One of Brazil’s most senior businessmen, Marcelo Odebrecht, was sentenced to 19 years and four months in jail on Tuesday for alleged corruption at state oil company Petrobras in a landmark decision expected to add to pressure on president Dilma Rousseff.

Brazil’s currency, the real, strengthened 0.8 per cent against the dollar to R$3.7549 amid hopes the conviction of the construction boss, an important political donor to Ms Rousseff and her predecessor Luiz Inácio Lula da Silva, will hasten the collapse of a government that markets blame for the country’s deep recession. High quality global journalism requires investment.

“Corruption with the payment of bribes worth more than R$100m and causing as a consequence equivalent losses to the public coffers deserves special reprobation,” federal judge Sérgio Fernando Moro said in his ruling. Mr Odebrecht’s lawyer said his client denied wrongdoing and would appeal against the ruling.

Such a severe penalty for a businessman of Mr Odebrecht’s standing, whose conglomerate, Grupo Odebrecht, dominated the construction industry across Latin America and the Caribbean, would have been unimaginable a year ago.

But the sweeping investigation into corruption at Petrobras, in which former executives of the state-owned oil company are accused of conspiring with politicians and contractors in exchange for kickbacks, is challenging Brazil’s tradition of impunity for the powerful.

In an unprecedented move in Brazil’s recent history, federal police last Friday detained for questioning Mr Lula da Silva, the populist leader who ruled Latin America’s biggest country for eight years until 2010, sparking an outcry from the country’s left.

The move unnerved Ms Rousseff, who visited her mentor at his home on Saturday, but excited markets, which are hoping the weakening of Mr Lula da Silva will split the ruling Workers’ party, or PT, and leave the president vulnerable to impeachment.

Mr Odebrecht’s lawyer, Nabor Bulhões, said the prosecution had failed to produce evidence incriminating his client, saying witness testimony did not directly link the former chief executive to illicit acts nor did any documents seized by the police.

Mr Odebrecht, alongside a group of other former Odebrecht officials and collaborators in the scandal, was convicted not only of corruption but also of money laundering and belonging to a criminal organisation.

“The sentence against Marcelo Odebrecht is manifestly unfair and unjust because it has no basis in the evidence uncovered in the criminal investigation,” Mr Bulhões said. “The defence of Marcelo Odebrecht will keep fighting for his liberty and to prove his innocence.

Lex: Petrobras

Oil-services sector to be hurt after under-fire Brazilian state-owned group reels back investment.

Read more

Brazilian media, however, quoted unnamed sources as saying Mr Odebrecht, along with another construction boss implicated in the case, Leo Pinheiros of OAS, were planning to negotiate joint leniency agreements with prosecutors in exchange for lighter sentences.

These and other reputed planned leniency agreements, including a reported plea bargain signed by Delicidio do Amaral, the PT’s former senate leader, have stimulated markets. The PT has repeatedly denied any wrongdoing in its campaign funding and points to the approval of its electoral accounts by the country’s election watchdog, the TSE.

In his ruling, Judge Moro said Mr Odebrecht paid a total of nearly R$109m as well as a further $35m in bribes in corruption related to Petrobras, “a very expressive number”.

In an unusual comment, the judge recommended that Grupo Odebrecht, the company, seek to reach a settlement with regulators over its alleged involvement in corruption to limit damage to its business.

“Grupo Odebrecht, for its part, has significant political and social responsibilities and cannot escape from them,” the judge said. “It is necessary, as a first step to emerge from this criminal scheme and recuperate its reputation, to assume responsibility for its past faults,” he said.

Odebrecht has said it was co-operating with investigators.

Sydney (AFP) - Washington is in talks to station its strike bombers in Australia, according to a US general, amid concern about China's military expansion in the South China Sea.

General Lori Robinson, commander of US Pacific Air Forces, said negotiations were under way to have American B-1 bombers and aerial tankers temporarily stationed in northern Australia.

"We're in the process of talking about rotational forces, bombers and tankers out of Australia and it gives us the opportunity to train with Australia," she said according to national radio aired Wednesday.

