Dear FCPA Blog,
You may have seen this announcement in an SEC filing on June 10 by the Brazilian-owned electric company Centrais Eletricas Brasileiras SA –Electrobras:
. . . . we hereby inform our shareholders and the market in general that was hired the international law firm Hogan Lovells, specializing in corporate investigation, to evaluate whether there are irregularities that violate the law U.S. Foreign Corrupt Practices Act 1977, the Brazilian anti-corruption Law No. 12,846/2013 and the Code of Ethics of Eletrobras Companies, on projects in which Eletrobras Companies take part in a corporate form or as minority shareholder, through special purpose entities.
The projects will be selected by the contracted law firm, according to diagnosis to be carried out based on risk matrix developed according to the relevance of the projects in the Consolidated Financial Statements of Eletrobras and its eventual business relationship with construction companies mentioned in the investigation context of the operation called “Lava Jato.”
Furthermore, we inform you that the work of the internal committees of inquiry, set up under the Compliance Program, called Commission of Correction, created on March 16, as Notes number 4 of the Company’s Financial Statements for the year ended 2014 are in full work.
The Company will keep the market informed about the progress the work herein contracted as well as the Commission of Correction.
Electrobras is a very large company that may have to open its books to the SEC, just like Petrobras.
And because Electrobras is 52% owned by the Brazilian government, any bribes its employees received from subcontractors may be deemed violations of the FCPA if U.S. jurisdiction is achieved.
We nearly predicted this in an earlier post.
Electrobas is listed in the Foreign Companies Registered and Reporting with the SEC but wasn’t one of the companies specifically called out in the post.
I think Brazilian authorities and investigators will be busy for a while.