Foreign Companies Named in Brazil’s “Car Wash” Probe

Petrobras 10000 drillship. Photo: Petrobras

May 27 (Reuters) – Brazilian police said this week they were investigating local units of three international steelmakers in a massive corruption investigation involving the country’s state-run oil company, Petroleo Brasileiro SA, or Petrobras.

Prosecutors have identified at least 285 foreign companies that have done business with people who are under investigation, though they say that does not mean all the firms are suspected of graft. Brazilian investigators are working closely with U.S. and other international authorities.

Below are foreign companies that have appeared in Brazil’s largest-ever corruption case named “Operation Car Wash” for a Brasilia gas station where some of the alleged money laundering took place. For more than two years the investigation has ensnared the country’s largest construction companies and high-profile politicians.

Petrobras wrote off $2.1 billion in graft losses, though federal police and prosecutors believe the amount siphoned from the company for more than a decade could be much higher.

United States Steel: Prosecutors on Tuesday said Apolo Tubulars, which is 50 percent owned by United States Steel, allegedly paid bribes to win pipe contracts with Petrobras between 2009 and 2012. U.S. Steel said it is reviewing the matter and is in contact with Apolo Tubulars. Apolo Tubulars said it was cooperating with authorities.

Tenaris SA: Luxembourg-based Tenaris’ Brazilian unit Confab was also accused of paying kickbacks to obtain contracts with Petrobras. Tenaris is part of Italian-Argentine steel group Techint. Tenaris officials did not immediately respond to requests for comment, but Confab said it has no evidence its employees paid bribes and is cooperating with authorities.

Vallourec SA: Police said on Tuesday they had no proof of corruption at French pipe maker Vallourec SA but were continuing their investigation of the company’s Brazilian unit, V&M. V&M said it was facing no charges and had been guided by legal standards throughout 60 years of business with Petrobras.

Keppel Corp Ltd: Prosecutors charged a former lobbyist for Keppel Fels, the local unit of Singapore oil rig builder Keppel Corp Ltd, with corruption in April but said they did not have enough evidence to prosecute any Keppel employees. Keppel said it put its relationship with the lobbyist on hold and has a zero-tolerance stance against any form of illegal activity. Prosecutors said political strategist Joao Santana received bribes in contracts involving Petrobras, shipbuilder Sete Brasil and Keppel Fels.

Ensco Plc: Petrobras ended a drillship contract with rig contractor Ensco Plc in January because of corruption allegations. Petrobras chartered the DS-5 drillship in 2008, when it was owned by Pride International, a company Ensco bought in 2011. Prosecutors have said they planned to present charges related to the DS-5 charter. Ensco, which is headquartered in London, says it has found no evidence that Pride, the company, or any current or former employees were aware of or involved in wrongdoing. Astra Oil: The unit of Belgian-controlled Astra Transcor Energy allegedly paid $15 million in bribes to encourage Petrobras to buy part of Astra’s Texas-based Pasadena Refining Systems Inc for $1.2 billion in 2006, prosecutors said in November. Astra has not responded to request for comment.

Transocean Ltd: A former Petrobras executive said in plea- bargain testimony made public in September that he was offered payments in 2007 in exchange for Switzerland-based Transocean Ltd winning a drillship contract. Transocean said it requires employees and everyone making visits on its behalf to adhere to high standards for integrity. Vantage Drilling: Prosecutors said in August that a lobbyist for U.S.-based Vantage Drilling arranged bribes for former Petrobras executives at the Four Seasons Hotel in New York in exchange for awarding Vantage Drilling a 2009 drillship contract. Vantage executives have not been charged and the company says it fully met the terms of the drillship contract and has found no evidence of improper activity. Saipem SpA: Prosecutors in July 2015 said they are investigating whether a former Petrobras executive accepted bribes in exchange for favoring Italy’s Saipem SpA on a contract for an undersea gas pipeline for offshore subsalt fields in Brazil. Saipem said at the time it had not yet been notified by authorities but planned to cooperate.

Sembcorp Marine Ltd: A former Petrobras executive said in plea testimony made public in March 2015 that a representative of Sembcorp’s Jurong Aracruz shipyard was involved in bribe payments. Sembcorp Marine Ltd said it did not make any illegal payment.

Maersk Group: Prosecutors say Denmark’s shipping and oil group Maersk allegedly paid bribes to win Petrobras contracts. Maersk said it first met with Brazilian investigators in July 2014 and received a request for additional information late last year. Maersk has also said it is normal and customary to use brokers to promote tanker-operators’ services to customers around the world and to pay brokers a 1.25 percent commission on earnings from charter contracts.

Rolls-Royce Holdings Plc : The British engineering company that makes equipment for offshore oil and gas rigs has said it is cooperating with the investigation, though prosecutors say it has not signed a formal cooperation deal.

Skanska AB : Swedish builder Skanska’s local unit Skanska Brasil Ltda is one of some 20 companies being investigated by Brazil’s anti-trust regulator Cade for forming a cartel that fixed prices and overcharged Petrobras for work in order to pass on bribes worth 1 percent to 3 percent of contracts. Skanska said it has a zero tolerance against unethical behavior and takes the suspicions very seriously but does not seek any leniency agreement as it denies being part of a cartel.

SBM Offshore : A former Petrobras executive said in plea-bargain testimony seen by Reuters that he had received bribes from an SBM point person between 1995 and 2003. The world’s top oil production ship leasing company reached a record $240 million settlement in November 2014 with Dutch and U.S. authorities relating to corruption charges in Angola, Brazil and Equatorial Guinea. The company said in February U.S. authorities had re-opened an inquiry into bribery allegations, however. SBM is also seeking a leniency deal in Brazil. (Compiled by Caroline Stauffer in Sao Paulo; Editing by Phil Berlowitz)

(c) Copyright Thomson Reuters 2016.