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  • Brazilian Petrochemical Company Reaches $10 Million Settlement With Investors

    On September 14, Braskem SA, a Brazilian petrochemical company, agreed to pay its U.S. investors $10 million for concealing its role in a corruption scandal involving Petrobras. The settlement resolves a 2015 lawsuit brought by U.S. investors against Braskem, which alleged the company had misled investors into believing its operations were legitimate. The settlement follows the December 2016 guilty plea by the company and its affiliated construction firm Odebrecht SA to violating the Foreign Corrupt Practices Act. Together, the companies agreed to pay $3.5 billion in a combined global settlement with U.S., Brazilian, and Swiss authorities.

    FCPA Enforcement Action Anti-Corruption Braskem SA Petrobras

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  • Odebrecht and Braskem Reach $3.5 Billion Global FCPA Settlement

    On December 21, Brazilian construction company Odebrecht S.A. and its petrochemical affiliate, Braskem S.A., 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 Petrobras and Brazilian officials, it also included government officials in numerous other South and Central American countries, and in Africa.

    Odebrecht 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 Odebrecht 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, Braskem 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.  Braskem also agreed to disgorge $325 million, with $65 million going to the SEC and the rest to Brazil.  The DOJ noted Braskem’s failure to voluntarily disclose the conduct, and granted only partial cooperation credit due to Braskem’s failure to turn over any evidence from its internal investigation until seven months after it first talked to the DOJ.  Both Odebrecht and Braskem 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 Petrobras investigations can be found here.

    DOJ Petrobras FCPA SEC Odebrecht Braskem SA

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  • Two SBM Offshore Leaders Settle Allegations Tied to Petrobras Probe in Brazil

    On January 22, 2016, the Ministerio Publico Federal (MPF), Brazil’s Public Prosecutor’s Office, reportedly entered into a settlement with Dutch drilling company SBM Offshore’s CEO and a member of its supervisory board, resolving misdemeanor allegations apparently tied to the ongoing Petrobras probe in Brazil.  If the settlement is approved by the Brazilian judge handling the case, both individuals will be fined approximately $60,000 each, with no admission of guilt. SBM Offshore stated in response that while it “believes that accepting the settlement offers a pragmatic opportunity to expeditiously resolve this matter that avoids long and costly legal proceedings,” it remains of the opinion that the accusations are without merit and that it stands behind both individuals.  While SBM Offshore declined to comment on the specific accusations of misconduct in this case, the settlement comes a little over a year after SBM Offshore resolved an enforcement action in the Netherlands involving alleged bribes in Angola, Brazil, and Equatorial Guinea between 2007 and 2011. Click here to view previous FCPA Scorecard coverage of SBM Offshore and Brazil’s Petrobras investigation.

    Brazil Petrobras SBM Offshore N.V.

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  • Two SBM Offshore Leaders Settle Allegations Tied to Petrobras Probe in Brazil

    On January 22, 2016, the Ministerio Publico Federal (MPF), Brazil’s Public Prosecutor’s Office, reportedly entered into a settlement with Dutch drilling company SBM Offshore’s CEO and a member of its supervisory board, resolving misdemeanor allegations apparently tied to the ongoing Petrobras probe in Brazil.  If the settlement is approved by the Brazilian judge handling the case, both individuals will be fined approximately $60,000 each, with no admission of guilt. SBM Offshore stated in response that while it “believes that accepting the settlement offers a pragmatic opportunity to expeditiously resolve this matter that avoids long and costly legal proceedings,” it remains of the opinion that the accusations are without merit and that it stands behind both individuals.  While SBM Offshore declined to comment on the specific accusations of misconduct in this case, the settlement comes a little over a year after SBM Offshore resolved an enforcement action in the Netherlands involving alleged bribes in Angola, Brazil, and Equatorial Guinea between 2007 and 2011. Click here to view previous FCPA Scorecard coverage of SBM Offshore and Brazil’s Petrobras investigation.

    Brazil Petrobras SBM Offshore N.V.

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  • Brazil Charges 12 Individuals in Connection with Petrobras Investigation

    On December 21, Brazilian officials charged twelve individuals with corruption-related offenses in connection with a probe into the relationship between Petrobras and Dutch oilfield company SBM Offshore N.V.  Those charged include several former SBM Offshore executives, former SBM Offshore sales agents, and several former Petrobras executives. News reports state that the charges center on $46 million in allegedly corrupt payments made between 1998 and 2012. On December 17, SBM Offshore issued a statement that referred to ongoing discussions with Brazil’s Comptroller General’s Office and Attorney General’s Office to reach a settlement agreement and to secure disclosure of information relevant to the ongoing investigation into Petrobras.  Brazil’s actions follow SBM Offshore’s prior settlement with Dutch authorities over allegations that it bribed officials in Brazil, Angola, and Equitorial Guinea; SBM Offshore agreed to pay the Dutch Public Prosecutor’s Office $240 million as part of the settlement.  The company also had announced the conclusion of the DOJ’s investigation into the matters resolved with the Dutch.  Previous FCPA Scorecard coverage of SBM Offshore settlement and the Petrobas investigation can be found here and here.

