Global commodities trader Trafigura is under investigation by US authorities for alleged corruption and market manipulation relating to oil trading, the Guardian has learned.
The Commodities and Futures Trading Commission (CFTC) is leading a far-reaching probe into the activities of the oil and metals trading house, including its operations in South America.
The Washington-based financial markets regulator has issued subpoenas to a large pool of people, ordering them to hand over all information they hold relating to the company’s activities.
The subpoenas demand information going back at least four years relating to “manipulation and corruption involving oil products and trading”.
Recipients of the subpoena have been set a strict deadline to hand over documents and data to the CFTC, the Guardian understands.
The investigation is understood to relate to Trafigura’s oil trading division, which is based in Singapore but also has offices in London and Geneva.
The unit’s traders negotiate with other companies and state-backed entities to buy and sell large quantities of oil and petroleum products in resource-rich regions such as South America and Africa.
The US probe comes nearly 18 months after the Guardian revealed that Trafigura had been named in Brazil’s vast “Car Wash” corruption probe, alongside rival commodities traders Glencore and Vitol. It is unclear whether the CFTC’s investigation is related.
The firm’s involvement emerged after campaign group Global Witness unearthed documents relating to Brazilian prosecutors’ pursuit of members of a group of businessmen called Brasil Trade.
The papers alleged links between Trafigura and Brasil Trade member Jorge Luz, who became known as the Deacon of Bribes in Brazil and was sentenced in October 2017 to 13 years and eight months for his part in orchestrating bribes worth $20m (£15.8m).
According to the documents, Luz discussed “a proposal from Trafigura” with state oil firm Petrobras, under which the trading firm would lend Petrobras money in exchange for discounted oil.
Petrobras executives rejected the plan according to the same document.
Trafigura told Global Witness in 2018 that the proposal did not result in any agreement and that Luz was not retained to lobby for them.
Rival commodities trading firm Glencore, which was also named in connection with the Car Wash probe, last year became the focus of a CFTC investigation into alleged corrupt practices.
In a statement issued when it disclosed the CFTC’s investigation, Glencore said it “understands that the CFTC’s investigations are at an early stage and have a similar scope in terms of subject matter as the current ongoing investigation by the US Department of Justice”.
It added that it would cooperate with the CFTC.
The CFTC and the Department of Justice both declined to say whether they were investigating Trafigura.
Trafigura also declined to comment.
The commodities trading firm is not a household name but it has global reach, operating in 41 countries and trading vast quantities of oil products, metals and minerals.
The company is legally registered in Singapore but is owned by Farringford NV, a firm registered on the island of Curacao, in the Caribbean about 40 miles (65km) north of Venezuela.
Farringford’s ultimate controlling parties are not known, although Trafigura says that it is owned by its employees.
French billionaire Claude Dauphin set up Trafigura in 1993 and the company has since grown into one of the world’s largest commodities trading firms, alongside rivals such as Vitol and Glencore.
It also shares some of its roots with Glencore.
Before starting Trafigura, Dauphin worked for Marc Rich, a legendary commodities trader who was indicted in the US for tax evasion and for striking sanctions-busting oil deals with Iran. Rich was pardoned by Bill Clinton on his last day as president.
Rich’s company was bought out by senior employees and became Glencore, while Dauphin went on to set up Trafigura with other former Marc Rich employees.
In its 26-year history, the company has been implicated in several high-profile scandals, including involvement in smuggling oil out of Saddam Hussein’s Iraq.
In 2009, the Guardian fought a landmark legal battle to reveal Trafigura’s links to the dumping of toxic waste in the Ivory Coast, causing a public health crisis that affected more than 100,000 people. Effects included breathing difficulties, nausea, stinging eyes and burning skin. Trafigura eventually paid more than £32m to claimants affected by the waste.