Braskem has disclosed a potential violation of the FCPA in Brazil to the SEC as two former executives have been accused of bribing Petrobras for raw material supply agreements.
In March, Braskem disclosed allegations made during legal proceedings against third parties that it was involved in improper payments. It started an internal investigation of the matter and has now disclosed that investigation to the SEC.
FCPA Blog said it is the first fallout from Operation Car Wash to be disclosed in an SEC filing. Operation Car Wash is a probe into bribery and corruption occurring in Brazil in connection with the energy company Petrobras. Petrobras employees are accused of taking bribes from the companies it contracts with and paying bribes to government officials in Brazil.
The Foreign Corrupt Practices Act prohibits bribery of foreign officials to obtain or retain business by U.S. companies and U.S. issuers. It also requires accurate books and records as well as sufficient internal accounting controls. Petrobras is a state-owned enterprise and its employees would be considered foreign officials under the law. Both Petrobras and Braskem are listed on the New York Stock Exchange.
Although we are based out of Philadelphia, we are closely following this topic because SEC whistleblowers can earn a reward under the whistleblower program created following the passage of Dodd-Frank. Our whistleblower attorneys represent individuals reporting bribery by companies like this one and we expect that we will see more whistleblowers report companies bribing Petrobras or other foreign officials in Brazil given the level of corruption that has been reported on in the country by the media.