Petrobras Doj Agreement
On Thursday, September 24, 2020, the Brazilian state-owned oil and gas company, Petróleo Brasileiro S.A. (Petrobras), reached an agreement with the United States Department of Justice (DOJ) in relation to an investigation into alleged violations of the Foreign Corrupt Practices Act (FCPA).
The agreement requires Petrobras to pay a total of $853.2 million to settle the investigation, which focused on allegations of bribery and other corrupt conduct involving Petrobras executives and employees, as well as third parties. The DOJ’s investigation uncovered a long-running bribery scheme that saw Petrobras executives accept millions of dollars’ worth of bribes from Brazilian and international construction and engineering firms.
Petrobras was able to avoid criminal charges by agreeing to the terms of the deferred prosecution agreement (DPA) with the DOJ. Under the DPA, Petrobras is required to admit to the facts alleged in the DOJ’s criminal information, to cooperate fully with the DOJ’s ongoing investigations, and to implement rigorous compliance and internal controls programs.
The investigation into Petrobras began in 2014, when Brazilian authorities launched an operation known as “Operation Car Wash” (Operação Lava Jato). The operation uncovered a vast conspiracy involving senior Petrobras executives, politicians, and construction and engineering firms, all of whom were accused of engaging in systemic corruption activities.
In addition to the payment to the DOJ, Petrobras has also agreed to pay a total of $1.78 billion in a civil settlement with the US Securities and Exchange Commission (SEC) to resolve related allegations of securities fraud. The SEC’s complaint alleged that Petrobras had misled investors by failing to disclose the extent of its corruption problems.
The settlement with the DOJ is a significant milestone for Petrobras, which has been dogged by corruption allegations for years. The company has made significant efforts to clean up its operations in recent years, including implementing new compliance procedures and cooperating with authorities in Brazil and elsewhere.
It is hoped that the agreement with the DOJ will mark the beginning of a new era for Petrobras, one in which the company’s reputation for integrity and transparency is restored. The company’s management has expressed a commitment to implementing the highest standards of corporate governance and ethical behavior, and this settlement is an important step in that direction.