Petrobras agreed with US and Brazilian authorities to pay $853.2 million in penalties to resolve the US government’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) in connection with Petrobras’s role in facilitating payments to politicians and political parties in Brazil, as well as a related Brazilian investigation.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, noted that members of Petrobras’s Executive Board and Board of Directors facilitated the payment of hundreds of millions of dollars in bribes to Brazilian politicians and political parties and then cooked the books to conceal the bribe payments from investors and regulator.
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Petrobras admitted that while the company’s American Depository Shares traded on the New York Stock Exchange, members of its Executive Board were involved in facilitating and directing millions of dollars in corrupt payments to politicians and political parties in Brazil, and members of Petrobras’s Board of Directors were facilitating bribes that a major Petrobras contractor was paying to Brazilian politicians.
Petrobras also admitted that it failed to make and keep books, records and accounts that accurately and fairly reflected the company’s capitalization of property, plant and equipment as a result of the bribes being generated by the company’s contractors with the cooperation of certain Petrobras executives, and that certain Petrobras executives signed false Sarbanes-Oxley (SOX) 302 sub-certifications while they were involved in, and were aware that other executives at Petrobras were involved in, obtaining and facilitating the payment of millions of dollars in bribes to Brazilian politicians, to Brazilian political parties and to themselves.
In addition, Petrobras admitted that certain executives did not implement internal financial and accounting controls in order to continue to facilitate bribe payments to Brazilian politicians and Brazilian political parties.
Petrobras agreed to pay to the SEC disgorgement and prejudgment interest totaling $933,473,797, which shall be reduced by the amount of any payment Petrobras makes to the class action Settlement Fund.