US, Brazil fine Petrobras US$853m for bribery

United States and Brazilian authorities have fined Brazil's oil giant Petrobras more than US$853 million for paying bribes to Brazilian politicians and political parties.
United States and Brazilian authorities have fined Brazil's oil giant Petrobras more than US$853 million for paying bribes to Brazilian politicians and political parties.PHOTO: AFP

WASHINGTON (AFP) - United States and Brazilian authorities have fined Brazil's oil giant Petrobras more than US$853 million (S$1.165 billion) for paying bribes to Brazilian politicians and political parties, the US Justice Department announced on Thursday (Sept 27).

Petrobras executives at "the highest levels", including board members, orchestrated hundreds of millions in bribes" and then cooked the books to conceal the bribe payments from investors and regulators", Assistant Attorney General Brian Benczkowski said in a statement.

Brazilian authorities will receive 80 per cent of the fine, with the remainder will be collected by the Justice Department and the Securities and Exchange Commission. 

The actions the company admitted to occurred while Petrobras was traded on the New York Stock Exchange, giving US authorities jurisdiction over the alleged crimes, the Justice Department said. 

Prosecutors say a Petrobras executive directed payments to stop a Brazilian parliamentary inquiry into company contracts. 

The executive also allegedly funnelled bribes from company contractors into the campaign of an unnamed Brazilian politician who had power over where Petrobras could build refineries.  

Petrobras admitted some executives funnelled payments to politicians and political parties, and that the company failed to keep accurate books and records about property and equipment, as required by law. 

Executives also falsely certified Petrobras financial statements to the US Securities and Exchange Commission (SEC) even while they were personally involved in the bribery. 

“According to Petrobras’s admissions ... members of the Petrobras Executive Board were involved in facilitating and directing millions of dollars in corrupt payments to politicians and political parties in Brazil, and members of Petrobras’s Board of Directors were also involved in facilitating bribes that a major Petrobras contractor was paying to Brazilian politicians,” the statement said. 

As part of the agreement announced on Thursday, Petrobras agreed to continue cooperating with in any continuing investigations into the matter, including actions taken by individuals, and to make changes to its internal compliance programme. 

The settlement announced on Thursday involved a “non-prosecution agreement”, meaning no charges will be brought against the company. Prosecutors may separately take action against individuals. 

More than 40 countries including the US have criminalised paying bribes abroad to win business, which authorities say defrauds investors while promoting corruption and political instability. 

In a related matter, Petrobras agreed to pay US$933.5 million to the SEC to return ill-gotten gains, but this sum will be reduced by the amount of any payments made in a class action lawsuit by investors filed in New York.