On April 15, 2021, Jose Carlos Grubisich, the former chief executive officer of Brazilian petrochemical company Braskem SA, pleaded guilty to conspiring to violate the anti-bribery and books and records provisions of the US Foreign Corrupt Practices Act.
According to the US Department of Justice’s court filings, between 2002 and 2014, Grubisich—who was also a member of Braskem’s Board of Directors and served in various capacities for Odebrecht SA (a global construction conglomerate based in Brazil)—and others engaged in a wide-ranging scheme to divert approximately $250 million from Braskem into a secret slush fund, which they used to bribe government officials, political parties, and others in Brazil. This scheme revolved around a “stand-alone bribe department within Odebrecht” named the DSO, which received funds generated through fraudulent contracts and shell companies secretly controlled by Braskem and various Odebrecht subsidiaries. With respect to the books and records conspiracy, the DOJ’s filings allege that Grubisich falsely recorded the payments to Braskem’s shell companies as being for legitimate services, and that he agreed to use certain of these funds to bribe Brazilian officials to retain a lucrative petrochemical contract in Brazil. They also allege that Grubisich signed Sarbanes-Oxley certifications falsely stating that Braskems’s annual reports accurately reflected its financial condition. As part of his plea, Grubisich agreed to forfeit approximately $2.2 million. He is currently scheduled for sentencing on August 5, 2021.
Grubisich’s plea comes just over a year after Braskem announced the successful conclusion of independent monitorships required under 2016 global anti-corruption settlements Braskem and Odebrech SA entered with the DOJ, the US Securities and Exchange Commission, and Brazilian and Swiss prosecutors, in which Braskem agreed to adopt enhanced compliance procedures, continue cooperating with law enforcement in connection with their respective investigations and prosecutions, retain independent compliance monitors for three years (a time period which was later extended), and pay a combined global penalty of $957,625,737. Braskem’s Brazilian monitorship ended in March 2020 and its DOJ and SEC monitorship ended in May 2020. Just weeks before Grubisich’s plea, Braskem disclosed in a March 11, 2021 securities filing that it was investigating allegations of improper payments made by its indirect subsidiary Braskem Idesa in connection with “the Ethylene XXI project.”
DOJ Press Release | Indictment