    Brazil Petrobras SBM Offshore N.V.

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  • Brazil Charges 12 Individuals in Connection with Petrobras Investigation

    On December 21, Brazilian officials charged twelve individuals with corruption-related offenses in connection with a probe into the relationship between Petrobras and Dutch oilfield company SBM Offshore N.V.  Those charged include several former SBM Offshore executives, former SBM Offshore sales agents, and several former Petrobras executives. News reports state that the charges center on $46 million in allegedly corrupt payments made between 1998 and 2012. On December 17, SBM Offshore issued a statement that referred to ongoing discussions with Brazil’s Comptroller General’s Office and Attorney General’s Office to reach a settlement agreement and to secure disclosure of information relevant to the ongoing investigation into Petrobras.  Brazil’s actions follow SBM Offshore’s prior settlement with Dutch authorities over allegations that it bribed officials in Brazil, Angola, and Equitorial Guinea; SBM Offshore agreed to pay the Dutch Public Prosecutor’s Office $240 million as part of the settlement.  The company also had announced the conclusion of the DOJ’s investigation into the matters resolved with the Dutch.  Previous FCPA Scorecard coverage of SBM Offshore settlement and the Petrobas investigation can be found here and here.

    Brazil Petrobras SBM Offshore N.V.

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  • Brazil Charges 12 Individuals in Connection with Petrobras Investigation

    On December 21, Brazilian officials charged twelve individuals with corruption-related offenses in connection with a probe into the relationship between Petrobras and Dutch oilfield company SBM Offshore N.V.  Those charged include several former SBM Offshore executives, former SBM Offshore sales agents, and several former Petrobras executives. News reports state that the charges center on $46 million in allegedly corrupt payments made between 1998 and 2012.

    On December 17, SBM Offshore issued a statement that referred to ongoing discussions with Brazil’s Comptroller General’s Office and Attorney General’s Office to reach a settlement agreement and to secure disclosure of information relevant to the ongoing investigation into Petrobras.  Brazil’s actions follow SBM Offshore’s prior settlement with Dutch authorities over allegations that it bribed officials in Brazil, Angola, and Equitorial Guinea; SBM Offshore agreed to pay the Dutch Public Prosecutor’s Office $240 million as part of the settlement.  The company also had announced the conclusion of the DOJ’s investigation into the matters resolved with the Dutch.  Previous FCPA Scorecard coverage of SBM Offshore settlement and the Petrobas investigation can be found here and here.

    Brazil News Petrobras SBM Offshore N.V.

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  • Vantage Drilling Self-Reports Potential FCPA Violation

    On August 4, Vantage Drilling Company, an international offshore drilling contractor, acknowledged that an overseas agent had entered into plea discussions with Brazilian authorities and provided evidence in the ongoing corruption investigation focused on Petrobras.  Vantage acknowledged that the agent had purportedly provided evidence related to a former director of Vantage and Petrobras.  The company disclosed that it had opened an internal investigation and self-reported the matter to the DOJ and the SEC. The Brazilian corruption investigations into Petrobras and its affiliates and counterparties continue to expand with no end in sight, and the expected related U.S. investigations are beginning to be disclosed.

    Brazil Petrobras

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  • SBM Offshore Settles Corruption Investigation with Dutch and U.S. Authorities as Investigation Widens in Brazil

    On November 12, Dutch oilfield company SBM Offshore N.V. announced that it had agreed to pay $240 million to the Dutch Public Prosecutor’s Office to resolve an investigation into allegedly corrupt payments made to win contracts in several countries around the world. SBM also stated that the U.S. Department of Justice had simultaneously closed its investigation into the same matter, but news reports indicated that Brazilian and U.S. authorities were investigating payments made by SBM to Petrobras, the Brazilian state-owned oil company. The investigation in Brazil is part of a widening investigation into various allegations of corruption involving Petrobras, which has portrayed itself as a victim rather than perpetrator of misconduct. As to SBM Offshore, the Department of Justice’s apparent willingness to accept the company’s resolution with Dutch authorities is an encouraging indication that U.S. authorities are increasingly cognizant of the need to avoid imposing “double jeopardy” on multinationals. Moreover, while the Netherlands were termed as having “little or no enforcement” in Transparency International’s recent “Exporting Corruption -- Progress Report 2014: Assessing Enforcement of the OECD Convention on Combating Foreign Bribery,“ this action seems certain to change perceptions about Dutch anti-corruption enforcement activity.  

    Brazil Petrobras

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