WMPIDK:AESUIN F. #2016R00709 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK UNITED STATES OF AMERICA, INFORMATION + against— Ce. No, 16.644 (RID) (7-18, USCC, §§371 and 3551 et sea.) BRASKEMS.A., ‘THE UNITED STATES CHARGES: Acall times relevant to this Information, unless otherwise stated: 1. ‘The Foreign Conrupt Practices Act 1. The Foreign Coup Practices Act of 1977 s amends, Title 15, United States Code, Sections 7844-1, ese FCPA"), was enacted by Congress for the purpose of, among other things, making it unlawful to act comuptly in furtherance of an offer, promi authorization, or payment of money or anything of value, directly or indirectly, 0a freien official forthe purpose of obtaining or retaining business fr, or directing business to, any person. U1, Relevant Etis and Individuals 2. The defendant Braskem, S.A. (BRASKEMT”) was a soctedade anorima (corporation) organized under th laws of Bri, and was he largest petocherial company in the Americas, producing a portlio of petochemicl and thermoplastic products. BRASKEM had its headquarters in Sto Paulo, Brazil. American depositary shares of BRASKEM traded onthe New York Stock Exchange, and BRASKEM was require to file annual reports withthe United Sues Securities and Exchange Commission (*SEC") under Section 15(€) ofthe [Exchange Act, Title 15, United Sates Code, Section 780(4). BRASKEM was an “issuer as that term is used inthe FCPA, Title 15, United States , Sections 78d and 78m). 3. Odebrecht, 8.A. (“Odebrecht”) was a Brazitian holding company that, ‘through various operating entities, conducted business in multiple industries, including engineering, construction, inftastructure, energy, chemicals, jes and rel estate, Odebrecht ‘had its headquarters in Salvador, state of Bahia, Brazil, and operated in 27 other counties, including the United States 4. Odebrecht inditectly owned 38.1% ofthe total shares of BRASKEM, and controlled BRASKEM through its ownership of 50.11% ofthe voting shares. Petrleo Brasileiro S.A. - Petrobras (“Petrobras”), Brazil's state-controlled oil company, owned 36.1% of the shares of BRASKEM, 5, BraskemIncoeporated Limited (Braskem Incorporated”) was wholly: ‘owned subsidiary of BRASKEM. It was incorporated with limited ibility under the laws of the Cayman Islands and headquartered in Grand Cayman, Braskem Incorporated was an “agen ofan issuer, BRASKEM, within the meaning of the FCPA, Title 1S, United States Code, Section 78dd-(a. 6. “Braskem Employee 1," a Bravlian citizen whose identity is known to the United States and BRASKEM, was doctor of BRASKEM and an offier and senior exocutive ‘of Odebrecht. Braskem Employee I was a “director” and “agent” of an issuer, BRASKEM, ‘within the meaning ofthe FCPA, Tile 15, United States Code, Section 784¢-1().7. “Braskem Employee 2,” Brazilian citizen whose identity is known to the United States and BRAS EM, was a director of BRASKEM and an executive of Odebrecht, Braskem Employee 2 was a “director” and “agent” of an issuer, BRASKEM, within the meaning of the FCPA, Title 15, United States Code, Section 78dd-1(). 8. “Braskem Employee 3," a Brain citizen whose identity is known o the United States and BRASKEM, was an executive of BRASKEM and an executive of Odebrecht. Braskem Employee 3 was an “employee” and “agent” of an ssuec, BRASKEM, within the meaning ofthe FCPA, Tite 15, United States Code, Section 78d-1(2). 9. “Braskem Employee 4,” a Brain citizen whose identity is known to the United States and BRASKEM, was an executive of BRASKEM. Braskem Employee 4 was an “employee” and “agent” ofan issuer, BRASKEM, within the meaning ofthe FCPA, Title 15, United States Code, Section 784d), 10, “Braskem Employee 5," a Brazilian citizen whose identity is known tothe United States and BRASKEM, was an executive of BRASKEM, Braskem Emplayee $ was an “employee” and “agent” of an issuer, BRASKEM, within the meaning ofthe FCPA, Title 15, U x States Code, Section T84L-1()- 11, “Braskem Employee 6," Brazilian citizen whose identity is known tothe ‘United States and BRASKEM, wasan executive of BRASKEM and Braskem Ameria, Ine, & ‘wholly-owned US. subsidiary of BRASKEM, Braskem Employee 6 was an “employee” and “agent ofan issuer, BRASKEM, within the meaning ofthe FCPA, Title 15, United States Code, Section 78d).12, “Braskem Employee 7," a Brazilian citizen whose identity is known tothe United States and BRASKEM, was an executive of BRASKEM. Braskem Employee 7 was an “emplayee” and “agent” of an issuer, BRASKEM, within the meaning of the FCPA, Title 15, United States Code, Section 784d-1(). 