If your company did business with Petrobras or the construction company Odebrecht SA over the past 10 years or so, things are about to get very interesting. Indeed, as reported in the Wall Street Journal, one headline in Brazil screamed, “The Doomsday Plea Bargain” and one commentator was quoted that “It will be like a hydrogen bomb.” All this because the “Jailed billionaire construction mogul Marcelo Odebrecht is ready to turn state’s evidence in a massive Brazilian corruption probe.”

An unidentified number of Odebrecht senior executives have been arrested. These arrested and having its former CEO sentenced to 19 years in prison seemed to cause the company to change its tune when on Wednesday, Odebrecht SA “confirmed that Mr. Odebrecht, its former chief executive, and other company employees are prepared to tell prosecutors what they know about a supplier cartel that siphoned billions from Brazil’s state oil company and channeled it into the pockets of crooked politicians.”

What makes all this so very interesting is that the company kept very detailed records on who it bribed, when and how much was paid. There was a “special department dedicated solely to keeping track of the bribes and their recipients.” One court posted document (later withdrawn) listed the names of some 200 politicians who took money from the company. One can only wonder what might be in these detailed records.

For any U.S. company which has done business anywhere in the world for either Petrobras or Odebrecht, this signals a new and very critical phase. Without any doubt Brazilian prosecutors will share this information with the U.S. counterparts at the Justice Department and the SEC. As the funding of the Petrobras bribes were based on inflated contracts where the overcharges were rebated back to corrupt state owned enterprise employees at Petrobras, it would be fair to assume these costs were passed down through subcontracts for those companies who worked with Odebrecht.

An article in Bloomberg reported that Brazilian authorities have opened investigations into Odebrecht’s work on the 2016 Olympic construction. This new phase may well implicate many more U.S. and European companies. Any CCO or compliance professional whose company has done work in Brazil or with a major Brazilian company over the past 10 years had better start looking and looking hard at your operations before the US government comes knocking and ringing FCPA bells.

Topics