MAPUTO, Mozambique’s anti-graft agency, the Central Office for the Fight Against Corruption (GCCC), has brought to the Maputo City Court the case of the 800,000 US dollar bribe paid by the Brazilian aircraft company, Embraer, in 2009 to ensure that State-owned Mozambique Airlines (LAM) purchased two of its aircraft.

In connection with the bribe, the GCCC is charging three people with money laundering and illicit participation in business — the then transport minister Paulo Zucula, the then LAM chairperson Jose Viegas, and the man who set up a shell company to receive the bribe, Mateus Zimba, then the manager in Mozambique for the South African petrochemical company, Sasol.

The three men were arrested in December but released on bail, which was set at a total of 14.5 million meticais (about 246,000 US dollars) — five million meticais for Zucula, six million for Zimba and 3.5 million for Viegas.

The Embraer bribe came to light thanks to investigations by Brazilian and United States prosecutors into Embraer’s business practices. Embraer confessed to paying bribes to secure contracts in several countries, including Mozambique. Embraer reached settlements with the US and Brazilian authorities and paid fines totalling around 225 million US dollars, and giving full details of the bribes.

From the documents of the Brazilian Federal Prosecutor’s Office, it was Viegas who negotiated the size of the bribe. He insisted that the deal would not go ahead without a bribe.

When Viegas was told that Embraer did not have that sort of money to pay for what would be passed off as consultancy services, he suggested simply increasing the price of the aircraft. Instead of the original price of 32 million USD, each aircraft would cost 32.69 million dollars and this was the price in the sales agreement between Embraer and LAM signed on Sept 13, 2008.

Viegas is thus accused of betraying his trust as LAM chairperson by artificially inflating the price of aircraft purchased by the company. Zimba was the middleman. He set up a shell company called called Xihevele, registered in SAPound o Tome and Principe, for the sole purpose of moving the money from Embraer to the recipients of the bribe. Embraer paid the bribe, disguised as sales commissions, in two instalments of 400,000 dollars each to a Xihevele bank account in Portugal.

On 22 April 2009, Embraer signed a commercial representation agreement with Xihevele. The stated purpose of this company was to promote the sale of E-190 aircraft to LAM, even though LAM had already signed the purchase agreement. Xihevele had not existed during the negotiations between LAM and Embraer. The Brazilian prosecutors’ document noted that the contract with Zimba’s company falsely stated that its sales promotion work began in March 2008.