Lava Jato investigation reveals bribes from Glencore unit

Brazil’s extensive Lava Jato investigation into payments to secure business with Petróleo Brasileiro SA in the early 2010s revealed how a unit of commodities giant Glencore Plc allegedly secured maritime fuel supply contracts.

Chemoil EnergySingapore-based company, which Glencore agreed to buy in late 2009 and assumed full control the following year, reportedly paid officials at the state-owned oil giant in 2010 and 2011 to obtain favorable oil contracts, according to documents recently released by a court of Brazil.

The bribes were paid to Petrobras operators by intermediaries and ex-Chemoil operator Emilio Heredia, who in March pleaded guilty to conspiring to manipulate the fuel oil market in another case investigated in the United States.

The Lava Jato investigation has sent dozens of politicians, traders, forex brokers and CEOs to jail since 2014, targeting corrupt business practices and leading companies like Glencore to reduce the use of intermediaries.

Investigations in the US, Switzerland and other countries have also linked business on behalf of major oil traders to corruption in different parts of the world.

In Brazil, Vitol Inc., Trafigura Group and Glencore were accused of paying a total of US $ 31 million in bribes to Petrobras officials and intermediaries between 2011 and 2014.

Glencore is cooperating fully with authorities and has also appointed a committee to oversee the response to the investigations on behalf of the company’s board of directors, spokesman Charles Watenphul said. Petrobras has also collaborated with investigations for years and has implemented stricter governance practices.

Vitol has repeatedly said that it is cooperating with the various investigations and that it does not tolerate corruption. In 2020, Vitol agreed to resolve allegations of participation in a bribery scheme in Brazil, Mexico and Ecuador for US $ 160 million.

Trafigura has denied the accusations by Brazilian authorities, saying they are not supported by evidence. The company has indicated that it has a zero tolerance policy for bribery and corruption, and strong compliance systems that meet international standards.

The Lava Jato investigation is based on emails, transcripts of internet chats, and the testimony of former Petrobras operator Rodrigo Berkowitz, known by the codename ‘Batman’. The recent findings include details about Chemoil’s involvement.

Berkowitz told Brazilian investigators that Heredia de Chemoil agreed to pay a bribe of 30 cents a barrel during a meeting at a conference in Miami in 2010. Chemoil was looking for bunker fuel oil to supply vessels in the US Gulf of Mexico. , according to Berkowitz’s testimony in the court document.

In 2011, the scheme continued with a different agent, an intermediary who bought fuel oil on behalf of Chemoil. In chat conversations, the actors hid behind codenames and keywords. The bribes were sometimes called ‘feijoada’, the Portuguese word for a Brazilian stew of black beans.

In federal court in San Francisco earlier this year, Heredia pleaded guilty to manipulating fuel oil prices between 2012 and 2016 while working for Glencore.

Berkowitz pleaded guilty to one count of conspiracy to commit money laundering in federal court in New York in 2019 and was released on a $ 500,000 bond. The ex-operator, who returned some US $ 333,000 in ill-gotten money to Petrobras, was collaborating with the authorities. According to a previous court file, he lived in Houston and was driving for Uber.