It was over lunch some years ago that Paulo Roberto Costa, a former executive of Brazil’s state-owned oil company Petrobras, who today is the star witness in the country’s largest corruption case, claims he first met Maersk executive Viggo Andersen.
Together with a broker, Wanderley Saraiva Gandra, the three discussed how Maersk, the world’s largest shipping company, should expand its services to Petrobras from support vessels to include fuel transport ships, said Mr Costa, who has turned informant in exchange for leniency, in a statement to police released this month in the federal court in the state of Paraná.
Shortly after that conversation, which occurred in “2005 or 2006”, Mr Gandra through his brokerage began paying Mr Costa more than R$30,000 a month in “commissions” for providing confidential information on Petrobras’s upcoming shipping contract tenders to benefit Maersk, Mr Costa alleged. The payments only ended in March last year — when the Petrobras executive was thrown in prison for corruption.
The allegations of bribe-paying by Maersk through Gandra Brokerage, which first surfaced last year but were elaborated by Mr Costa in the statement released this month, have been vigorously denied by the Danish company, which says it has “found no indication that Maersk has engaged in any improper or illegal activity”.
But they underline how multinationals are increasingly being dragged into Brazil’s biggest corruption scandal, that threatens to trigger a technical default at the country’s most important company.
Brazilian police are investigating allegations that construction contractors, shipping companies, equipment suppliers and others bribed Petrobras officials and their political masters in Brazil’s ruling Workers’ party-led coalition in exchange for contracts.
As a virtual monopoly in a country with some of the most promising offshore oil reserves in the world, Petrobras has a web of relationships with most of the global leaders in the sector.
Those linked to the growing scandal, which some estimate cost Petrobras up to $20bn, will potentially face scrutiny not only from Brazilian investigators but also from the US Securities and Exchange Commission and Department of Justice.
“Petrobras is a case of apparently grand corruption sitting in a multi-jurisdictional environment,” said Martin Kenney, a Canadian lawyer who specialises in recovering funds lost through fraud.
Aside from Maersk, other multinationals linked to the scandal by former Petrobras executives-turned-informants include Rolls-Royce and SBM Offshore, a Netherlands-based supplier of offshore oil vessels.
Rolls-Royce has said it “will not tolerate improper business conduct of any sort” and will take necessary action to ensure compliance. SBM Offshore has said it is co-operating with the investigation.
The Brazilian shipbuilding units of Keppel Corporation and Sembcorp Marine, two Singaporean companies, along with three Brazilian shipbuilders with Japanese minority shareholders, including units of industrial groups Kawasaki and Mitsubishi and engineering companies IHI Corporation and JMU, have also been accused of participating in a bribes-for-contracts scheme at Sete Brasil, a drilling rig company part-owned by Petrobras.
Keppel and Sembcorp and the other shipbuilders have denied participating in such a scheme, which was described in a statement filed with the federal court in Paraná by former Petrobras and Sete Brasil executive Pedro Barusco.
Lawyers with knowledge of the US Foreign Corrupt Practices Act said the DoJ can probably claim jurisdiction over the Petrobras case. Petrobras has American depositary receipts and some of the transactions at the centre of the scandal allegedly involve the transfer of bribes in US dollars, or US-based assets, such as a refinery in Pasadena.
But the strength of US response may depend on how rigorously Brazilian authorities prosecute the case. If the DoJ believes Brazil has been too lenient or is seeking a political solution to the scandal, it might step up its actions in the US against those involved. In a corruption case involving Statoil and Iran in 2006, for example, the DoJ more than tripled a fine the Norwegian oil company had earlier faced in its home jurisdiction.
For the foreign companies allegedly involved, the use of agents or brokers as middlemen in deals with Petrobras could offer protection as long as there was nothing to suggest they knew these third parties were paying bribes.
“That’s where red flags come in,” said one US-based lawyer specialising in FCPA. These would be any suspicious activity by a middleman, such as requiring commissions be paid to a Swiss bank account for no clear reason, or other tell-tale signs.
In Maersk’s rebuttal of Mr Costa’s allegations, the Danish company said commissions to brokers were normal practice in the shipping industry. Those to Gandra Brokerage were made through the normal banking system at the standard industry rate — 1.25 per cent — with receipts.
“Maersk does not have a contract with former Petrobras director Paulo Roberto Costa,” the company said.