* Brazilian companies Odebrecht and Braskem enter deal
* Global settlement with U.S., Brazilian, Swiss authorities
* Penalty latest fallout from Brazil's "Operation Car Wash"
* Bribe money routed through a network of shell companies
(Recasts first paragraph, adds company comments, quotes from
By Mica Rosenberg and Nate Raymond
NEW YORK, Dec 21 Brazil-based construction
colossus Odebrecht SA and affiliated petrochemical
company Braskem SA agreed on Wednesday to pay at
least $3.5 billion, the largest penalty ever in a foreign
bribery case, to resolve international charges involving payoffs
to Brazil's state oil company and others.
Odebrecht and Braskem pleaded guilty in U.S. federal court
in Brooklyn to conspiring to violate a U.S. foreign bribery law
after an investigation involving political kickbacks at Brazil's
Petrobras unearthed the bribery scheme.
The huge penalty was negotiated as part of a broad
settlement with U.S., Brazilian and Swiss authorities.
Some of the hundreds of millions of dollars used in bribes
to secure lucrative business deals flowed through the American
banking system and some of the schemes were planned in the
United States, enabling U.S. authorities to claim jurisdiction
in the case.
Odebrecht is Latin America's biggest engineering firm.
Braskem, the region's biggest petrochemical producer, is jointly
owned by Odebrecht and Petrobras.
Their guilty pleas were the first in the United States
following a nearly three-year investigation in Brazil dubbed
"Operation Car Wash" into corruption at Petrobras, which has led
to dozens of arrests and political upheaval in Brazil.
The total fines and penalties to be paid out by the
companies exceeded a 2008 agreement in which German engineering
company Siemens paid $1.6 billion to U.S. and European
authorities for paying bribes to win government contracts.
Odebrecht and Braskem were charged with conspiring to
violate the U.S. Foreign Corrupt Practices Act, which is aimed
at deterring companies from bribing officials overseas.
"Odebrecht and Braskem used a hidden but fully functioning
Odebrecht business unit - a 'Department of Bribery,' so to speak
- that systematically paid hundreds of millions of dollars to
corrupt government officials in countries on three continents,"
U.S. Deputy Assistant Attorney General Suh said in a statement.
From 2001 to 2016, Odebrecht paid approximately $788 million
in bribes in association with 100 projects in 12 countries,
including Brazil, Argentina, Colombia, Mexico and Venezuela,
according to the U.S. charging papers.
The companies hid the bribes through carefully disguised
payments routed through a network of shell companies as well as
suitcases of cash left at preset locations, Suh said.
The U.S. Justice Department said the penalty to be paid by
the two companies amounted to at least $3.5 billion, including
$2.6 billion from Odebrecht and $957 million from Braskem.
Brazilian authorities gave a lower figure for the overall deal
but did not explain the discrepancy.
U.S. officials said most of the money would go to Brazilian
Both companies also agreed to continue to cooperate with
authorities, implement compliance improvements and become
subject to oversight by external monitors.
Odebrecht's former CEO Marcelo Odebrecht is already serving
a 19-year sentence after being found guilty on corruption
charges last year in Brazil, Latin America's biggest country. He
turned state's witness and is expected to be freed by the end of
'TURNING THE PAGE'
"The company is glad to be turning the page and focusing on
its future," William Burck of U.S. law firm Quinn Emanuel
Urquhart & Sullivan, which represented Odebrecht, said in a
Fernando Musa, Braskem CEO since May, said his company also
was pleased to be settling the matter.
"We are implementing more robust practices, policies and
processes across the organization," Musa said in a statement.
According to U.S. prosecutors, Odebrecht said it was able to
pay $2.6 billion although it agreed the appropriate criminal
fine would be $4.5 billion. The judge scheduled sentencing for
April, when the deal would become finalized.
Braskem also agreed to more than $632 million in criminal
penalties and fines as well as additional money to the U.S.
Securities and Exchange Commission and Swiss and Brazilian
authorities, the SEC said.
In the sprawling "Car Wash" investigation, named for a
Brasilia gas station where some of the money-laundering took
place, prosecutors in Brazil have said more than $2 billion in
bribes were paid over a decade, mainly to Petrobras executives,
from construction and engineering companies.
As part of the deal, Odebrecht agreed that 77 of its
executives and employees would cooperate with the investigation,
and they have already provided testimony expected to implicate
upward of 200 Brazilian politicians.
U.S. prosecutors want to use testimony from Odebrecht
employees to pursue more criminal cases that fall under their
jurisdiction, according to two sources with direct knowledge of
the Odebrecht deal.
Former Brazilian President Luiz Inacio Lula da Silva, who
Brazilian prosecutors say oversaw a scheme in which Odebrecht
paid 75 million reais ($22.18 million) in bribes to win eight
Petrobras contracts, is among those already charged in Brazil.
The scandal also contributed to the downfall of Brazil's
former president, Dilma Rousseff. She was ousted by Brazil's
Senate in August, ending an impeachment process that polarized
her country amid the massive corruption scandal and a brutal
Michel Temer, Rousseff's vice president, then took over, but
Temer himself has been cited in recently leaked testimony that
Odebrecht officials have given, reportedly accused of accepting
illegal campaign donations, allegations he has denied.
(Reporting by Nate Raymond and Mica Rosenberg; Additional
reporting by Tatiana Bautzer and Brad Brooks in Sao Paulo and
Joel Schectman in Washington; Editing by Will Dunham)