In a March 14, 2019 securities filing, federal prosecutors in Brazil submitted a mutual legal assistance request to the US Department of Justice, asking that they freeze $124 million in assets belonging to Houston-based offshore drilling contractor Vantage Drilling International.
Vantage believes the DOJ will reject the request, based on the Department’s decision to close its 2017 investigation into Vantage’s possible violations of the Foreign Corrupt Practices Act. Brazilian prosecutors had alleged that a former Vantage director “paid $31 million in bribes in 2008 to officials at Brazil’s state-controlled oil company, Petrobras, to secure a $1.8 billion drilling contract.” Upon learning of the allegations in 2015, Petrobas terminated the contract.
While it’s unclear whether the DOJ will comply with Brazil’s request under the mutual legal assistance treaty, a DOJ spokesperson stated, “in general, declining prosecution as to a company does not impact our treaty obligations.”
Pierce Atwood litigation partner Kathleen Hamann, a former FCPA prosecutor who also spent ten years at the State Department, explained that “Vantage’s compliance officer might be taking the term ‘declination’ too literally. A declination isn’t saying you didn’t commit any offenses anywhere in the world. I have had cases where there is clearly an offense but it was not in the jurisdiction of the US.”
In thinking about a case from her time at the State Department, where the DOJ chose not to prosecute a company on the condition that it cooperated with another authority’s investigation in the same allegations, Kathleen added that “the US might have known all along that the Brazilians were going to get involved.”
While the DOJ could comply with Brazil’s request or ignore it completely, Kathleen warned that there could be “repercussions” to not assisting Brazil in this matter. “If we stop responding to Brazil’s requests, then maybe in the future they won’t help us. You aren’t going to get cooperation if you don’t give cooperation.”
The complete article by Kelly Swanson appeared in the March 20, 2019 issue of Global Investigations Review.