13, “Braskem Agent 1," Brazilian citizen whose identity’ is knowa to the United States and BRASKEM, was an executive of Odebrecht and an altemate director at BRASKEM, “Braskem Agent 1” was an “agent” ofan issuer, BRASKEM, within the meaning of the FCPA, Title 15, United States Code, Section T8dd-I(a). 14. “Braskem Agent 2," a Brazilian citizen whose identity is known to the United States and BRASKEM, was a senior executive in Odebrecht’s Division of Structured (Operations (described in more detail below), in or about and between 2006 and 2015, and reported dioelly to Braskem Employee 1. Braskem Agent 2 operated the Division of Struetured ‘Operations to account for and disburse payments that were not included inthe publicly-declared Sinan Is of Odebrecht and its subsidiaries and afiiated companies, including corrupt payments ‘made to, or forthe benefit of, foreign officials and foreign politcal partes in order obtain and reiain business for Odebrecht and several ofits subsidiaries, including BRASKEM. In this role Braskem Agent 2 was responsible for executing requests from BRASKEM officers, employees and/or agents whereby Braskem Agent 2 made corrupt payments to foreign officials for the benefitof BRASKEM. As such, Braskem Agent 2 was an “agent” of an issuer, BRASKEM, ‘within the meaning ofthe FCPA, Title 15, United States Code, Section 784d-().15, Petrobras was « Brian tat-conrlled oll company, and a minority sharcholdec in BRASKEM. Petrbres was headquartered in Rio de Jenciro, Brazil and operated to refine, produce and dstrbute ol, il products, es, biofuels and energy. The Brailian government diecly owned approximately 50.3% of Petrobras’ common shares with voting Fights, while an additional 10% ofthe corp ns shares were contolled by the Brazilian Development Bank and Bra sSoversign Wealth Fund, Petrobras was an “agency” and “instrumentality” ofa foreign government, a those terms are used inthe FCPA, Tite 15, United States Code, Section 784d-1(9(1) 16, “Brailian Oficial,” an individual whose identity is known to the United States and BRASKEM, was a level offical in the exceutve branch of goverment in Bra ravilion Official 1 asa “Trvign oficial” within the meaning ofthe FCPA, Til 18, United States Code, Seton 84-1(0(1- 17, “Beilin Official 2," an naval whose identity is known to the United States and BRASKEM, was a high-level oficial inthe executive branch of government in Brazil Brwzilian Official 2 was a "foreign official within the meaning ofthe FCPA, Tile 15, United States Code, Section 784d-1(0(). 18, “Brazilian Official 3," an individual whose identity is known tothe United States and BRASKEM, served a a minister in the Brazilian government and an advisor toa high-level official inthe executive branch ofthe government in Brazil, as well asan elected official in the legislative branch of government in Brazil In these capacities, Brazilian Official 3 was a “foreign offical" within the meaning of the PCPA, Title 15, United States Code, Section 78d8-1(2K1).19. “Brazilian Official 4,” an individual whose identity is known to the United States and BRASKEM, served a8 a intern the Brailian government. Brazilian Oficial ‘vas “frcign oficial” within the meaning ofthe FCPA, Tile 15, United Sttes Code, Section TBI. 20, “Brazilian Offical 5," an individual whose identity is known tothe United States and BRASKEM, was an executive of Petrobras. Brazilian Offical $ was a “foreign offic within the meaning ofthe FCPA, Title 15, United States Code, Section 7846-1(PK1). 21, “Brazilian Official 6," an individual whose identity is known tothe United States and BRASKEM, was a high-level official inthe legislative branch of government in Brazil, Brazilian Official 6 was a “foreign official” within the meaning of the FCPA, Tile 15, United States Code, Section 7844+1(0\1). 22, “Brazilian Oficial 7” an individual whose identity is known to the United ‘States and BRASKEM, was high-level official inthe legislative branch of government in Brazil, Brazilian Oficial 7 was a “foreign official” within the meaning ofthe FPA, Title 15, United States Code, Section 7844-1(1(1). 23. “Brazilian Official 8" an individual whose identity i known tothe United States and BRASKEM, was a high-level official inthe legislative branch of government in Braz, Brwilian OM: 318 was a “foreign offvil” within the meaning ofthe FCPA, Tite 15, ‘United States Code, Section 7844-1(0(1). 