Daily Report for Executives provides in-depth coverage of unfolding legislative, regulatory, and judicial news from the nation’s capital, the states, and around the world. This daily news service...
By Ed Taylor
Dec. 28 — Brazil's antitrust agency launched an “administrative procedure” involving 21 construction companies and 59 executives accused of paying bribes to secure contracts with Petrobras, Brazil's state oil company.
The procedure that began Dec. 22 is, in effect, a process to determine whether the agency, Cade, will file formal charges against the companies and executives. The accused, which include Brazil's largest construction companies, will now be allowed to present their defenses.
Federal prosecutors, who have been investigating the kickback scheme since 2014, said bribes were set at a percentage of the value of the Petrobras contracts in what is being called Brazil's largest ever corruption scandal.
Prosecutors charged that the companies had to make the payoffs if they wanted to do business with Petrobras. Within Petrobras, four company directors allegedly ran the scheme between 2004 and 2012 and the payoffs were funneled through outside operators to three political parties: the governing Workers Party and its two top congressional allies.
Cade began its own investigation in March and said in the Dec. 22 announcement that the payoffs started in 1998 and continued until 2014 and involved contracts totaling over $9 billion for five Petrobras refineries.
“The alleged cartel would have been organized in a dynamic manner, adapting itself to diverse changes that occurred on the market and within the institutional environment in order to guarantee that the public tenders conducted by Petrobras met the interests of the involved companies,” it said.
The accused companies and executives will have 30 days to present their defenses. A final ruling will be issued by Cade's administrative court.
Cade could issue fines of up to 20 percent of a company's annual revenues and could ban a company from receiving future government contracts.
In March, Cade signed a leniency agreement with two of the construction companies, both part of the same group called Setal. They confessed to price fixing and agreed to provide information to investigators, including the names of the other companies involved in the cartel.
Cade officials said they expect the Petrobras scandal to be the largest antitrust case in Brazil's history.
To contact the reporter on this story: Ed Taylor in Rio de Janeiro at email@example.com
To contact the editor responsible for this story: Tiffany Friesen Milone at firstname.lastname@example.org
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)