Glencore’s Bribery Schemes (Part III of V)
The broad and pervasive scope of Glencore’s bribery conduct is obvious. The scope of its misconduct reflects Glencore’s fatal culture and commitment to profits at any and all cost. Glencore’s board and senior executive team forgot the basic equation — ethical companies are more profitable in the long run. Instead, Glencore embraced immediate gratification, circumventing controls and adhering to a culture of lawlessness.
Glencore’s bribery conduct stretched across seven countries and occurred in a variety of circumstances. Glencore’s pervasive bribery scheme occurred over more than a ten year period, 2007 to 2018, and involved over $100 million in payments to third-party intermediaries intending that a significant portion of these payments were used to pay bribes to government officials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil, Venezuela and the Democratic Republic of the Congo (DRC).
In July 2021, Anthony Stimler, a UK based Glencore trader assigned to the West Africa desk, plead guilty to one count of FCPA conspiracy and one count of money laundering. Stimler cooperated with the investigation.
West Africa Bribery
Glencore paid approximately $79.6 million to intermediary companies to secure improper advantages from state-owned and controlled entities in the West African countries of Nigeria, Cameroon, Ivory Coast, and Equatorial Guinea. Glencore disguised the illegal payments by using sham consulting agreements, paying inflated invoices and using intermediary companies to make bribery payments to government officials. Glencore often relied on so-called “commissions” for oil cargo transactions as a means to funnel bribery payments to two third-party intermediaries, which in turn, paid various West African government officials.
Most of the bribery payments were approved by two senior executives at Glencore’s UK subsidiary. As a result of the bribery payments, Glencore earned profits of approximately $124 million.
In Nigeria, Glencore entered into multiple agreements to purchase crude oil and refined products from Nigeria’s state-owned oil company. Glencore used two intermediaries — West Africa Intermediary Company and Nigeria Intermediary Company — to pursue business, while knowing that the intermediaries would make bribe payments to Nigerian officials to obtain such payments. In Nigeria alone, Glencore paid more than $52 million to the intermediaries to fund, in part, the bribery scheme.
When communicating about bribery payments, Glencore’s executives and traders and West Africa Intermediary Company officials and employees referred to such payments as “journals,” “newspapers,” “filings,” or “pages.”
Nigeria Intermediary Company received payments from Glencore to purchase refined petroleum products for Glencore and to act as a front for Glencore to purchase oil cargoes from the state-owned oil company and immediately reselling the cargo to a Glencore subsidiary. Glencore paid various fees to the Nigeria Intermediary Company knowing that a portion of the payment was to be funneled to Nigerian government officials. On some occasions, bribery payments were referenced as “advance payments” for specific crude oil cargoes.
Between 2006 and 2014, Glencore paid approximately $27 million to West Africa Intermediary Company to fund bribes to government officials in Cameroon, Ivory Coast and Equatorial Guinea. Based on these payments, Glencore earned approximately $92 million in profits. Some of these bribery payments were made in cash and were dispensed from Glencore’s offices in Switzerland.
In the DRC, Glencore was subject to several DRC mining audits related to taxes and mandatory employer payments. Glencore was fined and penalized by the DRC government on a regular basis.
From 2010 to 2013, Glencore retained an agent in the DRC to pay a tax consultant to bribe DRC officials. The tax consultant issued fraudulent invoices to disguise the bribery payments. In total, Glencore paid approximately $27 million in bribes through the tax consultant.
On one occasion, Glencore learned that it was to be fined $700,000 for failing to make the requisite employer contributions. To reduce the fine, Glencore and the tax consultant arranged for a $450,000 bribe payment.
In January 2010, a medical service company sued Glencore for $16 million. Glencore paid a $500,000 bribe to have the lawsuit dismissed. Glencore paid the presiding judge and the plaintiff’s attorney to cooperate in the resolution of the case. After the DRC agent made the payment, the presiding judge ruled in Glencore’s favor to resolve the case.
Brazil and Venezuela Bribery
In Brazil, Glencore paid approximately $147,202 in 2011 to be used, in part, for corrupt payments made by a third-party consultant to Brazilian officials to secure an oil cargo from Petrobras. The bribery payment was included in a “built-in delta” to the proposed purchase price. Glencore traders communicated with the Brazilian consultant by using his personal email address, and they disguised the bribery payment as a .50 add-on to the per barrel charge.
In Venezuela, between 2011 and 2014, Glencore paid an intermediary over $1.2 million to make corrupt payments to a Venezuelan official related to purchases and sales of oil cargoes to PDVSA and specifically for late-payment interest charges. Glencore arranged to pay bribes to PDVSA officials to secure priority in interest payments of debts owed by PDVSA to Glencore.
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