Petrobras to Pay $853.2 Million to Settle Corruption Investigations in U.S., Brazil
Payments will be split among Brazil fund and U.S. authorities; scheme was among the biggest ever uncovered
Petrobras PBR 1.55% said Thursday it had agreed to an $853.2 million settlement with U.S. and Brazilian law-enforcement authorities to end yearslong investigations into one of the biggest corruption schemes ever uncovered.
The payments include a tentative deal to pay $682.6 million to a Brazil fund, and an additional $170.6 million equally split between the U.S. Justice Department and the U.S. Securities and Exchange Commission.
The Justice Department agreed not to prosecute the company in exchange for an $85.3 million payment, three years of compliance reports, and an admission that the scheme amounted to criminal violations of laws that require public companies to maintain accurate books and records, Petrobras said.
The deal follows the 2016 accord in which Odebrecht S/A agreed to pay billions of dollars to resolve charges in the U.S., Brazil and Switzerland that it was the ringleader in a cartel of construction companies that conspired to overbill state oil company Petrobras and paid bribes to high-level Brazilian politicians and Petrobras executives along the way.
Under Thursday’s agreement, U.S. prosecutors in part viewed Petrobras as a victim of the conduct of its executives and managers who were embezzling the company. The law at issue, the Foreign Corrupt Practices Act, bars U.S.-listed companies, of which Petrobras is one, from paying bribes to foreign government officials, and also requires public companies to maintain accurate financial records.
“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,” the head of the Justice Department’s criminal division, Brian Benczkowski, said.
Petrobras also reached a related $930 million deal with the SEC, but the agency said it would credit everything but an $85 million penalty to a settlement Petrobras reached earlier this year with investors who had sued the company over the corruption scheme.