Brazil's Car Wash Probe Eyes Glencore, Vitol, Trafigura for Paying Millions in Bribes
December 05 2018 - 9:19AM
Dow Jones News
By Jeffrey T. Lewis, Scott Patterson and Luciana Magalhaes
SÃO PAULO -- Brazil's sprawling Operation Car Wash corruption
probe is investigating mining giant Glencore PLC, Trafigura Group
and Vitol Group for allegedly paying millions of dollars in bribes
to employees of Brazilian oil company Petróleo Brasileiro SA, or
Petrobras, in return for better terms on trading contracts.
Glencore and oil trader Vitol, both based in Switzerland, and
Singaporean oil trader Trafigura are suspected of paying a total of
about $15 million in bribes, and other trading companies also under
investigation are suspected of paying a similar amount, prosecutors
said Wednesday.
Spokespeople for Glencore and Trafigura declined to comment. A
Vitol spokesman said the company is cooperating with
authorities.
Prosecutors said they have ample documentary evidence,
implicating top executives at the targets of the probe, that the
companies bribed Petrobras employees to win more contacts to trade
oil and derivatives and to win better prices on those contracts,
among other things.
Investigators said they have evidence that at least 160 trading
operations were affected by the scheme, and there is much more to
be uncovered. Glencore, Trafigura and Vitol will face legal
repercussions in other jurisdictions, they said.
"The early stages of the investigation are revealing only the
tip of the iceberg," said prosecutor Athayde Ribeiro Costa, during
a press conference in the Brazilian city of Curitiba, where
Operation Car Wash is based. "The main executives of the trading
companies had total and unmistakable knowledge" of the deals, Mr.
Costa added.
The bribes were paid to executives of the marketing and trading
department and the illicit deals were carried out by Petrobras
workers in the company's Houston and Rio de Janeiro offices,
according to prosecutors. Bribes were also paid to win contracts to
store oil, they said.
Petrobras, which has changed its top management and implemented
new ethics and compliance programs since the Car Wash probe began
in 2014, has been cooperating with Brazilian investigators in the
probe, turning over documents and other materials, according to
prosecutors.
"This is important because it shows the company wants to help
Brazilian authorities resolve these crimes," said Mr. Costa.
Allegations that the commodity trading houses used corrupt
middlemen in dealings with Petrobras emerged in November in a
report by London watchdog Global Witness. Glencore, in response to
the report's allegations, denied wrongdoing. Vitol said in response
to the report that it has a "zero tolerance policy in respect of
bribery and corruption."
Global Witness investigator Daniel Balint-Kurti said the three
trading firms "have a history of dealing with unsavory middlemen
around the world."
Car Wash began as a probe of bribes paid to Petrobras employees
by Brazilian construction companies that won contracts with the oil
producer in return. Investigators found that part of the illicit
cash generated by the scheme was delivered to politicians, who used
the money to fund political campaigns, among other things.
Prosecutors jailed dozens of executives from the companies
involved and named scores of politicians who allegedly benefited
from the payments. The scandal weakened former President Dilma
Rousseff and contributed to her being impeached and removed from
office in 2016.
It also boosted the campaign of President-Elect Jair Bolsonaro,
who in October won the country's presidential election with a
strong law-and-order campaign.
Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com, Scott
Patterson at scott.patterson@wsj.com and Luciana Magalhaes at
Luciana.Magalhaes@wsj.com
(END) Dow Jones Newswires
December 05, 2018 10:04 ET (15:04 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Petroleo Brasileiro ADR (NYSE:PBR)
Historical Stock Chart
From Apr 2024 to May 2024
Petroleo Brasileiro ADR (NYSE:PBR)
Historical Stock Chart
From May 2023 to May 2024