Friday January 6, 2017
Friday January 6, 2017
Odebrecht S.A. and Braskem S.A, two Brazilian companies, have received a total fine of at least US$3.5 billion after after pleading guilty to bribing government officials in a number of countries.
This is biggest ever international foreign bribery resolution, and was conducted by authorities in Brazil, Switzerland and the United States after an investigation by the FBI and the US Department of Justice’s Criminal Division.
Odebrecht, a construction business, and Braskem, a petrochemicals company, both pleaded guilty to paying bribes in exchange for business contracts in countries across three continents.
The global financial system, including the US banking system, was used to process the bribes.
US Deputy Attorney General Sung-Hee Suh described Odebrecht as having a ‘Department of Bribery’, with senior executives at the highest level involved in facilitating bribes. The bribes were organised via a ‘Division of Structured Operations’, which the Department of Justice said ‘effectively functioned as a stand-alone bribe department’.
Both companies, as part of their plea agreements, have agreed to cooperate with ongoing criminal investigations and to implement enhanced compliance procedures, in addition to independent compliance monitors for three years.
The company paid corrupt officials in a variety of countries to win contracts in those countries.
Here are a few of the starting details of the case:
Odebrecht are estimated to have paid around US$788 million to government officials and political parties since 2001.
The Odebrecht and Braskem penalties stem from a wider investigation into corruption across Brazilian politics and business that began with a probe into illicit payments at Petrobras.
Since then, revelations of corruption and bribery from politicians and senior executives in Brazil’s biggest businesses has contributed to huge social unrest and significant damage to the Brazilian economy, which has been in recession since 2014.
Corruption at first glance appears to be endemic in the political and business culture of the country. It certainly doesn’t seem to be an issue that will go away soon – but the appetite for change appears to be taking hold.
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