Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Videos
    • Podcasts
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Notable Leaders in Sustainability
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics Caps + Closures: A Global Online Event
    • Women Breaking the Mold Networking Forum
    • Bioplastics Live
    • Numbers that Matter Live
    • PFAS Live
    • Plastics in Politics Live
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Resin Prices Overview
    • Commodity Thermoplastics
    • High Temperature Thermoplastics
    • Engineering Thermoplastics
    • Recycled Plastics
    • Thermosets
    • Europe - Virgin
    • Europe - Recycled
    • Europe - Feedstock
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
December 22, 2016 01:00 AM

Braskem to pay nearly $1 billion for its part in 'largest foreign bribery case in history'

Rhoda Miel
Managing Editor
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Resin producer Braskem SA and its parent company, Brazil's Odebrecht SA, will pay a combined $3.5 billion in penalties after pleading guilty in what the U.S. Department of Justice termed the “largest foreign bribery case in history.”

    The Justice Department announced the resolution to a years-long investigation on Dec. 21, which also involved officials from Brazil and Switzerland.

    “Odebrecht and Braskem used a hidden but fully functioning Odebrecht business unit — a ‘Department of Bribery' so to speak — that systematically paid hundreds of millions of dollars to corrupt government officials in countries on three continents,” said Deputy Assistant Attorney General Sung-Hee Suh in a statement.

    Braskem, which ranks as North America's largest polypropylene resin maker, will pay $957 million after pleading guilty to one count of criminal information filed in the federal court for the Eastern District of New York charging it with conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA). The U.S. and Switzerland will each received 15 percent of that penalty with Brazil collecting the remaining 70 percent.

    The fee includes a criminal penalty of $632 million and $325 million in “disgorgement of profits.”

    In a statement on its web site, Braskem said it “acknowledges its responsibility for the acts of its former team members and agents, and regrets its past conduct. The company reaffirms its commitment to continue to cooperate with the authorities, and to adopting the appropriate and necessary measures to enhance its commitment to ethical business practices and transparency in its actions.

    “As part of the resolution, Braskem has also agreed to engage an external and independent anti-corruption compliance monitor for three years, during which the company will continue to enhance its anti-corruption compliance program above and beyond the extensive remedial steps already taken.”

    “We have overcome this phase and now we will concentrate our focus on the future,” said Fernando Musa, who was named CEO in May. “We are implementing more robust practices, policies and processes across the organization to enhance our governance and compliance system.”

    Odebrecht will pay approximately $2.6 billion for its part, with 10 percent going to the U.S., 10 percent to Switzerland and 80 percent to Brazil.

    The charges are the result of a massive investigation called Lava Jato or “Operation Carwash,” in which Odebrecht engaged in an “unparalleled bribery and bid-rigging scheme” starting at least as early as 2001 in which it paid approximately $788 million in bribes to government officials, their representatives and political parties in multiple countries, the Justice Department said.

    Court documents stated that the payments by Odebrecht went beyond Brazil to officials in Angola, Argentina, Colombia, the Dominican Republic, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru and Venezuela.

    As part of that scheme, Odebrecht created a secret financial structure within the company to account for and disburse bribe payments. By 2006, it had evolved to create the “Division of Structured Operations,” which “effectively functioned as a stand-alone bribe department within Odebrecht and its related entities.”

    The conduct resulted in corrupt payments and/or profits totaling approximately $3.336 billion, the justice department said.

    “In an attempt to conceal their crimes, the defendants used the global financial system — including the banking system in the United States — to disguise the source and disbursements of the bribe payments by passing funds through a series of shell companies,” said U.S. Attorney Robert L. Capers of the Eastern District of New York in a statement.

    The U.S. Department of Justice got involved because part of the planning took place in the U.S. The department's statement said that in 2014 and 2015, for examples, while in Miami two Odebrecht employees engaged in conduct related the their schemes, including “meetings with other co-conspirators to plan actions to be taken in connection with the Division of Structured Operations.”

    For its part, petrochemicals firm Braskem paid $250 million between 2006 and 2014 into Odebrchts off-book bribe payments system.

    “Using the Odebrecht system, Braskem authorized the payment of bribes to politicians and political parties in Brazil, as well as to an official at Patróleo Brasileiro SA (Petrobras) … in exchange Braskem received various benefits including: preferential rates from Petrobras for the purchase of raw materials used by the company; contracts with Petrobras; and favorable legislation and government programs that reduced the company's tax liabilities in Brazil.”

    The conduct resulted in “corrupt payments and/or profits totaling approximately $465 million.”

    Braskem opened Ethylene XXI petrochemical complex in Nanchital, Mexico, earlier this year. Braskem has a 75 percent stake in the joint venture and Mexico's Grupo IDESA SA de CV the remaining 25 percent.

    The company also is finalizing plans for a polypropylene plant in the U.S.

    RECOMMENDED FOR YOU
    Play Mart expanding in Kentucky, adding jobs
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    Superior Die Set seeks sale of Wisconsin plant, may be forced to close
    2
    Numbers That Matter Live September 2023: Plastics recession: Short-term blip or intermediate-term problem?
    3
    An 8,000-ton dream for Milacron, 20/20 Custom Molded Plastics
    4
    Flexible packaging firms highlight changing views on sustainability
    5
    Nova declares force majeure for PE resin at second Ontario site
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Find more newsletters at plasticsnews.com/newsletters.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Notable Leaders in Sustainability
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Videos
      • Podcasts
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics Caps + Closures: A Global Online Event
        • Women Breaking the Mold Networking Forum
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
      • Editorial Livestreams
        • Bioplastics Live
        • Numbers that Matter Live
        • PFAS Live
        • Plastics in Politics Live
        • PN Live: Mergers and Acquisitions
        • Polymer Points Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Resin Prices Overview
      • Commodity Thermoplastics
      • High Temperature Thermoplastics
      • Engineering Thermoplastics
      • Recycled Plastics
      • Thermosets
      • Europe - Virgin
      • Europe - Recycled
      • Europe - Feedstock
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified