Hardly a day goes by without new legal complications arising for Petrobras, the largest company in Brazil and Latin America and manager of an asset – oil – that the Dilma Rousseff administration sees as “a passport to the future.”
After becoming the involuntary protagonist of the recent presidential campaign – following a series of arrests, resignations and testimonies involving billions of dollars in corrupt practices and a well-oiled illegal party financing system (mostly benefiting the ruling Workers’ Party) – Petrobras is now coming under fire from the US justice system.
The US Department of Justice (DoJ) has opened a criminal investigation into the Brazilian state oil company for alleged corruption, according to the Financial Times.
President Rousseff, on a visit to Doha, played down the news and merely said that “Petrobras is listed on the New York Stock Exchange and getting investigated is part of the rules of the game […]. The United States has to inspect whether there are US citizens involved in any kind of irregularities.”
According to the newspaper, the DoJ is examining alleged violations of the Foreign Corrupt Practices Act (FCPA), which prohibits the payment of money or anything of value to a foreign public servant.
The United States has to inspect whether there are US citizens involved in any kind of irregularities”
In this case, the DoJ is probing alleged bribes by US citizens and companies to Brazilian government workers to secure a commercial edge with Petrobras.
Meanwhile, the Securities and Exchange Commission (SEC), the stock market watchdog, has launched its own investigation into Petrobras’ American depositary receipts, which trade on Wall Street, said the Financial Times.
Sources at the DoJ declined to comment. “As a matter of policy, we generally neither confirm nor deny whether an issue is being investigated,” said a department spokesman consulted by this newspaper, Joan Faus reports. A spokesman at the Brazilian embassy in Washington said he had no information about any investigation.
After being queried by EL PAÍS, Petrobras said “it is unaware of any investigation by the US Department of Justice and the SEC
After being queried by EL PAÍS, Petrobras said in a release that “it is unaware of any investigation by the US Department of Justice and the SEC. We have not received notice from either agency regarding the opening of investigations into possible violations of US legislation.”
Authorized company spokesmen in Rio de Janeiro reiterated to EL PAÍS over the course of the last two days that the company neither confirms the investigation nor will make any comments.
Brazil’s vice-president, Michel Temer, did not deny the allegations and underscored that responsibility must be assigned “no matter who gets hurt.”
“If the US has opened an investigation, it must press on, just like Brazil is doing,” he said.
The US courts have the power to investigate any foreign company that is listed on the New York Stock Exchange, as is the case with Petrobras, whose shares fell 3.5% on Monday.
The Financial Times underscored that some of the alleged crimes were committed while Dilma Rousseff presided Petrobras’ board between 2003 and 2010. It was during her presidency that the state company bought a refinery in Pasadena, Texas, one of the transactions allegedly now under scrutiny in the US. Between 2006 and 2012 Petrobras paid €946 million for complete ownership of the refinery, a price 27 times higher than that paid two years earlier by Belgium’s Astra Oil.
Petrobras, which employs more than 86,000 people and produces 2,800,000 barrels of oil a day, has been engulfed in Operation Lava-Jato since March. The highly publicized case took a spectacular turn three weeks ago when three whistleblowers provided testimony about the way the commission fees and money-laundering system worked.
Former director of supply Paulo Roberto Costa told the judge that there was an institutionalized bribing system and that the Workers’ Party took home between one and three percent of all contracts executed between 2004 and 2012.
The Brazilian Audit Court estimates that irregular activities at Petrobras could account for €940 million, while the Federal Police thinks that the network might have diverted over €3.4 billion.