The two legal issues in the scandal were (1) the involvement of the President of the country in the million dollar scam and (2) a secretly created cartel which was being used by the construction executives to coordinate the bids on Petrobras contracts and overcharge the company in a systematic manner. There are two important ethical issues in the case. The first ethical issue is the involvement of the Petrobras employees allowed the construction company to charge high amount from Petrobras. Second issue is that Petrobras is partially owned by the State. The construction companies sent personal gifts to politicians and they accepted them.
Free competition stands for the freedom to produce and trade. In the free competition, there would be no control of the specific producer or the group of producers. The individual will not have any rights to decide the price of the goods and services (Gershon, 2013). In terms of the economic and ethical view of this scandal, the free competition would have been helpful in avoiding such scandal. People would unable to charge high amount from the company. Political leaders would have no ability to fill their pockets.
The ordinary Brazilians were affected by the Scandal, as billions of people are shareholders in the company.This scandal have affected them financially. The Brazilian elites retained their advantage and acquired more wealth, while the labour class people still face significant problems. This scandal gave rise to income inequality and encouraged corruption (Connors, 2016). Since the investigation of the scandal reached the former President and political leaders, I also raised the question about political stability in the country. The money of this Public organization was used for the election campaigns and the renovation of the house of ministers. This scandal made Brazilian economy to suffer a lot and increased unemployment。
There is a significant link between the directors of the Petrobras and the government officials, as the corrupt officers of the company make the manipulations in the bids. The construction people involved in the case charged outrageous amount of money from the company. The internal employees paid a high percentage of this amount to government officials. However, 64% of the shares of company are controlled by government.