My Geek Score: According to a document reviewed by Reuters, Brazilian authorities are investigating whether JP Morgan has played a role in the alleged Petrobras-involved bribery and money laundering program dating back to 2011.
So far, police have noted that JP Morgan purchased 300,000 barrels from Petrobras in 2011. The document evidence reviewed by Reuters includes emails between accomplices, witness testimony, and bank records.
Authorities of Brazil are working to determine and establish if the alleged bribery will continue. The documentary evidence has the affirmation of Rodrigo Berkowitz, who is a former Petrobras fuel trader.
Petrobras, the world’s seventh-largest oil producer, regularly buy and sell petroleum products under contracts that pursue the best possible prices for the company. However, US and Brazilian officials claim that others have bribed some Petrobras traders for more than a decade until 2018. In return, these traders are alleged to have bought fuel at a high price or sold it at a discounted price.
In December, Vitol agreed to pay $164 million to resolve charges by U.S. and Brazilian authorities for paying bribes in Brazil and other Latin American countries between 2005 and 2020. Brazilian prosecutors told Trafigura in November, that Geneva-based traders and at least two subsidiaries paid more than $1.5 million in bribes to Petrobras employees in 2012 and 2013.
Trafigura has consistently denied the allegations by Brazilian authorities. The external lawyer said that “the current Trafigura management was involved in or had knowledge of allegations of improper payments to Petrobras”.
Reuters quoted Brazilian law enforcement sources and court documents saying that in recent months, U.S. and Brazilian authorities have been working on connections in Brazil around 2012-2018, Free point Comics, a trading company based in Connecticut. There are also reports that suggest that it to be investigating.
The preliminary investigation is part of a more considerable investigation by Brazilian authorities and has investigated irregularities for years.
Federal police are trying to determine if JP Morgan has artificially secured Petrobras fuel transport at a low price by bribing employees of the Petrobras negotiation desk through a network of intermediaries.
Federal Police of Brazil and JP Morgan declined to comment on the investigation.
Rodrigo Berkowitz was previously confirmed to work with US and Brazilian authorities investigating the commodity trading industry. As Petroleo Brasileiro SA is known, Petrobras said in an email that it has zero tolerance for fraud and corruption. The company added that it has extensively supported Brazilian authorities in various investigations related to corruption.
The world’s top oil companies involved in a bribery scandal
The world’s largest commodity traders, including the leading independent oil trader Swiss Battle, are also facing scrutiny whether they have offered bribes to win contracts in various countries in Latin America. Vitol has admitted that it has committed a breach within the framework of an agreement signed with US and Brazilian authorities in 2020.
JPMorgan’s investigation has not been prosecuted, and it is unclear if it will be charged. This year, elements of JPMorgan’s investigation are unpublished by Brazilian police to a federal judge who oversees the investigation, including Reuters-reviewed bank records, emails, and WhatsApp messages exchanged between alleged conspirators. It was mentioned in the document.