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  HOME | Brazil (Click here for more)

Brazil Holding Company Agrees to Massive Leniency Deal

RIO DE JANEIRO – The holding company behind Brazilian meatpacking giant JBS has agreed to pay a fine of at least 10.3 billion reais ($3.2 billion) as part of a leniency deal with prosecutors, local media reported on Wednesday.

The fine, equivalent to 5.62 percent of J&F Investimentos’ pre-tax revenue in 2016, will be paid over the next 25 years and be adjusted for inflation, meaning it could eventually total as much as 20 billion reais (around $6.1 billion at the current exchange rate), Globonews television reported.

J&F belongs to brothers Joesley and Wesley Batista, who disclosed a large corruption scheme to prosecutors as part of a plea-bargain arrangement, and their father.

The fine represents compensation for a series of irregularities investigated by the Federal Police, including a scheme by JBS to bribe inspectors to allow the sale of expired meat both domestically and abroad.

The Batista brothers triggered a political crisis in Brazil by turning over documents that appear to show that President Michel Temer and his two immediate predecessors, Dilma Rousseff and Luiz Inacio Lula da Silva, received tens of millions of dollars in bribes.

JBS, which has dramatically expanded its operations over the past decade thanks to a series of acquisitions in the United States, told prosecutors that that growth was possible thanks to the bribes and the sweet deals with state development bank BNDES they facilitated.

They also handed over a secretly taped recording in which Temer seems to tell Joesley Batista to continue to pay hush money to a former top lawmaker, Eduardo Cunha, who was convicted of graft earlier this year and sentenced to more than 15 years in prison.

Cunha, a former speaker of the lower house who is one of the most prominent political figures to be ensnared in a $2 billion bribes-for-inflated contracts scandal centered on state oil company Petrobras, spearheaded the effort that led to Rousseff’s impeachment and eventual removal from office for violating budget laws.

Temer, who had been Rousseff’s vice president, initially took office as a stand-in for his boss and then permanently replaced her after she was convicted in a Senate impeachment trial.

All told, JBS executives say the company paid bribes to 1,829 politicians from 28 parties over the past several years.

Those revelations, which Temer, Rousseff and Lula all have vehemently denied, have triggered calls for the current head of state’s resignation from both the opposition and members of his own ruling coalition

Despite that pressure, Temer has said repeatedly that he will not step down and will prove his innocence before the Supreme Court, which launched a formal investigation into Temer nearly two weeks ago.

The leniency deal with J&F will likely eclipse the settlement that Brazilian engineering giant Odebrecht reached with US, Brazilian and Swiss authorities late last year.

Odebrecht, one of the companies at the heart of the Petrobras scandal, and its petrochemical unit Braskem pleaded guilty in December to paying hundreds of millions of dollars in bribes to government officials around the world to win business and agreed to pay a combined $3.5 billion in penalties to resolve the charges.

 

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