U.S. judge approves Braskem $633 mln fine in record corruption case

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By Jonathan Stempel | NEW YORK

NEW YORK A U.S. judge on Thursday sentenced the
Brazilian petrochemical company Braskem SA to pay a
$632.6 million criminal fine, in connection with a corruption
case that led to the largest foreign bribery settlement in U.S.
history.

Braskem had agreed to the penalty when it pleaded guilty on
Dec. 21 to a conspiracy charge over a scheme that also involved
Brazil’s Odebrecht SA, Latin America’s largest
construction company.

The sentence was imposed by U.S. District Judge Raymond
Dearie in Brooklyn, a spokesman for U.S. Attorney Robert Capers
in Brooklyn said.

Odebrecht and Braskem agreed to pay at least $3.5 billion to
settle charges by U.S., Brazilian and Swiss regulators that they
schemed to pay hundreds of millions of dollars in bribes to
government officials around the world.

These included alleged payments to Brazil’s state-owned oil
company Petrobras unearthed in a nearly three-year
probe known as “Operation Car Wash” into political kickbacks in
that country.

The Petrobras scandal also contributed to the ouster last
August of Dilma Rousseff as Brazil’s president.

Petrobras and Odebrecht own Braskem.

Odebrecht also entered a guilty plea, and its combined
settlement with Braskem is a record for violations of the
Foreign Corrupt Practices Act, a U.S. anti-bribery law.

According to U.S. investigators, Braskem from 2006 to 2014
paid about $250 million into Odebrecht’s “secret, off-book bribe
payment system” and authorized bribes to Brazilian politicians,
Brazilian political parties and a Petrobras official.

Braskem’s misconduct led to about $465 million of improper
benefits for the company, including new contracts, favorable
legislation, and lower taxes, the investigators said.

As part of its settlement, Braskem agreed to employ an
independent compliance monitor for three years.

The fine was less than recommended under U.S. sentencing
guidelines, reflecting Braskem’s cooperation and remedial
measures.

Braskem is expected to pay about $957 million overall,
including the disgorgement of improper profit and benefits.

Most of the Odebrecht and Braskem payouts are expected to go
Brazilian authorities. Odebrecht has yet to be formally
sentenced.



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