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  HOME | Brazil (Click here for more)

Petrobras Reaches Settlements with US, Brazilian Authorities

WASHINGTON – Brazilian state oil company Petrobras has entered into settlement agreements with authorities in the United States and Brazil and agreed to pay $853.2 million in penalties for violations of the US Foreign Corrupt Practices Act (FCPA), the US Justice Department said Thursday in a news release.

The company agreed to pay that sum to resolve the US government’s investigation into violations of the FCPA “in connection with Petrobras’s role in facilitating payments to politicians and political parties in Brazil,” the department added.

As a result of Brazilian authorities’ long-running Lava Jato (Car Wash) investigation, several engineering and construction firms were found to have paid bribes to Petrobras executives in exchange for inflated contracts.

Extra money from the scheme allegedly was paid out to politicians who provided cover for the graft.

In its settlement with US and Brazilian authorities, Petrobras accepted that actions by some of its former executives violated US law, while the US government recognized the oil company as a victim of actions by subsequently fired and imprisoned former employees.

“Executives at the highest levels of Petrobras – including members of its Executive Board and Board of Directors – facilitated the payment of hundreds of millions of dollars in bribes to Brazilian politicians and political parties and then cooked the books to conceal the bribe payments from investors and regulators,” Assistant Attorney General Brian Benczkowski was quoted as saying in the US Justice Department’s news release.

Former President Luiz Inacio Lula da Silva, Brazil’s best-known political figure, is among those who have been convicted of corruption and sentenced to a lengthy prison term as result of Lava Jato.

Petrobras will pay $85.3 million to the US Justice Department, $85.3 million to the US Securities and Exchange Commission and $682.6 million to the Brazilian AG’s office in penalties to resolve the US government’s probe into violations of the FCPA, the Justice Department’s news release said.

The company, meanwhile, said in a statement that the settlement “serves the best interests of Petrobras and its shareholders and puts an end to the uncertainty, expenses and costs associated with potential litigation in the United States.”

It added that it has already managed to recover 2.5 billion reais (around $625 million) in embezzled funds and will continue its fight in the courts against all those whose actions caused harm to the state company.

One of the Brazilian construction companies found to have secured inflated Petrobras contracts through bribes was Odebrecht.

That conglomerate and its petrochemical unit, Braskem, reached a settlement in December 2016 with the US Justice Department in which they pleaded guilty to paying hundreds of millions of dollars in bribes to government officials around the world.

 

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