24, “Bravlian Official 9,” an individual whose identity is known to the United States and BRAS} EM, was a high-level state official, Brazilian Official 9 was a “foreign official” within the meaning ofthe FCPA, Title 15, United States Code, Seetion 78d-1(9(1) 6TM Overview of the Bribery Scheme 25, nor about and between 2002 and 2014, BRASKEM knowingly and ‘wilflly conspired and agreed with thers to corruptly provide millions of dolar in payments 1 and forthe benefit of, foreign officals, foreign political partes, foreign politcal party ‘officials and foreign politcal candidates to secure an improper advantage and to influence those foreign offic Is, foreign polital partes foreign politcal party officals and foreign pola! ‘candidates in order to obtain and retain business in Beil 26, Specifically, during this period, BRASKEM authorized a division of (Odebrecht known asthe Division of Stractured Operations, described below, to pay bribes to Brazilian politician and politcal partis, as well as to an oficial a Petrobras, in exchange for helping BRASKEM maintain a joint venture contrat with Petrobras, a reduction in pricing for raw materials that BRASKEM purchased from Petrobras swell as eduction in BRASKEM's tax faites, and other benefits 27. Odebrecht xeatod and fanded an elaborate, seeet Financial structure hat ‘operated to account for and disburse comupt bribe payments o, and forthe benefit of, frcign lil and foreign politcal paties. Overtime the development and operation af this secret finanil structure evolved, and in or dbout 2006, Odebrecht established the Division of Structured Operations, «standalone division within the company. ‘The Divison of Structured ‘Operations etfectvely functioned as a bribe department within Odebrcht. To conceal its activities, the Division of Structured Operations utilized an entirely separate and off-book ‘communications system, which allowed members ofthe Division of Structured Operations to‘communicate with one another und with outside financial operators and others about the bribes ‘through the use of secure emails and instant messages, il codename and password 28. To conceal BRASKEM's criminal conduct and corrupt payments, [BRASKEM provided funds tothe Division of Sttured Opertions. Once BRASKEM sent funds wo the Division of Structured Operation, the Division of Structured Operations funneled the funds nt a series of offshore entities that were not sted a related entities on BRASKEM’s balance sheet, and the funds were no longer recorded on BRASKEM’s financial statements. [BRASKEM, through the Division of Structure Operations, concealed and disguised comupt payments made to and forthe benefit of, foreign officals and foreign political parties in Bea “Many of the transactions were layered through multiple levels of offshore entities and bank accounts throughout the world, often transferring the ili funds through upto four levels of offshore bank accounts before reaching the final recipient. In this egand, members ofthe ‘conspiracy sought to distance the origin of the funds from the final beneficiaries. 29. ‘The funds were also disbursed by financial operators who acted on behalf ‘of the Division of Steuctured Operations, including but not limited tothe beneficial overs ofthe accounts andlor dolevos (also known as money waders, who function to exchange Brazilian Reals (“RS”) for United States dollars, who delivered the payments in cash in Brazil or other foreign counties, in packages or suitcases a locations predeterm by the boneficary ofthe funds of made the payments via wire transfer through ane or more ofthe unrelated offshore entities 30. BRASKEM initially benefited from the operation ofthe Division of ‘Structured Operations, s well as slush fund that was the precursor tothe Division ofStructured Operations (which was managed by an Odsbrect subsidiary, Construtora Norberto (Odebrecht *CNO"), due tots status as an Odebrecht subsidiary. ‘Thats, before 2006, Odebrecht excutivesassociatd with BRASKEM directed the Division of Strvctured Operations andlor he slash fund operators to make corupt payments to support BRASKEM's financial and political interest altiough BRASKEM was not contbuting diel tothe Division of Strutured Operations or the slush fund et that time, Specifically, Odebrecht executives directed the Division of Structred Operations andlor the shih fund to make payments o various _zovemnent officials in connetion with the consolidation of the petrochemical sector under BRASKEM’s control. However, by approximately 2006, BRASKEM's most senior execuives and Board members dotrmined that BRASKEM would start generating its own unrecorded funds to deposit nto the Division of Structured Operations 31. Specialy, in approximately May’ or June 2006, raskem Employee 4 — then a high-level exccutive at BRASKEM ~ approached Braskem Employee 2 and advised Braskom Employee 2 that BRASKEM needed to generate its own unrecorded funds to