Brazilian firms agree to pay record $3.5 billion to settle bribery scheme
WASHINGTON – The U.S. Justice Department said two Brazilian companies have agreed to pay the U.S., Brazil and Switzerland at least $3.5 billion in penalties to resolve a massive foreign bribery scheme involving officials in three continents.
The settlement with Brazilian construction giant Odebrecht and Brazilian petrochemical company Braskemto was reached under the anti-bribery provisions of the Foreign Corrupt Practices Act. With the possibility that combined penalties could reach $4.5 billion, officials said it’s the largest settlement ever agreed to under FCPA.
On Wednesday, Odebrecht pleaded guilty to a one-count criminal information filed by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office in the U.S. District Court for the Eastern District of New York, charging the company with conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act.
According to a Justice Department release, Odebrecht’s “massive and unparalleled bribery and bid-rigging scheme” began in 2001.
Over that period, the company created a “department of bribery” using shell companies, off-book transactions and off-shore bank accounts to pay about $788 million to government officials, their representatives and political parties in a number of countries (including Argentina, Mexico and the Dominican Republic), to win government contracts.
Federal prosecutors got involved because Odebrecht, its employees and agents took a number of steps while in the United States to further the scheme, officials said.
For instance, in 2014 and 2015, while located in Miami, two Odebrecht employees engaged in conduct related to certain projects in furtherance of the scheme, including meetings with other co-conspirators to develop the bribery scheme, they said.
In addition, some of the off-shore entities used by the Brazilian construction firm to hold and disburse unrecorded funds were established, owned or operated by individuals located in the United States, they said.
In a statement, Odebrecht apologized for its actions.
"It deeply regrets its role in the conduct giving rise to this resolution and apologizes for violating its own principles of honesty and ethics," the statement said. "The group reaffirms that it will continue to cooperate with the authorities and to adopt the appropriate and necessary measures to enhance its commitment to ethical business practices and transparency in its actions."