoa was negotiating with prosecutors in Curitiba but was reluctant to admit guilt, the first step in a plea deal. Folha said negotiations in Curitiba had failed.

Toron had contested the preventive detention of Pessoa, who was jailed in November before prosecutors formally charged him. The Supreme Court last month sided with Toron and released Pessoa from jail into house arrest along with eight other executives.

That was considered a blow to federal judge Sergio Moro, who has sought to keep defendants in jail while investigations continue.

The Petrobras case to date was largely built around 18 plea bargains, the majority approved by Moro but some by the Supreme Court.

(Reporting by Caroline Stauffer and Anthony Boadle)