As highlighted in this prior post, last week’s Foreign Corrupt Practices Act enforcement action against Odebrecht / Braskem 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 in connection with projects and other issues in Brazil and eleven other countries.
Given the egregious and wide-spread improper conduct, the Odebrecht / Braskem global (Brazil, U.S. and Switzerland) settlement of approximately $3.5 billion set a record. 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 5th largest FCPA settlement amount of all-time). [Note, in April 2017 the DOJ trimmed the Odebrecht criminal penalty by $167 million to $93 million (it originally was $260 million). Thus, the overall net FCPA settlement amount is $252 million].
Just because the conduct was egregious does not mean that there are not legal and policy issues to consider from the enforcement action. This prior post highlighted why the Odebrecht / Braskem enforcement action was unique (the bulk of the conduct focused on Brazil and it is believed to be the first FCPA enforcement action ever against a foreign issuer for bribing its own “domestic” officials) and this post continues the analysis by highlighting additional issues to consider.