January, 11 2019 (Reuters)
SAO PAULO (Reuters) – Commodities trader Trafigura [TRAFGF.UL] has refused a judge’s order to hand over the email archives of two former executives in Brazil who are facing corruption charges over accusations they bribed officials at state-run oil firm Petroleo Brasileiro.
Brazilian federal prosecutors on Friday demanded in a court filing that the Switzerland-based firm preserve the emails. They may contain evidence that other top executives at Trafigura were aware of millions of dollars in bribes paid to Petrobras (PETR4.SA) executives for sweetheart oil contracts, the prosecutors say.
Trafigura declined to comment, pointing to a prior statement about the case in which it said it takes the accusations seriously.
The case is part of Brazil’s “Car Wash” probe that has revealed stunning political graft at Petrobras, brought down presidents and politicians, and sent scores of businessmen to jail.
Now, prosecutors are aiming for their biggest targets yet – multinational firms who have done business with Petrobras in the past two decades. Brazilian prosecutors allege corruption took place on U.S. soil and money was laundered through American and European banks, which could greatly widen the probe.
Aside from Trafigura, other powerhouse commodity traders like Vitol SA [VITOLV.UL], Glencore Plc (GLEN.L) and Mercuria Energy Group are also under investigation.
Vitol has said it is cooperating with Brazilian authorities. A Glencore spokesman said the firm takes ethics and compliance seriously, and that it is cooperating with the investigation. Mercuria has denied wrongdoing.
Petrobras has suspended oil and fuel trading with Vitol, Glencore and Trafigura.
Trafigura’s Brazilian attorneys filed documents before the federal court saying the firm was likely prohibited by the European Union’s General Data Protection Regulation (GDPR) from handing over the emails of former executives Mariano Marcondes Ferraz and Marcio Pinto Magalhaes. Both men have been charged for bribing Petrobras officials, which they have denied.
According to a court document, Trafigura Limited sent a Dec. 31 letter sent to its Brazilian subsidiary Trafigura do Brasil, in which it wrote that it had been advised by outside counsel that it would have to carry out an extensive examination of its responsibilities under the GDPR in several jurisdictions and also examine what individual country laws state about data privacy.
Trafigura questioned the Brazilian judge’s demand that the emails be handed over, writing that “it remains unclear whether the request in respect of Mariano Marcondes Ferraz is indeed within the scope of the decision made by the judicial authority.”
It argued in its court filing that it could potentially face a fine of 4 percent of its global revenues – well over $5 billion – if it is found in breach of the EU data laws.
Brazilian federal prosecutors declined to comment beyond the Friday court filing demanding the email archives not be destroyed.
Prosecutors have accused the European multinationals and some smaller players of collectively paying at least $31 million in bribes over a six-year period to employees at Petrobras, to sell them oil at favorable prices.
They have repeatedly said the firms’ top brass had “total and unequivocal” knowledge that they were fleecing Petrobras and that the illicit activity may still be going on.
More than 600 pages of legal documents reviewed by Reuters portray what prosecutors describe as a bustling criminal enterprise fueled by competition and greed.
Authorities say the trading companies often used freelance middlemen to cover their tracks, allowing them to negotiate deals and pay off Petrobras collaborators using bank accounts in several countries.
Earlier this week, the Brazilian court overseeing the investigations against the commodity traders disclosed that one such alleged middleman had been arrested in Miami on the request of the Brazilian judge.