February 4, 2020 / 5:59 PM / 4 months ago

Exclusive: First Petrobras employee flips in Brazil commodity traders probe

RIO DE JANEIRO/HOUSTON (Reuters) - A former trader at oil firm Petrobras has signed a plea bargain agreement with Brazilian prosecutors investigating bribery allegations, defense lawyers and prosecutors said, a potential breakthrough in a case involving some of the world’s top commodity trading houses.

FILE PHOTO: People walk in front of Brazil's state-run Petrobras oil company headquarters in Rio de Janeiro, Brazil, October 16, 2019. REUTERS/Sergio Moraes/File Photo

Rodrigo Garcia Berkowitz, who was a trader at Petrobras’ Houston office until he was charged with accepting bribes in late 2018, reached the deal in principle in December, the lawyers said. A judge then approved it in late January, they added.

He is the first former Petrobras employee known to have formally flipped in the Brazilian bribery and corruption probe.

Prosecutors alleged in December 2018 that Vitol, Glencore Plc and Trafigura, among other trading firms, funneled tens of millions of dollars of bribes from 2011 to at least 2014 to employees of state-run Petroleo Brasileiro SA, as Petrobras is formally known. In return, those firms would purchase Petrobras fuel at discounts or sell to the firm at a premium.

Two of Berkowitz’s defense lawyers spoke to Reuters on Monday. Federal prosecutors in Brazil also confirmed the deal to Reuters, but declined to comment further, noting that the contents of the accord are still confidential.

In court documents, Brazilian prosecutors have portrayed Berkowitz, who went by the code name “Batman” in messages with alleged co-conspirators, as a central player in the kickback scheme and a recipient of Vitol bribes. He previously pleaded guilty to conspiracy to commit money laundering in the United States, where the Federal Bureau of Investigation has opened a separate probe of the matter, Reuters reported last February.

But Brazilian prosecutors have sought to interrogate Berkowitz for their own separate case, saying in November court documents they consider his testimony “of extreme importance” for cracking the case, given his first-hand role in soliciting, receiving and laundering bribes.

Vitol, Trafigura and Glencore, which together control about 10% of the world’s oil consumption, have said they are cooperating with authorities.

Trafigura, which has denied that its current management knew of improper payments, referred Reuters to a November statement that said it “is continuing to keep these matters under review and is taking the allegations previously made seriously.”

Vitol said it “has a zero tolerance policy in respect of bribery and corruption.”

Glencore declined to comment on Tuesday. Petrobras did not respond to a request for comment.

The Berkowitz deal comes as the Brazil investigation heats up, with the pace of in-court interrogations quickly accelerating in recent months, according to documents reviewed by Reuters.

Brazilian prosecutors met with Berkowitz over two days in Houston in early December as part of the discussions leading to the deal, and U.S. prosecutors were present for those meetings, said Kent Schaffer, Berkowitz’s U.S. attorney. That version of events was corroborated by a Rio de Janeiro-based lawyer also representing Berkowitz, Jorge Luis Camera.

Schaffer added he is pushing for a broader agreement with Brazilian prosecutors that would also cover Berkowitz’s family members, including his father, Paulo Cesar, who was charged in 2018 with laundering the bribe payments.

Reporting by Gram Slattery in Rio de Janeiro and Gary McWilliams in Houston; Additional reporting by Julia Payne in London; Editing by Matthew Lewis

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