Brazil's construction colossus Odebrecht and affiliated petrochemical company Braskem SA agreed on Wednesday in New York to pay at least US$3.5 billion, the largest penalty ever in a foreign bribery case, to resolve international charges involving payoffs to Brazil's state oil company and others.
Odebrecht and Braskem pleaded guilty in U.S. federal court in Brooklyn to conspiring to violate a U.S. foreign bribery law after an investigation involving political kickbacks at Brazil's Petrobras unearthed the bribery scheme.
The huge penalty was negotiated as part of a broad settlement with U.S., Brazilian and Swiss authorities.
Some of the hundreds of millions of dollars used in bribes to secure lucrative business PUBLICIDAD
deals flowed through the American banking system and some of the schemes were planned in the United States, enabling U.S. authorities to claim jurisdiction in the case.
Odebrecht is Latin America's biggest engineering firm. Braskem, the region's biggest petrochemical producer, is jointly owned by Odebrecht and Petrobras.
Their guilty pleas were the first in the United States following a nearly three-year investigation in Brazil dubbed Operation Car Wash into corruption at Petrobras, which has led to dozens of arrests and political upheaval in Brazil.
The total fines and penalties to be paid out by the companies exceeded a 2008 agreement in which German engineering company Siemens paid US$1.6 billion to U.S. and European authorities for paying bribes to win government contracts.
Odebrecht and Braskem were charged with conspiring to violate the U.S. Foreign Corrupt Practices Act, which is aimed at deterring companies from bribing officials overseas.
Odebrecht and Braskem used a hidden but fully functioning Odebrecht business unit - a 'Department of Bribery,' so to speak - that systematically paid hundreds of millions of dollars to corrupt government officials in countries on three continents, U.S. Deputy Assistant Attorney General Suh said in a statement.
From 2001 to 2016, Odebrecht paid approximately US$788 million in bribes in association with 100 projects in 12 countries, including Brazil, Angola, Argentina, Colombia, Ecuador, Mexico and Venezuela, according to the U.S. charging papers.
The companies hid the bribes through carefully disguised payments routed through a network of shell companies as well as suitcases of cash left at preset locations, Suh said.
The U.S. Justice Department said the penalty to be paid by the two companies amounted to at least US$3.5 billion, including US$2.6 billion from Odebrecht and US$957 million from Braskem. Brazilian authorities gave a lower figure for the overall deal but did not explain the discrepancy.
U.S. officials said most of the money would go to Brazilian authorities. Both companies also agreed to continue to cooperate with authorities, implement compliance improvements and become subject to oversight by external monitors.
Odebrecht's former CEO Marcelo Odebrecht is already serving a 19-year sentence after being found guilty on corruption charges last year in Brazil, Latin America's biggest country. He turned state's witness and is expected to be freed by the end of 2017.
According to U.S. prosecutors, Odebrecht said it was able to pay US$2.6 billion although it agreed the appropriate criminal fine would be US$4.5 billion. The judge scheduled sentencing for April, when the deal would become finalized.
Former Brazilian President Luiz Inacio Lula da Silva, who Brazilian prosecutors say oversaw a scheme in which Odebrecht paid 75 million reais (US$22.18 million) in bribes to win eight Petrobras contracts, is among those already charged in Brazil.