According to the DOJ, Petrobras senior executives and managers participated in a far-reaching bribery scheme and assisted major Petrobras contractors in securing contracts with the company by rigging bids in their favor at the expense of more qualified contractors. Additionally, the executives inflated contract costs (often as fabricated consultant charges) to allow more money to flow to the contractors. In reward for their cooperation, the executives and managers received kickbacks from the contractors that ranged from one to three percent of the contract’s value. The executives kept a portion for themselves, and shared a portion with Brazilian politicians and political parties as bribes as a way to ensure the company and its projects continued to be viewed favorably.
The DOJ also alleged that Petrobras failed to keep accurate books and records. As the bribery scheme continued, Petrobras began trading ADSs on the New York Stock Exchange in 2010. The company was required to file annual reports and financial statements with the SEC. The DOJ alleged that the executives were aware the filings made omitted information about the bribery scheme and the executives still falsely certified that the filings were accurate.
The DOJ further alleged that Petrobras failed to implement internal controls over the company’s financial, accounting, and contracting processes. Specifically, Petrobras’ policies were inadequate to guard against manipulation of the bidding process and improper political influence.