Braskem’s US settlement comes to a close after “very positive” monitorship
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20 de May de 2020

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The Department of Justice and the Securities and Exchange Commission have certified that petrochemical company Braskem’s anti-corruption programme met the requirements of its 2016 foreign bribery agreement, the company’s lawyers at Paul Hastings said on 19 May. The DOJ also certified that Braskem’s plea agreement was successfully concluded, Paul Hastings said.

Braskem, advised by Paul Hastings partners Bob Luskin, Jay Darden, and Corinne Lammers, entered a $957 million resolution with US, Swiss and Brazilian authorities. Braskem, combined with its parent company Odebrecht, paid $3.5 billion – the largest-ever global foreign bribery settlement at the time.

The two Brazilian companies admitted to paying bribes worth $788 million across 12 countries from 2001.

As part of the settlement, Braskem was required to hire a monitor to oversee its efforts for three years. Both the US and Brazilian monitorships were overseen by Billy Jacobson and Guy Singer, who were partners at Orrick Herrington & Sutcliffe. Jacobson moved to Allen & Overy in late March.

Braskem’s Brazilian monitorship wrapped up  earlier that month when Brazilian authorities said the company had fulfilled its compliance obligations.

In an interview, Darden said that all the teams maintained a constant dialogue throughout the process concerning, for example, the work that needed to be done and the access the monitor required with senior management and the company’s board.

“Good, clear communication allowed for everyone to work in the same direction,” Darden said. He explained that his team knew Braskem well already, having spent a lot of time getting to know and understand the company since before the 2016 settlement.

The final approvals to close out the settlement occurred during the shutdowns sparked by the covid-19 pandemic. The team was fortunate, however, that most of the work was wrapped up before the stay-at-home orders began, Darden said.

Darden highlighted what Brazilian authorities have said previously, that, as the first Brazilian company to successfully complete a Foreign Corrupt Practices Act monitorship, it will be a model for others to look towards.

Jacobson, who co-led the monitorship, said it was a “very positive experience”. He said the company handled the monitorship “the way a company of engineers knows how” in terms of structuring the tasks. Braskem gave the monitorship lots of time, attention and resources, he said.

The monitors !led a series of lengthy, confidential reports with Brazilian authorities that are very detailed and got into lots of minutia, Jacobson said.

The monitors have also worked on a summary report for Brazilian authorities that will eventually be made public. While unable to go into details, Jacobson said the report aims to give the reader a sense of the level of work that went into the monitorship and the work that the company did.

Monitor reports are normally kept confidential – at least, in the US. Following a Freedom of Information Act lawsuit for reports by the monitor for German conglomerate Siemens, a US federal judge said the monitor’s findings should be kept secret because their disclosure would cause the company competitive harm.

Braskem’s case faced a hurdle in October when the company almost violated the terms of its settlement. The company made a mistake when seeking a tax deduction on a portion of its Brazilian payments – a move that was prohibited in the 2016 resolution. The company corrected the error, and said it didn’t realise at the time that the tax deduction could break the terms of the DOJ deal.

One month later, a Brooklyn federal court unsealed an indictment against Braskem’s former CEO Carlos Grubisich. The indictment alleges that Grubisich diverted hundreds of millions of dollars from the company to “a secret slush fund” used, in part, to pay bribes to Brazilian officials.

The case is part of a wider Brazilian probe known as Operation Car Wash, which was launched in 2014 to investigate bribes paid to officials at the country’s state controlled oil company, Petrobras.

Counsel to Braskem

In the US: Paul Hastings

Partners Bob Luskin, Jay Darden and Corinne Lammers and Sam Cooper with of counsel Neil Schumacher

In Brazil: Sampaio Ferraz Advogados

Partner Luis Wielewicki and Rodrigo Maia in São Paulo

 

Fonte: https://globalinvestigationsreview.com/article/jac/1227066/braskem’s-us-settlement-comes-to-a-close-after-“very-positive”-monitorship

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