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Brazil’s years-long Carwash probe into payoffs to secure business with state-controlled energy company Petroleo Brasileiro (Petrobras) in the early 2010s revealed how a unit of commodities-trading giant Glencore allegedly secured maritime fuel-supply contracts. 

Singapore-based Chemoil Energy, which Glencore agreed to buy at the end of 2009 and took full ownership over the following year, allegedly paid officials at the oil giant in 2010 and 2011 to obtain favourable fuel-oil contracts, according to documents recently disclosed by a court in Brazil. The bribes were paid to Petrobras traders by intermediaries and former Chemoil trader Emilio Heredia, who pleaded guilty to conspiring to manipulate the fuel-oil market in a separate case in the US in March. 

The Carwash investigation has sent dozens of politicians, traders, money changers and CEOs to jail since 2014, casting a spotlight on corrupt trading practices and leading firms such as Glencore to reduce the use of intermediaries. Probes in the US, Switzerland and other countries have also tied business on behalf of the world’s top oil-trading firms to corruption in different parts of the world. 

In Brazil, Vitol, Trafigura Group and Glencore were accused of paying a combined $31m in bribes to Petrobras officials and intermediaries between 2011 and 2014. 

Glencore is co-operating with authorities and has also appointed a committee to oversee the response to investigations on behalf of the company’s board, spokesperson Charles Watenphul said. Petrobras has also collaborated with investigations for years and put in place stricter governance practices. 

Vitol and Trafigura have also said repeatedly they were co-operating with the several investigations, and all three have said many times they don’t condone corruption. In 2020, Vitol agreed to settle allegations of involvement in a kickback scheme in Brazil, Mexico and Ecuador for $160m. 

The Carwash investigation is based on emails, transcripts of internet chats and the testimonial of former Petrobras trader Rodrigo Berkowitz, known by the code name “Batman”. The recent findings include details on the involvement of Chemoil. 

Berkowitz told Brazilian investigators that Chemoil’s Heredia agreed to pay a 30c-per-barrel bribe during a meeting at a conference in Miami in 2010. Chemoil was seeking bunker fuel oil to supply vessels in the Gulf of Mexico, according to Berkowitz’s testimonial in the court document. 

In 2011, the scheme continued, with a different agent, an intermediary buying fuel oil on behalf of Chemoil. In chat conversations, the actors hid behind code names and code words. The bribes were sometimes called feijoada, the Portuguese word for a Brazilian black-bean stew. 

In a federal court in San Francisco earlier this year, Heredia pleaded guilty to manipulating fuel oil prices between 2012 and 2016 when he was working for Glencore. 

Berkowitz pleaded guilty to a charge of conspiracy to commit money-laundering in federal court in New York in 2019 and was released on $500,000 bail. The former trader, who returned about $333,000 of ill-gotten money to Petrobras, was collaborating with authorities. According to a previous court filing, he was living in Houston and driving for Uber. 

Bloomberg News. More stories like this are available on bloomberg.com


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