Second ex-Petrobras chief charged in widening graft case

Brazilian prosecutors charged Monday a second former head of Petrobras with massive corruption while leading the scandal-plagued state oil giant, sending its shares plummeting to a decade low.
Nestor Cervero and three accomplices were charged with receiving a total of $40 million in bribes in 2006 and 2007 to help speed up a lucrative deal on deep-water probes for offshore exploration in Africa and Mexico.
"After discussions and the promised bribe payment confirmed, Cervero took the steps that were needed to ensure the probe deal went through," says the charge sheet in Parana state, where the investigation is being carried out.
Cervero, who was not immediately detained, is the second Petrobras chief to be charged in a widening graft probe following the arrest nine months ago of Paulo Roberto Costa, formerly a Petrobras director of supplies. Costa is under detention at home.
Petrobras shares quickly slid to their lowest level in a decade, shedding 2.05 percent at the close in Sao Paulo. Common stock was down 9.94 percent to 8.53 reais, while preferred stock lost 9.10 percent to hit 9.18 reais.
Under the alleged corruption scheme, companies which won contracts including illicit surcharges of between one and six percent of the deal would pass the cash on to intermediaries who would set up front firms.
Those front companies would produce bogus contracts, services and consultancy services, with the money laundered through those firms.
Police estimate that overall the corrupt network managed to launder around $3.8 billion.