On November 20, 2019, the US District Court for the Eastern District of New York unsealed an indictment against Jose Carlos Grubisich, a Brazilian national who between 2002 and 2008 served as chief executive officer of Braskem SA, a Brazilian petrochemicals company minority-owned by Brazilian conglomerate Odebrecht SA (which controlled Braskem through its ownership of a majority of Braskem’s voting shares). The indictment, which was filed on February 27, 2019, charges Grubisich with conspiracy to violate the US Foreign Corrupt Practices Act (FCPA), conspiracy to commit money laundering, and failure to certify Braskem’s financial reports.
The indictment alleges that Grubisich conspired to bribe Brazilian government officials and political parties in order to advance the interests of Braskem, including to ensure that Braskem could retain an important contract related to a petrochemical project in Brazil, and to ensure that Braskem could obtain favorable pricing in contract negotiations with Petrobras. Grubisich and other senior executives at Braskem and Odebrecht relied on a network of slush funds and shell companies to divert approximately $250 million to these Brazilian government officials and political parties. According to the indictment, Grubisich in particular played an instrumental role in creating caixa dois—an off-book slush fund created by paying fraudulent “commissions” to shell companies—and personally negotiated and approved bribes to government officials using money from the caixa dois.
Braskem and Odebrecht have both previously pleaded guilty to FCPA violations in connection with this conduct.