"It gives us the opportunity to strengthen the ties we already have with the Royal Australian Air Force and it gives the opportunity to train our pilots to understand the theatre and how important it is to strengthen our ties with our great allies, the RAAF."

The US has been pursuing a foreign policy "pivot" towards Asia, which has rattled China, and already stations Marines in Australia's north.

Beijing said it was "concerned" by reports of the US-Australia talks.

"To seek peace, cooperation and development is an important trend in the region and what all people aspire for," said Hong Lei, a spokesman from China's Ministry of Foreign Affairs.

"Relevant cooperation among countries should serve the purpose of safeguarding regional peace and stability.

"Such cooperation should not target the interests of a third party".

Last May, Assistant Defense Secretary for Asian and Pacific Security Affairs David Shear raised the prospect of B-1 bombers in Australia when he appeared before the US Senate Foreign Relations Committee.

But his comments were played down by Australia's then prime minister Tony Abbott, who said Shear had "misspoken".

Current Prime Minister Malcolm Turnbull would not be drawn on the specifics of the discussions when asked about the bombers.

"Well, we have rotation of American military forces through Darwin and through Australia all the time," he said Wednesday. "So we have a very, very close defence relationship with the US.

"I'm not going to comment on a particular element of that, but I can just assure you that everything we do is in this area is very carefully determined to ensure that our respective military forces work together as closely as possible in our mutual national interests."

Beijing claims almost the whole of the South China Sea, through which a third of the world's oil passes, and tensions have been rising as it asserts its territorial claims.

A US official last month said Beijing had deployed surface-to-air missiles on Woody Island in the disputed Paracels chain. Reports also surfaced recently of probable radar installations on reefs in the nearby Spratly islands.

Washington has in recent months sent warships to sail within 12 nautical miles -- the usual territorial limit around natural land -- of a disputed island and reef transformed into an artificial island.

Robinson said the United States would continue to fly above and sail through the disputed waterway and encouraged "anybody in the region and around the world" to follow suit to assert freedom of navigation.

DUBAI, United Arab Emirates (AP) — Iran test-launched two ballistic missiles Wednesday emblazoned with the phrase "Israel must be wiped out" in Hebrew, Iranian media reported, in a show of power by the Shiite nation as U.S. Vice President Joe Biden's visited Jerusalem.

The new missile firings were the latest in a series of tests in recent days, aimed at demonstrating that Iran will push ahead with its ballistic program after scaling backing its nuclear program under the deal reached last year with the U.S. and other world powers.

Israel, long an opponent of Iran, offered no comment on the test, though Biden issued a strong warning over any possible violation of the nuclear deal.

"A nuclear-armed Iran is an absolutely unacceptable threat to Israel, to the region and the United States. And I want to reiterate which I know people still doubt here. If in fact they break the deal, we will act," he said.

Biden's comments came after meeting Israeli Prime Minister Benjamin Netanyahu, who strongly opposed the nuclear deal.

The tests, however, don't violate the accord. The landmark deal, which led to Iran dramatically scaling back its nuclear program, does not include provisions against missile launches.

Also, when the nuclear accord came into effect on Jan. 16, the Security Council lifted most U.N. sanctions against Tehran including a ban it had imposed in 2010 on Iran testing missiles capable of carrying nuclear warheads — a ban that likely would have covered some of the missile fired this week. To deal with the restrictions in the nuclear agreement, the councill adopted a resolution last July which among other measures "calls on" Iran not to carry out such tests.

At the United Nations, there is likely to be a debate about whether Iran is still required to abide by the ballistic missile test ban under council resolutions.

Iran says none of its missiles are designed to carry nuclear weapons and so the resolutions do not apply.

View gallery

In this photo obtained from the Iranian Fars News Agency, a Qadr H long-range ballistic surface-to-s …

One Security Council diplomat said the tests don't violate the nuclear deal, but "there are obligations on Iran" that stem from the resolution and "they need to abide by those obligations." he said. Another diplomat acknowledged, "We're not mounting an argument that it's a binding obligation."

The two diplomats, speaking on condition of anonymity because they were not authorized to speak on the tests, said the council still has to consider the reported launches and if verified determine whether it is a violation and if so what action to take.

