“Car Wash” investigation: Brazil’s Petrobras to pay $853 million U.S. fine

SAO PAULO (Reuters) – Petróleo Brasileiro SA (PETR4.SA) will pay an $853.2 million fine to settle U.S. criminal charges the Brazilian state-run oil company bribed politicians and then sought to conceal the payments, the Justice Department said on Thursday.

The settlement with U.S. prosecutors is an important milestone for Petrobras, as the company is known, as it tries to put behind it numerous corruption allegations stemming from the landmark “Car Wash” investigation.

“Executives at the highest levels of Petrobras — including members of its executive board and board of directors —facilitated the payment of hundreds of millions of dollars in bribes to Brazilian politicians and political parties and then cooked the books to conceal the bribe payments from investors and regulators,” Assistant Attorney General Benczkowski said in a statement.

Under the agreement, which settles violations of the U.S. Foreign Corrupt Practices Act, Petrobras will deposit $682.6 million, or 80 percent of the penalties, in a special fund in Brazil, with the remainder of the fine being split between the two U.S. agencies.

Brazilian federal prosecutors will determine how Petrobras should allocate money in the fund into social and educational programs in an agreement yet to be settled.

Petrobras said in a statement that the deal “puts an end to the uncertainties, risks, burdens and costs of potential prosecution and protracted litigation in the United States.”

The oil company will take a third-quarter 3.6 billion real charge – the local currency equivalent of the penalty.