Latin America Enforcement Report – June 2015

Here are highlights from Latin America in connection with corruption, enforcement, and compliance through May 2015.

Argentina: The Minister of Planning, Julio de Vido, and the governor of the Chubut province, Mario das Neves, are under investigation by the United States Securities and Exchange Commission for involvement in a bribery scheme to award oil contracts. The provincial prosecutor started a probe of alleged payments by BP Plc’s Argentine venture Pan American Energy LLC to extend the concession of the country’s main oil field.

Brazil: As Operation Carwash goes on, the Ministério Público Federal (Federal Public Prosecutor Office) won four decisions in court allowing the seizure of almost BRL 1 billion (more than $300 millions) in assets from companies involved in the Big Oily.

Thirteen individuals, among them three former congressmen, have been charged with corruption, money laundering and embezzlement. Nestor Cerveró, Petrobras’s former director of international operations, was sentenced to five years in prison. 

As reported by the FCPA Blog, the late politician José Janene is believed to have faked his own death, leading some members of Brazil’s congress to ask for the exhumation of his corpse.

The Brazilian Senate has approved the creation of a commission to investigate a tax-dodging scheme uncovered during the Zealots operation. For 15 years, lobbying firms, consultants, and lawyers allegedly bribed members of the CARF (Administrative Council for Tax Appeals – an agency linked to the Finance Ministry) to help companies evade taxes.

Bolivia/Peru: A Bolivian court authorized the extradition to Peru of a former adviser to Peruvian President Ollanta Hullama. Martin Belaunde is charged with graft and unlawful association, and is suspect of belonging to a criminal network linked to public officials.

Chile: After the disclosure of several corruption scandals, the Chilean president, Michelle Bachelet, asked all her cabinet to resign. In January, a campaign finance scandal called Pentagate shook the country’s political scene. In February, her son resigned as head of a government charity after being accused of using political influence to secure bank loans to buy land that he sold for a big profit.

Guatemala: The central bank chief, Julio Suarez, and 14 others were arrested in a bribery probe involving medical services contracts awarded by the Guatemalan Social Security Institute.

Guatemala is seeing massive protests because of growing graft scandals. The ministers of the Environment and Natural Resources, Energy and Mines, and the Interior resigned after the disclosure of alleged irregularities in project contracts and permits. The vice president also stepped down over a separate corruption scandal, which implicated her former private secretary.

Mexico: President Enrique Pena Nieto signed into law sweeping anti-corruption legislation. It creates a central anti-corruption body and sets out sanctions for offending legal entities, including dissolution.

Panama: A commission formed by the National Assembly launched an investigation of a supreme court judge for abuse of minors and selling judicial decisions. Earlier this year, Alejando Moncada, the former chief justice of the court, was sentenced to five years in prison for document falsification and illicit enrichment.

Last month, former Panama president Ricardo Martinelli was stripped of immunity from prosecution for alleged corruption from 2009 to 2014. According to his successor, the country may have lost $100 million during his administration. The chief of Cobranzas del Istmo, a company that collects delinquent taxes for the government, confirmed the delivery of cash every three months to offices of Martinelli’s supermarket chain.

Venezuela: Attorney General Luisa Ortega Díaz reported that 277 people were convicted of foreign currency irregulalrities committed by the former Foreign Exchange Administration Council (CADIVI), now the National Center for Foreign Trade (CENCOEX). Last month, the National Assembly said 7,000 companies are being investigated for the irregular use of foreign currency.

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Lucas Zanoni is an undergraduate student of law at University of São Paulo and a legal intern in the compliance and anti-bribery team of Chediak Advogados. The firm offers legal assistance for both Brazilian and international clients across different industries and business sectors.