Former Brazilian Petrochemical Executive Charged With FCPA Violations
The former CEO of a Brazilian petrochemical company was charged with violations of the Foreign Corrupt Practices Act for his role in a money-laundering and bribery scheme, the Justice Department said Nov. 20. Jose Carlos Grubisich, the CEO of Braskem and an official of its parent company, Odebrecht, bribed Brazilian government officials and political parties in violation of the FCPA’s anti-bribery and books and records provision, the agency said.
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Grubisich worked with other Braskem and Odebrecht employees to transfer $250 million of Braskem’s funds into a “secret slush fund” used to bribe government officials. The bribes were used to retain Braskem’s “business advantages,” the Justice Department said. The slush fund was allegedly “generated” by payments from Braskem’s bank accounts in Brazil, New York and Florida “pursuant to fraudulent contracts with offshore shell companies that were secretly controlled by Braskem.” The shell companies funneled the slush funds to Odebrecht, which made the corrupt payments on Braskem’s behalf, the Justice Department said.
Grubisich negotiated and approved the bribes to government officials, including a payment that ensured Braskem retained a contract for a “significant petrochemical project” in Brazil, the agency said. Another payment ensured Braskem obtained “favorable pricing” during contract negotiations with Petroleo Brasileiro, Brazil’s state-owned oil company. Grubisich also agreed to falsify Braskem’s records by falsely reporting payments to the company’s offshore shell companies as “commissions,” the Justice Department said. He signed “false certifications” submitted to the Securities and Exchange Commission attesting that Braskem’s annual reports were accurate and that the company “had disclosed all fraudulent conduct.”