Energy
Major Commodity Traders Investigated in Brazilian Corruption Probe
Published:
Last Updated:
An investigation code-named “Operation Car Wash” was begun in Brazil in 2014 that targeted senior managers and company processes at Petroleo Brasileiros S.A. (NYSE: PBR), better known as Petrobras, one of the world’s largest producers of crude oil and gas. Early results cost many Petrobras executives their jobs and led to the impeachment and removal from office of former President Dilma Rousseff in 2016. Her predecessor as president, Luiz Inacio Lula da Silva, was jailed as a result of the Car Wash probe.
Now the investigation apparently has roped in some of the world’s biggest companies. According to a Wednesday morning report in The Wall Street Journal, mining giant and commodity trader Glencore and commodity trading houses Vitol and Trafigura are being investigated for paying millions of dollars in bribes to Petrobras employees and outside middlemen in exchange for better trading contract deals.
The Wall Street Journal report is based on a November study by watchdog group Global Witness that reviewed hundreds of court documents related to the Car Wash investigation.
According to Global Witness, London-based Glencore is accused of paying bribes totaling $5.1 million to Petrobras employees and middlemen, Switzerland-based Vitol is accused of paying $5.1 million in bribes and Singapore-based Trafigura is accused of paying out $4.1 million to acquire deals for trading petroleum products and renting storage tanks.
Daniel Balint-Kurti, head of investigations for Global Witness, said:
The world’s three biggest commodities traders stand accused of paying millions in bribes to secure deals with Brazil’s national oil company, in one of the biggest corruption scandals of all time. This comes as no surprise to us. We’ve repeatedly uncovered how commodities traders engage in murky deals with dubious middle-men. It’s now time for prosecuting authorities in all relevant jurisdictions to get their act together and clean up the oil business.
Operation Car Wash has also revealed that 28 major corporations paid kickbacks to Petrobras employees in return for contracts to build the company’s production infrastructure. According to Global Witness, at least £1.4 billion ($1.78 billion).
The Wall Street Journal cites Brazilian prosecutor Athayde Ribeiro Costa who said at a press conference, “The main executives of the trading companies had total and unmistakable knowledge (of the bribes).”
Glencore and Trafigura declined to comment on the latest story. Vitol said only that it is cooperating with authorities in the investigation.
24/7 Wall St.Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
