Trafigura, Glencore and Vitol Probed in Brazil Graft Scandal

(Bloomberg) -- Brazil’s federal police are investigating oil trading giants Vitol SA, Trafigura AG and Glencore Ltd. for their alleged role in a kickback scheme with officials at Petroleo Brasileiro SA to get favorable contract terms.

The three companies allegedly paid an accumulated $31 million in bribes to Petrobras executives and intermediaries from 2011 through 2014, public prosecutors said in a statement. Officials in Petrobras’ marketing and supply division at the Rio de Janeiro and Houston offices benefited from the kickbacks, according to the statement.

Federal police are carrying out 11 preventative arrests and 27 search and seizure orders issued by a federal judge. Arrest warrants have also been issued outside of Brazil, including one for an employee at Petrobras’ Houston offices, said Filipe Pace, a police chief involved in the investigation, during a televised news conference. The actions are part of the so-called Carwash probe that has landed behind bars several local business leaders and politicians, including former President Luiz Inacio Lula da Silva.

Batman and Popeye

Police gathered extensive evidence, including messages from executives of the three companies negotiating bribe payments for Petrobras employees through a intermediary company. In documents obtained during the investigation, beneficiaries of kickbacks were identified by code names including Batman and Popeye, said Pace. The goal, according to prosecutors, was to obtain advantages, get more favorable prices and carry out contracts with greater frequency.

“There are a lot of messages showing that executives from the companies had unquestionable knowledge” of the scheme, Pace said, citing evidence that the head of Vitol in Latin America was also involved.

Vitol has a zero tolerance policy on bribery and corruption, and always cooperates with relevant authorities, it said in an email. Glencore declined to comment on the issue when contacted by Bloomberg, and a Trafigura spokesperson said the company doesn’t comment on legal matters.

In a separate statement, police didn’t rule out that the scheme continues. Other trading companies are also being investigated, prosecutors said, without naming them.

Petrobras has been at the center of the corruption probe dubbed Operation Carwash that started in 2014 and has involved construction companies, banks, shipyards and leading politicians. In January, Petrobras agreed to pay almost $3 billion to compensate U.S. investors who lost money as a result of the company’s drop in market value. Then in September it agreed to pay $853 million the Brazilian Federal Prosecutor’s Office, the U.S. Department of Justice and the Security and Exchange Commission to settle claims.

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