Petrobras agrees to pay $853mn to end ‘carwash’ probes

Bloomberg

Brazil’s state-run energy explorer Petrobras will pay $853.2 million to settle claims by authorities in its home country and the US stemming from allegations that its executives facilitated bribes to politicians and then concealed those payments from investors in one of South America’s biggest corruption scandals.
The bulk of the penalties — more than $682 million — will go to the Brazilian Federal Prosecutor’s Office, the company formally known as Petroleo Brasileiro SA said.
Another $171 million will be split evenly between the US Department of Justice and the Securities and Exchange Commission. Petrobras admitted that it violated the US Foreign Corrupt Practices Act by failing to keep accurate books and records.
“Executives at the highest levels of Petrobras — including members of its 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 regulators,” Assistant Attorney General Brian Benczkowski said in the Justice Department’s statement.
Petrobras climbed 6.3 percent to 21.46 reais in Sao Paulo, its biggest gain in three months. Moody’s Corp. said that, while the company’s ratings won’t be affected, the deal is credit positive as the amount to be paid is significantly lower than initially expected.
While the SEC technically required Petrobras to pay more than $1 billion to resolve the case, the US regulator credited the company $933 million for payments it already made as part of the settlement with shareholders, according to the statement. As a result, Petrobras won’t pay more than an $85.3 million fine to the SEC.
“The agreements completely end the investigations, so we are turning a page,” Rafael Mendes, Petrobras’s head of governance and compliance, said at the Rio Oil & Gas Conference.
Prosecutors have previously said Petrobras was at the heart of a corruption probe dubbed Operation Carwash in which other companies paid officials at the oil producer to win business. The investigation goes back roughly five years, and has involved construction companies, banks, shipyards and leading politicians.