make payments to goverment oficial in support of its own strategie goals. AC subsequent ‘meeting, Braskem Employee 2 and Braskem Employee 4 instructed Braskem Employee 7, then a high-Level finance executive at BRASKEM, to create a system for BRASKEM to generate ‘unrecorded funds that could be pad into the Division of Structured Operations. Braskem Employee 7, in tun, hire hoth an attorney anda Suis citizen with banking experience to setup that system. BRASKEM generated unrecorded funds to deposit into the Division of Structured ‘Operations by making payments pursuant ofabricted “commissions” contracts with three fcttious import and export agents. BRASKEM used its bank accounts in Brazil and/New‘York-based ban account held by Braskem Incorporate to pay offshore shell companies ‘ostensibly held bythe ititious export and import agents. BRASKEM, under he guise ofthe fetious agents, then directed the money o accounts held by the Division of Srotued Operations. 32, In general, certain individuals serving as officers at BRASKEM — including Brasher Employse 4, Braskem Employee 5, and Braskom Employee 6 had utnomy in managing BRASKEM’s Divison of Structured Operations deposits and disbursements. Certain individuals serving as high-level financial executives at BRASKEM — including Braskem Employee 6 were responsible for monitoring the generation of uarecorded funds, A BRASKEM employe the company’s financial division oversaw the transfer of ‘urecorded fonds tothe Division of Structured Operations from te offshore shell companies, and periodically met with members of Braskem Agent 2s team o check on BRASKEM's Division of Stuctred Operation balance. Payment from the Division of Stuctted Operations at BRASKEM’s diction were made by Braskem Agent 2's eam 33, In total BRASKEM diverted approximately RS513 milion equivalent to $250 millon into offshore shell companies for transfer nto accounts managed by the Division ‘of Structured Operations, and italso directed the Division of Structured Operations to make bribe payments on its behalf: Approximately $75 milion ofthe money BRASKEM paid into the Divison of Structured Operations was used to make bribe payments to scare Benefits t9 BRASKEM of approximately $289 milion, including, as described below, corupt payments to Petrobras executive and corrupt payments to other government ofc isin Bruil. BRASKEM also paid an addtional $175 million into the Division of Survetured Operations for which a dirt 0‘benefit has not been identified but which payments otherwise reflect a internal controls and a falsification of BRASKEM's books and records 34, BRASKEM, through certain executives and employees, falsely recorded the payments that were diverted into the Division of Structured Operations-managed bank accounts on, among other things, BRASKEM's general ledger and electronic finance system as “commissions for agents,” and knowingly and willfully created fake and fraudulent ageney contracts and other documentation in order to mask the true purpose ofthese payments, 35, In fatherance ofthe conspiracy, and to exceute the corrupt payments, beginning in or about and between 2006 and 2014, BRASKEM, through certain employees and ‘agens, caused wire transfers to be made from bank accounts located in Brazil and the United ‘Stats, into shell company accounts located ouside the United States. These payments tothe offshore shell companies were subsequently transferred tothe Division of Steuctured Operations 36. BRASKEM, through its agents, also took acts in furtherance of the eorupt scheme while inthe territory ofthe United States. Fr example, some of the offshore entities ‘that dhe Division of Structured Operations used to old and disburse unrecorded funds were «established, owned and/or operated by individuals located in the United States. IV. BRASKEM’s Cont Payments to Foreign Officials 37. During the relevant period, BRASKEM together with its co-conspirators, made payments to various government officials in the Bra sn government with the understanding that such payments would serve as, in essence, a retainer that would permit BRASKEM and its co-conspirators to callin favors when necessary to assist with BRASKEM's business38. Inadion, BRASKEM made cortnt payment in connection with specific contracts and benefits that BRASKEM sought in Brazil. A number ofthese specific payments, contacts and benefits are described more Filly below. A 9 of Favorable Tax Legislation 39. In approximately 2006, series of judicial lings in Bra alle ino «question the applicability of certain tax credits. Asa result, BRASKEM faced a potentially signiticant increase init tax