Questionable transactions, unquestionable rules: the Odebrecht/Braskem case and the Foreign Corrupt Practices Act

This article offers a critical analysis of the Odebrecht/Braskem case under the Foreign Corrupt Practices Act (FCPA). Two Brazilian companies, Odebrecht S.A. and its subsidiary Braskem S.A., have been caught in a massive bribery machine that concerned Brazil as well as many other countries, including Switzerland and the United States. Not only did these companies create a true consortium through which they controlled Brazil’s public procurement system in a way to adjudicate and make profit out of multibillion projects in South America and abroad, but they also exploited the U.S. financial market to transfer money to corrupt public officers. The two companies cut a deal with the U.S. prosecutors under the FCPA, which the article comments in two parts. First, it recounts the case’s factual background, casting a light on the companies’ business models and corrupt conduct. The second part delineates the legal arsenal underlying the deal signed with the U.S. prosecutors, which reflects a consolidated practice of the U.S. government to prosecute non-American multinational enterprises pursuant to the FCPA. Such practice is based on the broad discretion enjoyed by U.S. federal prosecutors in exercising their prosecutorial power, which includes the possibility to halt or defer the prosecution upon the condition that the defendant pays a penalty and submits to certain compliance and self-reporting obligations. Through the FCPA, they can target foreign corporations whose bribery scheme involved, even indirectly, the U.S. financial market. Finally, the Odebrecht/Braskem case represents the first example of a deal that was indirectly participated by foreign governments, whose sanctions were considered part of the deal itself.