Energy Trader Vitol to Pay $90 Million to Settle U.S. Corruption Charges

By Dave Michaels and Dylan Tokar 

An American subsidiary of Swiss-based energy firm Vitol Group agreed to pay $90 million to settle criminal charges that its employees paid bribes to gain an advantage when bidding for oil in Brazil, Mexico and Ecuador.

Vitol Inc.'s deal with the Justice Department, announced Thursday in Brooklyn federal court, is the first in what is expected to be a series of similar settlements involving global commodity trading companies. Some of the claims grew out of a sweeping corruption scandal in Brazil that focused on bribery of officials at state-controlled Petróleo Brasileiro SA, also known as Petrobras.

The deal includes a deferred-prosecution agreement that allows Vitol to escape charges if it stays out of trouble for three years. The company will also pay an additional $45 million in a coordinated settlement with Brazilian authorities, according to U.S. prosecutors.

The investigation of Vitol, accused of paying millions in bribes over a decade, also involved the Commodity Futures Trading Commission. The fine paid to the CFTC, a civil regulatory agency, wasn't disclosed at Thursday's court hearing.

Vitol, a private company, trades 8 million barrels a day of crude oil and also manages upstream assets and refineries, according to its website. Other companies that have faced similar investigations include Glencore PLC and Singapore-based Trafigura Group Pte. Ltd.

Brazilian prosecutors announced in 2018 that they were probing Vitol, Glencore and Trafigura for paying bribes that won them better terms on trading contracts. The authorities said bribes were paid to executives of Petrobras's marketing and trading department and involved employees in the state-controlled oil producer's Houston and Rio de Janeiro offices.

Following that announcement, Petrobras in 2018 temporarily suspended trading with the three companies.

A Glencore spokesman declined to comment. Glencore disclosed in August that it has spent $56 million in the first half of 2020 defending itself from various government investigations, including those undertaken by the DOJ, CFTC, U.K.'s Serious Fraud Office and Brazilian authorities.

A spokesperson for Trafigura said the company has responded to information requests from authorities and hired lawyers at Quinn Emanuel Urquhart & Sullivan to investigate allegations of improper payments concerning Petrobras.

"Based on its review to date, which is ongoing, Quinn Emanuel believes any allegations that current management were involved in, or had knowledge of, alleged improper payments to Petrobras are unsupported by the evidence and untrue," the spokesperson said.

Write to Dave Michaels at [e-mail] and Dylan Tokar at [e-mail]

(END) Dow Jones Newswires

December 03, 2020 14:40 ET (19:40 GMT)

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