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May 25, 2022

Glencore Plc (GLEN.L) said on Tuesday it anticipates paying up to $1.5 billion to settle accusations of bribery and market manipulation, as authorities in the United States, Britain and Brazil announced that three of the company's subsidiaries were pleading guilty to crimes.

The miner and commodity trading giant agreed to pay more than $1 billion in the United States and Brazil, with Glencore representatives also appearing in courts in the United States and Britain on Tuesday.

U.S. Attorney General Merrick Garland said a $1.1 billion accord with the U.S. will resolve both a decade-long scheme to bribe foreign officials across seven countries and separate criminal and civil charges alleging one of the company's trading arms manipulated fuel oil prices at two of the largest U.S. shipping ports.

"This represents the Justice Department's largest criminal enforcement action to date for a commodity price manipulation conspiracy in oil markets," Garland said at a press conference.

"We will continue to investigate, disrupt and hold accountable corporations that break our laws."
The company said it expects a final global settlement, including a future fine in Britain, not to exceed the $1.5 billion it set aside in its reserves in February to resolve the probes relating to operations in the Democratic Republic of Congo, Nigeria and Venezuela.

"Glencore has resolved the previously disclosed investigations by authorities in the United States, the United Kingdom and Brazil into past activities in certain Group businesses related to bribery," it said in a statement.

Any final resolution would wrap up a multi-year U.S. and British investigation that has dogged the Swiss-based multinational, which still faces corruption and bribery investigations by other countries including Swiss and Dutch authorities.

In Brazil on Tuesday, prosecutors said Glencore will pay $29.6 million directly to state-run oil company Petrobras in compensation for defrauding the company and roughly $10 million to authorities in civil penalties. 

Operation Azoth - Glencore to plead guilty
The UK Serious Fraud Office (SFO), which opened a corruption investigation in 2019 code-named Operation Azoth, said on Tuesday it had exposed "profit-driven bribery and corruption" across oil operations in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria, and South Sudan.

Glencore Energy (UK) Ltd, which said Tuesday it would plead guilty to all the charges at a hearing at London's Westminster Magistrates' Court, will be sentenced on June 21.

The SFO alleged that Glencore agents and employees paid bribes worth over $25 million for preferential access to oil, with approval by the company.Damian Williams, the top federal prosecutor in Manhattan, called the bribery scheme "staggering."

"Glencore paid bribes to secure oil contracts. Glencore paid bribes to avoid government audits. Glencore paid bribes to judges to make lawsuits disappear," he said.
As part of the resolution with the United States, Glencore is also required to hire two separate independent compliance monitors.

In March 2021, former Glencore oil trader Emilio Jose Heredia Collado pleaded guilty in San Francisco, California, to manipulating a key oil price benchmark, while former Glencore trader Anthony Stimler pleaded guilty in New York in July 2021 over his role in a scheme to bribe Nigerian officials.

However, none of the company's top executives have faced charges to date. U.S. Justice Department officials told reporters on Tuesday their investigations remain ongoing.

Spotlight on Corruption, a public interest group, welcomed the charges on Tuesday, but said it was "essential that those responsible for the wrongdoing, including senior executives and the parent company, are held to account."