BRASKEM PNA (BOV:BRKM5)
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1 Month : From Nov 2019 to Dec 2019
By Corinne Ramey and Paulo Trevisani
The former chief executive of Brazilian petrochemical company Braskem SA was arrested for his alleged role in what U.S. prosecutors called a scheme to divert $250 million in company money into a secret slush fund used to pay bribes to government officials.
José Carlos Grubisich, who served as CEO from 2002 through 2008, was arrested Wednesday at Kennedy International Airport in New York. A three-count indictment unsealed Wednesday in federal court in Brooklyn charges him with money-laundering conspiracy and conspiracy to violate antibribery and books-and-records provisions of the Foreign Corrupt Practices Act.
A lawyer for Mr. Grubisich didn't respond to a request for comment.
Prosecutors said Mr. Grubisich and his unnamed co-conspirators created their slush fund through payments made from Braskem's bank accounts in New York, Florida and Brazil.
The indictment adds a new layer of allegations to corruption scandals that have roiled Brazilian politics and business since 2014 in the far-reaching probe known as Operation Carwash.
Brazilian investigators have found that for years executives at the state-controlled oil giant Petróleo Brasileiro SA, or Petrobras, took bribes from some of the country's largest contractors. In turn, they rigged bids for coveted contracts in Brazil and other countries. Petrobras holds 47% of Braskem.
The scheme involved shell companies in several countries used to launder bribe money. Over the years, several of Latin America's political and business leaders were enmeshed by Carwash, and many ended up in jail.
The largest contractor involved in Carwash was Odebrecht SA, which has 50.1% of Braskem's shares.
In 2016, Odebrecht and Braskem both agreed to pay a combined $3.5 billion to resolve charges with authorities in the U.S., Brazil and Switzerland. Both companies pleaded guilty.
"The Braskem bribery and money-laundering scheme was a part of a larger conspiracy, whereby Odebrecht and its related companies paid approximately $788 million in bribes to government officials and political parties in Brazil and multiple other countries to obtain and retain business," federal prosecutors wrote Wednesday in a letter to a judge.
Braskem didn't respond to a request for comment. Odebrecht has said it was cooperating with federal prosecutors. Petrobras has said it was a victim of the scheme and was cooperating with the investigation.
Wednesday's indictment alleges that from 2002 to 2014, Mr. Grubisich and others made millions of dollars in payments to Brazilian government officials and political parties. These included approving a $4.3 million bribe to an unnamed foreign official in exchange for help retraining Petrobras contracts.
Mr. Grubisich also signed false certifications that were submitted the U.S. Securities and Exchange Commission, the indictment alleged.
In a letter to the judge, prosecutors asked that Mr. Grubisch be held in jail while awaiting trial, saying he had no known ties to the U.S. and the financial means to flee.
Write to Corinne Ramey at Corinne.Ramey@wsj.com and Paulo Trevisani at firstname.lastname@example.org
(END) Dow Jones Newswires
November 20, 2019 17:04 ET (22:04 GMT)
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