International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Thursday, March 16, 2017

U.S. v. Odebrecht: White Collar Crime & the DOJ

One example I will begin with is a FCPA case, Odebrecht, a case that squarely demonstrates how the world is partnering to investigate and prosecute corruption.  Among the most Justice logouseful tools in the department’s arsenal to prosecute corruption is the enforcement of the FCPA’s anti-bribery provisions.  These prosecutions are necessary to combat global corruption that stifles economic growth, creates an uneven playing field for businesses and corporations, and threatens the national security of the United States and other civilized nations.  Often, however, the principal acts of criminality are committed in foreign countries and often by foreign actors. 

In December of last year, Brazilian construction conglomerate Odebrecht and Brazilian petrochemical company Braskem pleaded guilty and agreed to pay a combined total penalty of around $3.5 billion to resolve charges with the United States, Brazil and Switzerland—three jurisdictions – arising out of their schemes to pay hundreds of millions of dollars in bribes to government officials around the world.  Odebrecht and Braskem engaged in a world-wide bribery scheme designed to improperly obtain and retain business contracts in 12 countries: Angola, Argentina, Brazil, Colombia, Dominican Republic, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru and Venezuela.  As part of the scheme, Odebrecht and its co-conspirators created and funded an elaborate, secret financial structure within the company that operated to account for and disburse bribe payments to foreign political parties, foreign officials, and their representatives, including through U.S. financial institutions and offshore shell companies set up from within the United States.

Multiple other countries have opened investigations and prosecutions of Odebrecht and individuals allegedly involved in the scheme.  It has been reported that more than 10 additional countries have publicly confirmed their own investigations into the corruption at Odebrecht.    

Indeed, in some countries, domestic legislation mandates the immediate initiation of criminal investigations when confronted with evidence of public corruption.  Many of our foreign partners have been acting swiftly to bring corrupt officials to justice in their countries.  For example, Brazil has already charged more than 70 individuals just in this one case.  

As a general matter, the Criminal Division’s Fraud Section, in coordination with the Office of International Affairs, is able effectively to share information and evidence with foreign authorities.  Also, it is often the case that plea agreements with companies require them to cooperate by continuing to provide evidence and information to the prosecution team.  The combination of those two phenomena often position our prosecution teams with the ability to assist our foreign counterparts to advance their work.  Ideally, of course, the consequence of the enforcement efforts of the department is to encourage voluntary compliance with the FCPA and other applicable domestic laws that disallow conduct, such as bribery to foreign officials.

Let me just add that, as it relates to the FCPA, from a policy perspective, we like to see more countries enforcing anti-bribery laws.  Since the 1980s, there has been a growing international recognition that all countries should aim to disrupt corrupt payments in order to create an even playing field for global business.  In the absence of effective domestic anti-corruption laws or resources to prosecute violators of those laws, we would be left with geographical gaps to a collective global effort to halt corruption in its tracks.  Allow me to move on to another case example to highlight a few other points.

http://lawprofessors.typepad.com/intfinlaw/2017/03/us-v-odebrecht-white-collar-crime-the-doj.html

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