Petrobras to pay $853.2m fine to settle Car Wash corruption scandal

Brazilian state-owned oil company Petrobras has agreed to pay $853.2m in penalties to the US and Brazilian authorities to settle long-standing investigations into the alleged Car Wash corruption row.

The fines will be used to settle violations of the US Foreign Corrupt Practices Act (FCPA).

Listed on the New York Stock Exchange in the US, the company was accused of bribing politicians and political parties in Brazil and then trying to conceal these payments from investors and regulatory agencies. The bribes were paid to secure contracts for contractors at inflated prices.

Brazil will receive around 80% or $682.56m of the total fine, and the remaining 20% will be split between the US Department of Justice (DOJ) and the Securities and Exchange Commission.

US Attorney Zachary Terwilliger said: “Protecting the integrity of US financial markets is one of the highest priorities of this administration. Those who choose to access our capital markets while failing to disclose the corrupt activities of company executives will be held accountable.”

Petrobras admitted that members of its board of directors facilitated bribes paid by a major contractor to Brazilian politicians.

In addition, the company confessed to violations related to books, records and accounts between 2003 and 2012.

According to the company, DOJ recognises Petrobras’s status as a victim of the embezzlement scheme carried out by its executives.

In a statement, Petrobras said: “The resolution is in Petrobras’s best interest and that of its shareholders. It puts an end to the uncertainties, risks, burdens and costs of potential prosecution and protracted litigation in the US.”

Operation Car Wash initially started with a money-laundering investigation in Brazil before expanding to cover corruption allegations at Petrobras.