Wednesday, January 20, 2021

Middleman implicates top executives at Vitol, Trafigura in alleged bribery ring – Reuters

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A middleman in a graft scheme at Brazilian state oil company Petrobras has implicated the chairman of global energy trading firm Vitol in a bribery operation to obtain oil contracts, as well as two high-ranking executives at rival Trafigura and its former CEO, according to plea bargain testimony seen by Reuters.

The individuals named in the previously unreported documents are Ian Taylor, the chairman of Vitol, as well as Claude Dauphin, the former chief executive and chairman of Trafigura. Trafigura co-head of oil trading José Larocca and chief operating officer Mike Wainwright were also implicated in the alleged scheme.

According to the documents, which summarize a plea deal reached in August with federal prosecutors, businessman Carlos Henrique Nogueira Herz testified that the executives knew of millions of dollars in bribes paid to Petrobras employees.

An oil industry insider with decades of experience, Herz pleaded guilty in August to Brazilian prosecutors’ charges that he formed a “criminal group” that used his contacts in the sector to funnel bribes from Vitol and Trafigura to Petrobras employees from 2011 to 2014 in return for sweetheart fuel trades benefiting the commodity trading firms.

If his accusations are proven, Herz’s testimony would up the ante in an ongoing Brazilian investigation of the commodity trading industry – codenamed Operation Without Limits – as it brings accusations of wrongdoing to the top echelons of some of the sector’s largest companies.

Herz provided prosecutors with dozens of pages of emails and bank statements, reviewed by Reuters, that offered extensive detail on the bribery scheme as a whole.

Herz provided no documentary evidence specifically linking Taylor to the allegedly illegal conduct. Herz said one of his business partners, a close personal associate of Taylor, informed him about the Vitol executive’s involvement in the bribery scheme.

Related: Petrobras unit CEO removed after implicated bribery allegations

He provided documents showing Trafigura’s Wainwright was copied on an email referencing what Herz alleges were bribe payments. In his August testimony, Herz said Wainwright was involved in facilitating the payments.

He did not provide any documentary evidence showing the involvement of Trafigura executives Dauphin and Larocca, whom he alleged were both aware of the bribery scheme but not directly involved.

BACK CHANNEL PAYMENTS

In his testimony, Herz said he knew of the executives’ knowledge and involvement in the alleged scheme in part because he personally set up a financial back channel in 2012 through which Trafigura bribes could be paid to Petrobras employees.

He provided to prosecutors dozens of pages of emails and bank statements detailing what he alleged were aspects of those negotiations. The documents did not mention or include correspondence from Dauphin or Larocca.

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