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Harry Cassin Publisher and Editor

Andy Spalding Senior Editor

Jessica Tillipman Senior Editor

Richard L. Cassin Editor at Large

Elizabeth K. Spahn Editor Emeritus 

Cody Worthington Contributing Editor

Julie DiMauro Contributing Editor

Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

Russell A. Stamets Contributing Editor

Richard Bistrong Contributing Editor 

Eric Carlson Contributing Editor

Bill Steinman Contributing Editor

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Friday
Dec122014

Thirty-six charged in Brazil Petrobras bribery probe

Prosecutors in Brazil charged 36 suspects with corruption for allegedly overbilling state-controlled oil and gas company Petroleo Brasileiro and using the money to bribe politicians.

Twenty-three executives from Brazil's biggest construction companies were among those charged. The companies included Camargo Corrêa SA, Engevix, Galvão Engenharia, Mendes Júnior, OAS, and UTC Engenharia SA.

Paulo Roberto Costa, the former director of Petrobras’ refining division, was charged, along with Alberto Youssef, an alleged black-market currency dealer accused of handling bribe payments. Costa is cooperating with prosecutors.

Proscutors said they'll try to recover nearly $400 million from the defendants. The money was allegedly skimmed from about $4 billion in Petrobras contracts and paid as bribes to members of the governing Workers Party to fund political campaign.

The charges filed include corruption, money laundering, and organized crime. Convictions could lead to prison sentences of up to 50 years.

In November, Brazil’s national accounting agency said Petrobras may have overpaid by as much as $1.2 billion in transactions that were under investigation for possible kickbacks, including the company’s purchase of an oil refinery in Pasadena, Texas in 2006.

Petrobras has been called the most indebted oil company in the world. Its long-term debt grew this year to $126.5 billion, from $90.6 billion a year earlier.

Before the 36 suspects can be put on trial, a federal judge must decide whether to accept all or some of the charges.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.