November 18, 2020

Odebrecht monitorship comes to a close

On November 18, 2020, Brazilian construction conglomerate Odebrecht S.A. announced the conclusion of the independent monitorship imposed on the company and its affiliates, including its subsidiary Braskem S.A., as part of Odebrecht’s and Braskem’s December 2016 US Foreign Corrupt Practices Act plea agreements with the US Department of Justice.  In a press release, Odebrecht said that, per the requirements of the plea agreements, the monitor had certified that the company’s compliance program was reasonably “designed and implemented to prevent and detect potential violations [of the] anti-corruption laws.”

Odebrecht and Braskem had both pleaded guilty to one count of conspiracy to violate the anti-bribery provisions of the FCPA in December 2016.  When the companies pleaded guilty, the DOJ stated that Odebrecht and Braskem had utilized a “hidden but fully functioning Odebrecht business unit” to pay hundreds of millions of dollars in improper payments to government officials.  Then-Deputy Assistant Attorney General Sung-Hee Suh described the business unit as a “Department of Bribery.”  As part of the plea, the DOJ and Odebrecht agreed that the criminal penalty should be set at a little over $4.5 billion, although Odebrecht maintained that it was unable to pay such a large penalty.  Payments to the US government were to be offset by the amounts Odebrecht paid to Brazilian and Swiss enforcement authorities.  In April 2017, the DOJ completed an analysis of Odebrecht’s ability to pay and agreed with the company that the total criminal penalty should be reduced to $2.6 billion.  Braskem agreed to a fine and disgorgement totaling about $957 million, which was also spit between the Brazilian, Swiss and US governments.

Pursuant to the plea agreements with Odebrecht and Braskem, the monitorship began in February 2017.  According to Odebrecht’s press release, the monitor interviewed over 900 individuals, reviewed about 30,000 documents, and tested more than 5,000 transactions.  

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