Glencore unit allegedly bribed Petrobras to secure supplies of maritime fuel
Brazil’s years-long Carwash probe into payoffs to secure
business with state-controlled energy company Petroleo Brasileiro (Petrobras)
in the early 2010s revealed how a unit of commodities-trading giant Glencore
allegedly secured maritime fuel-supply contracts.
Singapore-based Chemoil Energy, which Glencore agreed to buy at the end of 2009 and took full ownership over the following year, allegedly paid officials at the oil giant in 2010 and 2011 to obtain favourable fuel-oil contracts, according to documents recently disclosed by a court in Brazil.
The
bribes were paid to Petrobras traders by intermediaries and former Chemoil
trader Emilio Heredia, who pleaded guilty to conspiring to manipulate the
fuel-oil market in a separate case in the US in March.
The Carwash investigation has sent dozens of politicians,
traders, money changers and CEOs to jail since 2014, casting a spotlight on
corrupt trading practices and leading firms such as Glencore to reduce the use
of intermediaries. Probes in the US, Switzerland and other countries have also
tied business on behalf of the world’s top oil-trading firms to corruption in
different parts of the world.
In Brazil, Vitol, Trafigura Group and Glencore were accused
of paying a combined $31m in bribes to Petrobras officials and intermediaries
between 2011 and 2014.
Glencore is co-operating with authorities and has also
appointed a committee to oversee the response to investigations on behalf of
the company’s board, spokesperson Charles Watenphul said. Petrobras has also
collaborated with investigations for years and put in place stricter governance
practices.
Vitol and Trafigura have also said repeatedly they were
co-operating with the several investigations, and all three have said many
times they don’t condone corruption. In 2020, Vitol agreed to settle
allegations of involvement in a kickback scheme in Brazil, Mexico and Ecuador
for $160m.
The Carwash investigation is based on emails, transcripts of
internet chats and the testimonial of former Petrobras trader Rodrigo
Berkowitz, known by the code name “Batman”. The recent findings include details
on the involvement of Chemoil.
Berkowitz told Brazilian investigators that Chemoil’s
Heredia agreed to pay a 30c-per-barrel bribe during a meeting at a conference
in Miami in 2010. Chemoil was seeking bunker fuel oil to supply vessels in the
Gulf of Mexico, according to Berkowitz’s testimonial in the court document.
In 2011, the scheme continued, with a different agent, an
intermediary buying fuel oil on behalf of Chemoil. In chat conversations, the
actors hid behind code names and code words. The bribes were sometimes called
feijoada, the Portuguese word for a Brazilian black-bean stew.
In a federal court in San Francisco earlier this year,
Heredia pleaded guilty to manipulating fuel oil prices between 2012 and 2016
when he was working for Glencore.
Berkowitz pleaded guilty to a charge of conspiracy to commit
money-laundering in federal court in New York in 2019 and was released on
$500,000 bail. The former trader, who returned about $333,000 of ill-gotten
money to Petrobras, was collaborating with authorities. According to a previous
court filing, he was living in Houston and driving for Uber.
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