February 5, 2020

Odebrecht plea agreement extended

On January 29, 2020, the US Department of Justice and Odebrecht S.A. submitted a joint letter to the US District Court for the Eastern District of New York, advising the court that the parties had agreed to extend the term of Odebrecht’s December 21, 2016 plea agreement for about nine additional months.  Odebrecht’s obligations under the plea agreement were set to expire on February 20, 2020, but will now continue until November 16, 2020.  The plea agreement gave the DOJ the ability, in its sole discretion, to extend the term of the obligations under the plea agreement for up to one year.  As stated in the letter, the DOJ required, and Odebrecht agreed to, an extension for about nine months.  

Odebrecht, a global construction conglomerate based in Brazil, and Braskem S.A., an entity in which Odebrecht owned 50.11% of the voting shares, pleaded guilty to conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act.  The December 2016 plea agreements stated that the companies conspired to pay hundreds of millions of dollars to government officials in a dozen countries.  The DOJ described the conduct as a “massive and unparalleled bribery and bid-rigging scheme.”  As part of a global settlement, Braskem agreed to pay about $957 million to US, Brazilian, and Swiss enforcement authorities, and Odebrecht agreed to a combined global penalty of at least $2.6 billion and at most $4.5 billion, pending an ability to pay analysis.  On April 17, 2017, the ability to pay analysis was finalized, and a global settlement amount of $2.6 billion was set for Odebrecht.  

Under the terms of the plea agreement, Odebrecht agreed to implement and maintain a compliance and ethics program and to retain an independent compliance monitor.  In the January 29, 2020 letter, the DOJ stated that Odebrecht had failed to (1) “fulfill the monitorship obligations” and (2) failed to “implement and maintain a compliance and ethics program designed to prevent and detect violations of the FCPA and other applicable anticorruption laws throughout its operations.”  The failure to fulfill the monitorship obligations included “failing to adopt and implement the agreed upon recommendations of the monitor and failing to allow the monitor to complete the monitorship.”  Odebrecht acknowledged its failure to fulfill the obligations of the plea agreement in the letter.

DOJ letter | Plea agreement | DOJ press release (2016)