Brazilian authorities investigate JP Morgan for alleged bribery linked to Petrobras

JP Morgan, one of the world's largest banks, is facing an investigation into an alleged bribery case in Brazil. According to Reuters, the New York-based financial firm is suspected of laundering money and lowering oil prices through bribery. Brazil's state-owned oil company Petrobras is also involved in the scheme.

Brazilian federal police are working to "determine whether JP Morgan secured shipments of Petrobras fuel at artificially low prices by routing bribe payments to Petrobras trading desk employees through a network of intermediaries, according to people and documents related to the investigation," Reuters reports.

State authorities have at their disposal emails, WhatsApp messages, witness testimonies and bank records. The court documents also include the testimony of Rodrigo Berkowitz, a former Petrobras fuel trader. 

The current investigation dates back to 2011, when JP Morgan purchased 300,000 barrels of fuel from Petrobas, as journalist Gram Slattery explains. Slattery also claims that this process is part of a wider investigation into irregularities in the commodities sector. 

This is not the first time Petrobas has been in the spotlight of controversy. In 2014, Lava Jatos, the largest corruption scheme in Brazil's history, was uncovered. The country's authorities indicated "criminal practices" committed by Petrobras' Marketing and Commercialisation Executive Directorate. However, the oil company has sought to disassociate itself from this new case, stating that it has "zero tolerance for fraud and corruption". They have also assured that they have helped the Brazilian authorities in several corruption cases.
 

JP Morgan, for its part, was involved in another similar scandal in 2016. The company had to pay a fine of 264 million dollars for a corruption case in China. 

Corruption by large international companies has spread to other Latin American countries. The Swiss company Vitol, the world's leading oil trader, admitted to bribing officials in Mexico, Brazil and Ecuador between 2015 and 2020. As a result of the case, Mexican state oil company Pemex has cancelled several contracts with Vitol. Octavio Romero, the oil company's chief executive, said it would seek to get rid of conditions it considered "unfavourable". Pemex has also suspended its business with Trafigura, the world's second largest oil trader.

Latin America Coordinator: José Antonio Sierra