On December 21, a Brazilian construction company and its petrochemical affiliate, reached a $3.5 billion combined global settlement with U.S., Brazilian, and Swiss authorities to resolve FCPA allegations, in which both companies agreed to plead guilty in the U.S. to conspiracy to violate the FCPA. The DOJ alleged that the companies operated an extremely broad and profitable global bribery scheme, including creating an internal bribery department to systematically pay hundreds of millions of dollars to corrupt government officials around the world from 2001 to 2016. The companies attempted to conceal the bribes by disguising the source and disbursement of bribe payments by passing funds through a series of shell companies and by using off-shore bank accounts. While the scheme in large part involved bribes paid to a Brazilian multinational company and Brazilian officials, it also included government officials in numerous other South and Central American countries, and in Africa.
The construction company agreed to an overall criminal fine of $4.5 billion, but based on its representation of its ability to pay, may end up paying only $2.6 billion. Ten percent of the criminal fine was earmarked for the U.S., with the remainder to Brazil (80%) and Switzerland (10%). The DOJ faulted the construction company for failing to voluntarily disclose the conduct, but granted full cooperation credit based on Odebrecht’s actions once it started to deal with the government. As part of its own related resolution, the petrochemical company agreed to pay over $632 million in criminal fines, with the vast majority ($443 million) going to Brazil, and 15%, or $94.8 million, to each of the DOJ and Switzerland. The petrochemical company also agreed to disgorge $325 million, with $65 million going to the SEC and the rest to Brazil. The DOJ noted the petrochemical company’s failure to voluntarily disclose the conduct, and granted only partial cooperation credit due to the petrochemical company’s failure to turn over any evidence from its internal investigation until seven months after it first talked to the DOJ. Both the construction company and the petrochemical company agreed to engage independent compliance monitors for at least three years
The resolution is, by far, the largest FCPA resolution ever, with the bulk of the money going to Brazil in apparent recognition of the heavy lifting done by Brazilian prosecutors.
Prior Scorecard coverage of the ongoing Brazilian multinational company investigations can be found here.