Ex-Braskem CEO Pleads Guilty in $250 Million Bribery Case
(Bloomberg) -- The former chief executive officer of Braskem SA, Brazil’s largest petrochemicals company, admitted he took part in a sweeping bribery plot the U.S. said also involved Braskem’s parent company, Odebrecht SA.
Jose Carlos Grubisich, 64, pleaded guilty on Thursday to two counts of conspiracy to violate U.S. anti-bribery laws, acknowledging that he approved a $4.3 million payoff to an official of the state-owned energy company Petroleo Brasileiro SA for rights to build and operate a plant. Even under the deal he struck with prosecutors, Grubisich faces as long as 10 years in prison. His plea is the latest chapter in a sprawling corruption scandal centered on Petrobras.
Grubisich and his conspirators diverted about $250 million from Braskem to a secret slush fund for government officials, political parties and others in Brazil to gain an improper advantage for Braskem and Odebrecht, a global construction conglomerate also based in the country, the U.S. alleged. Braskem and Odebrecht pleaded guilty in 2016 to conspiracy to violate anti-bribery provisions of the U.S. Foreign Corrupt Practices Act and agreed to pay $3.5 billion to resolve a massive case brought by the U.S., Brazil and Switzerland.
“As CEO of Braskem, I was aware that Braskem was required to keep accurate books and records, and I had the ultimate responsibility to ensure that our SEC certifications were materially accurate,” Grubisich told U.S. District Judge Raymond Dearie during a hearing in federal court in Brooklyn, New York. “I knew that all of this conduct was not lawful or correct, and I regret that I failed to fulfill my responsibilities as CEO.”
Grubisich, who was CEO from 2002 to 2008, was charged with three counts in an indictment filed by the U.S. in 2019. As part of his plea deal, the U.S. money-laundering conspiracy charge.
“This is a plea for conduct that occurred in Brazil in 2006 and 2007, more than a decade ago,” Paul Shechtman and Edward Kim, lawyers for Grubisich, said in a joint statement after the hearing. “Jose Carlos was not the mastermind but went along reluctantly with the corporate culture at the time in his country.”
As part of the scheme, offshore shell companies were created that didn’t provide any legitimate services to Braskem but were used to divert money to the slush fund, called Caixa 2, Grubisich told the judge. He said he signed and approved records submitted to the U.S. Securities and Exchange Commission and financial disclosures about Braskem in the U.S.
“I agreed with others that Braskem would establish and allocate funds to Caixa,” he told Dearie.
The plea is one of several stemming from the U.S. Justice Department’s years-long investigation.
Braskem said in a statement that it has cooperated with authorities as part of “a global agreement that encompasses all themes related to the Operation Car Wash,” as the scandal is known. The company said it “reiterates its commitment to ethical, integral and transparent acting.”
Grubisich is scheduled to be sentenced on Aug. 5.
The case is U.S. v. Grubisich, 19-cr-00102, U.S. District Court, Eastern District of New York (Brooklyn).
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