What is the South American national energy company most prone to corruption? Many would answer Petrobras due to the ongoing operation “Car Wash” scandal. However right up there, in not exceeding the Brazilian national energy concern is Venezuela’s state oil company, Petroleos de Venezuela SA (PDVSA), lately having been run by cronies of former President Hugo Chavez. The U.S. government has been investigating PDVSA in connection with potential violations of the Foreign Corrupt Practices Act involving U.S. companies and money laundering by corrupt PDVSA officials.
Bloomberg recently reported that these investigations may very well gain speed and traction because the government of Switzerland “has agreed to turn over records from at least 18 banks involving” PDVSA. These records related to some known FCPA investigations, including those involving the U.S. company Derwick Associates and the recent guilty plea for FCPA violations by Abraham Jose Shiera Bastidas for his part in a bribery scheme involving PDVSA.
His plea was a part of the criminal case against Roberto Rincon and his company for its bribery of PDVSA employees, which goes to trial in April. Three PDVSA employees—Jose Luis Ramos Castillo, Christian Javier Maldonado Barillas, and Alfonzo Eliezer Gravina Munoz—also pled guilty to to accepting bribes while they were employed at PDVSA and assisted two businessmen in winnimg lucrative contracts from the state-owned company.
The Swiss banks themselves, however, might be in some hot water. Bloomberg noted, “The Venezuelan investigation could potentially expose some of the banks to harsh treatment from the Justice Department if any wrongdoing is found. Several Swiss banks, including UBS and EFG, have entered into agreements with U.S. authorities in recent years that require them to notify law enforcement about any potential misconduct.”
This acceptance of the treaty request for mutual assistance by the Swiss government from the U.S. government is a very large step forward in the fight against international bribery and corruption. Yet there may be more ramifications than simply the arrest and conviction of U.S. companies under the FCPA. The Justice Department has made clear that it will also seek to prosecute those individuals who are the recipients of ill-gotten gains, when it can do so.