Vitol Inc. agree $135 million penalty with DoJ; investigation reveals massive bribes used to win contracts and gain edge in fair market - AML Intelligence
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Vitol Inc. agree $135 million penalty with DoJ; investigation reveals massive bribes used to win contracts and gain edge in fair market

By Dan Byrne for AMLi

A GLOBAL energy and commodities company will pay a $135 million settlement in the United States for widespread bribery that brought it extensive market advantages.  

Vitol Inc. – the American affiliate of the worldwide Vitol group – has agreed to the settlement after a long-running investigation into violations of the US Foreign Corrupt Practices Act (FCPA)

The investigation was led by the US Department of Justice (DoJ).

“Over a period of 15 years, Vitol paid millions of dollars in bribes to numerous public officials – in three separate countries – to obtain improper competitive advantages that resulted in significant illicit profits for the company,” said Acting Assistant Attorney General Brian C. Rabbitt of DoJ Criminal Division.

“Today’s coordinated resolution… underscores the department’s resolve to hold companies accountable for their crime while, at the same time, avoiding unnecessary duplicative penalties.”

Of the total penalty of $135 million, $45 million will be used to offset a related penalty settlement regarding an investigation in Brazil.

Court documents and Vitol’s own admissions reveal that the company paid over $8 million in bribes to at least four individuals in Petrobras – Brazil’s state-owned oil company.

The bribes were in exchange for important information on pricing and competitor activity, enabling Vitol to have what was deemed an unfair advantage, the DoJ said in a statement.

“Vitol concealed the scheme through the use of intermediaries and a fictitious company that facilitates the payments to offshore accounts and, ultimately, to the Petrobras officials,” the DoJ statement read.

Vitol has also admitted paying bribes to at least five other Petrobras personnel over a three-year period from 2011 to 2014.

The confidential payment information handed over in exchange for these bribes enabled Vitol to win important fuel oil contracts with the company. Staged official negotiations would be held as part of this arrangement, with back-channel discussions having already taken place to ensure the desired outcome.

Similar instances of bribery also took place in Ecuador and Mexico to secure business deals around the purchase and sale of oil – with over $2 million in bribes paid out.

Shell companies, fake invoices and consulting services, alias email accounts and sham agreements were all used by Vitol to maintain its operations in these two countries over a 5-year period.

Speaking at the announcement of the sweeping penalties against the global oil conglomerate, Assistant Director of the FBI’s Los Angeles Office Kristi K. Johnson said that the resolution “demonstrates the FBI’s commitment to investigate foreign corruption.”

“We’ll continue to work with our partners to root out corruption, whether it occurs domestically or abroad, to ensure trust on the international playing field,” he said.

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