Iran state TV trumpeted Wednesday's test as officials boasted that it demonstrated the country's might against longtime nemesis Israel.

Video aired on state TV showed the golden-hued Qadr H missiles being fired from a crevice between brown peaks identified as being in Iran's eastern Alborz mountain range. The rockets hit targets some 1,400 kilometers (870 miles) away off Iran's coast into the Sea of Oman, state media and Iran's semiofficial Fars news agency reported.

The U.S. Navy's 5th Fleet, which patrols that region, declined to comment on the test.

Amir Ali Hajizadeh, the head of the Revolutionary Guard's aerospace division, was quoted as saying the test was aimed at showing Israel that Iran could hit it. Israel is within 1,100 kilometers (660 miles) of Iranian territory.

"The 2,000-kilometer (1,240-mile) range of our missiles is to confront the Zionist regime," Hajizadeh said. "Israel is surrounded by Islamic countries and it will not last long in a war. It will collapse even before being hit by these missiles."

He stressed that Iran would not fire the missiles in anger or start a war with Israel.

View gallery

In this photo obtained from the Iranian Fars News Agency, a Qadr H long-range ballistic surface-to-s …

"We will not be the ones who start a war, but we will not be taken by surprise, so we put our facilities somewhere that our enemies cannot destroy them so that we could continue in a long war," he said.

The Fars news agency reported the Hebrew inscription on the missiles.

Writing messages on bombs dates as far back as World War II. During Israel's 2006 war with Lebanon's Hezbollah militants, Israeli children were photographed writing messages on artillery shells in a community near the border. More recently, pictures emerged online of U.S. missiles bound for Islamic State group targets that had "From Paris with love" written on them, referring to last year's IS attacks in the French capital.

Iran's message for Israel seemed timed to coincide with Biden's stop in the country on his Mideast tour. Iran has threatened to destroy Israel in the past. Israel, which is believed to have the only nuclear arsenal in the Mideast, repeatedly has threatened to take military action against Iran's nuclear facilities.

Over the past days, Iran has launched a number of missile tests as part of military exercises. On Tuesday, the Revolutionary Guard said the tests included several missiles with ranges between 300 and 2,000 kilometers (185-1,250 miles), including the Shahab-1 and -2, the Qiam, with a range of 800 kilometers, and the Qadr.

A U.S. State Department spokesman on Tuesday said the U.S. was aware of reports of missile launches and, if the reports were true, would take "appropriate responses" at the U.N. or elsewhere.

Secretary of State John Kerry spoke with Iranian Foreign Minister Mohammad Javad Zarif, and "the secretary did raise his concerns today with Foreign Minister Zarif about these reports," State Department spokesman John Kirby told reporters. He did not have additional details about the call.

The Qiam and Qadr, each capable of carrying payloads greater than 500 kilograms, fit the U.N. definition for missiles capable of carrying a nuclear warhead, said Jeremy Bennie, Middle East and Africa editor for IHS Jane's Defence Weekly.

The now-lifted 2010 ban covered missiles with a range of at least 300 kilometers (186 miles) and a payload capacity of at least 500 kilograms (1,102 pounds), under a definition by a U.N. panel of experts.

The nuclear accord was a victory for Iran's moderate president, Hassan Rouhani, over hard-liners who sharply opposed reining in the nuclear program. But since the deal was reached, hard-liners in the military have made several shows of strength.

In October, Iran successfully test-fired a new guided long-range ballistic surface-to-surface missile.

U.N. experts said the launch used ballistic missile technology banned by the Security Council. In January, the U.S. imposed new sanctions on individuals and entities linked to the missile program.

Iran also has fired rockets near U.S. warships and flown an unarmed drone over an American aircraft carrier in recent months.

In January, Iran seized 10 U.S. sailors in the Persian Gulf and held them for about 15 hours when their two riverine command boats headed from Kuwait to Bahrain ended up in Iranian territorial waters after the crews "misnavigated," the U.S. military said.

___

Associated Press writers Edith M. Lederer at the United Nations, Aron Heller and Daniel Estrin in Jerusalem, Joseph Krauss in Cairo and Matthew Lee in Washington contributed to this report.