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DOJ Criminally Charges Former Braskem CEO Jose Grubisich In Connection With The Same Core Conduct Alleged In The 2016 Corporate Enforcement Action

grubisich

As highlighted in this prior post, in late 2016 the DOJ and SEC brought a Foreign Corrupt Practices Act enforcement action against Odebrecht S.A. (a Brazilian holding company) and Braskem S.A. (a Brazil-based petrochemical company with shares traded on the NYSE in which Odebrecht owned a majority of voting shares).

The conduct at issue was egregious and largely centered on a business unit, the Division of Structured Operations, housed within an Odebrecht subsidiary that allegedly served as little more than a bribe-paying department for the benefit of Odebrecht and Braskem. According to the resolution documents, former senior executives authorized approximately $788 million in bribes, largely through the Division of Structured Operations, to alleged foreign officials in at least twelve countries. While the principal focus of the DOJ’s action (and the exclusive focus of the SEC action) concerned conduct in Brazil including the companies relationships with Petrobras, the DOJ action also alleges improper payments in Angola, Argentina, Brazil, Colombia, Dominican Republic, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru, and Venezuela.

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Friday Roundup

Roundup

Scratch that trial, scrutiny alert, affirmed, follow-up, Braskem-related, and across the pond. It’s all here in the Friday roundup.

Scratch That Trial

One of the FCPA trials scheduled this Fall (see here for the prior post) involved Frank Chatburn. As highlighted here, in April 2018 Frank Roberto Chatburn Ripalda (a dual United States and Ecuadorian citizen) was criminally charged for conspiring with others for making corrupt payments to PetroEcuador officials in order to obtain and retain contracts for Galileo (described as an Ecuadorian company that provided services in the oil and gas industry) from PetroEcuador.

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Friday Roundup

Roundup

Odebrecht / Braskem settlement amount is significantly trimmed, a form of bribery?, quotable, deficient internal controls, and scrutiny alerts and updates. It’s all here in the Friday roundup.

Odebrecht / Braskem Settlement Amount Significantly Trimmed

There was much false and misleading reporting about the FCPA settlement amount in the December 2016 FCPA enforcement action against Odebrecht / Braskem.

As highlighted in this post, after accounting for various credits and deductions (including for payments to Brazil and Swiss law enforcement agencies and a claimed inability to pay) the net FCPA settlement amount (subject to potential future adjustments) was approximately $420 million. The $420 settlement amount consisted of approximately $260 million in connection with the Odebrecht criminal information and plea agreement; $94.8 million in connection with the Braskem criminal information and plea agreement; and $65 million in connection with the SEC’s related enforcement action against Braskem.

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Friday Roundup

Roundup

Clayton responds, from the dockets, Bitkower to FCPA Inc., and a student writing competition. It’s all here in the Friday roundup.

Clayton Responds

This previous post highlighted the FCPA portion of the recent confirmation hearing of SEC Chair nominee Jay Clayton. In follow-up written questions, Senator Sherrod Brown (D-OH) asked: “The Foreign Corrupt Practices Act (FCPA) forbids U.S. companies and their subsidiaries from paying foreign government officials to obtain or retain business. What is your specific plan for enforcement of the FCPA.”

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Why The Odebrecht / Braskem FCPA Enforcement Action Is Unique (And Interesting)

Unique

The Foreign Corrupt Practices Act enforcement action last week against Odebrecht / Braskem was unique – specifically the DOJ’s and SEC’s bribery charges against the companies relating to conduct with alleged Brazilian “foreign officials.”

What makes it unique is that it is believed to be the first FCPA enforcement action in history against a foreign issuer for allegedly bribing its own domestic officials. In other words, a large portion of the U.S. enforcement action against the Brazilian companies is that they bribed Brazilian officials.

All previous FCPA enforcement actions against foreign issuers have not addressed this dynamic. In other words, German companies Siemens and Daimler did not bribe German officials; French companies Alstom, Total and Technip did not bribe French officials; Japanese company JGC did not bribe Japanese officials, etc., etc.

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