ability. In response, Odebrecht and BRASKEM took a number of steps to ensure the passage of legislation that would mitigate the los of such credits on BRASKEM’s overall tx libs 40, First Braskem Employee I directed Braskem Employee 3 reach ut to Bravtion Official 3, Braskem Employee’3 made contact, asking Brazilian Ocal 3 to both intercede with Brazilian mi +, and to advise a member of Brian Offical 's sta prepare Beilin Offical 10 approve legislative solution approved by Odcbrect and BRASKEM. oth individuals agred o help Lraskom Employee 3 41, Atthe same time, another Odebrecht exccutive spoke diet to Brazilian Official 1, and asked Brazilian Oficial | to exert influence over Brazilian Official 4. Braskem Employee I then met vey with Bravitian Official 4 on several occasions to press the issue. At one of those meetings, Brzilian Oficial 4 asked Braskem Employee 1 foe contbuton 0 Brazilian Offical 2's upcoming political campaign i exchange fo the ofiials assistance ‘Specifically, Brazilian Offical 4 wrote down the amount “RS50 million” ona piee of paper and slid it acros the table to Braskems Employee 1. Braskem Employee | discussed the bribe ‘request with Braskem Employee 5; given the potential impact of the resolution on BRASKEM, nBraskem Employee $ agreed that BRASKEM would pay the bribe, Although the request was famed as a cootebution to Brazilian Official 2's campaign, Braskem Employee I knew thatthe funds were not going to be used forthe campaign. Rather, Braskem Employee I understood that they would be distributed after the next election forthe personal benefit of various polit 42, Asa result ofthese efforts in or about 2009, solution was reached inthe form of program het would, in effet, allow companies to employ an accounting rl to rece tax laies in a simile fashion a the orginal ax credits. Tat program was subsequently ‘incorporated into legislation that was converted int aw in approsimaely 2010, BRASKEM ‘benefited from these measures and was permitted to use the rule to reduce is ax ibis. 43. BRASKEM subsequently used the Division of Structured Operations to ‘make the R50 milion bribe payment to Brazilian Official 2's politcal campaign with unrecorded funds. The company aso use the Division of Structured Operations to pay RS14 nillion to Brazilian Official 3 forthe officals effort. B. Confimation of Favorsble Tax Treatment For Raw Materials 44, Imorabout 2008, state officials ina region where BRASKEM operated a petrochemical plant ook te posit that «particular ax shouldbe pad in connection with BRASKEM’s ue of aw materials atthe plant. BRASKEM disaroed withthe officals? positon, and argued that the tax didnot apply. BRASKEM's refs o pay the tx easod the state officials to restiet BRASKEM's receipt of certain raw material, which threatened BRASKEM's operation of the plant45. BRASKEM atterpted to resolve the issue by making is case to state and federal officials through formal channels tha the tax did net apply. Atthe same ime, however, BRASKEM also sought to leverage the bribes it had been making ona regular basis to Brazilian officials to help secure a favorable outcome ofthis suc. Specifically, Braskem Employee 3 asked Bravlan Oficial 3, recipient of many ofthe recurring corupt payments fro the Divison of Structured Operations, forthe official's support and influence to get regulatory ction sting the mater. Bravilian Official 3 agree, and Braskem Employee 3 gave him specific language to include in the regulation. 46. Based on these efforts in or about December 2008, the federal government published a decree which clarified tha the tax in question id not apply othe raw ‘materials sod by BRASKEM, Basel on that statement, BRASKEM was able to resume nocmal operation of its pant. Retention of Petrobras Contact 47. Imorabout 2005, BRASKEM signed a series of contracts with Petrobras to complete a significant petrochemical project. BRASKEM subsequently became concemed that Ptobres would aot honor those contacts, and would instead try to give the projet to one ‘of BRASKEM’s competitors. 48, Inresponse, Braskem Employee 4 dict Braskem Employee 3 worse the matter with Bra n Official 6, and to take steps to ensure BRASKEM would retain the project, Braskem Employee 3 had series of meetings with Brazilian Offical Sand Brazilian Official 6, aw both asked for bribes in return forasistance, After negotiations, they soitled on a payment of RS4.3 million, which would be conditioned on BRASKEM maintaining “allf the contacts with Petrobras related to the projet. Braskem Employee 3 futher stipulated that no payments would be made ntl centsin aspects ofthe project were actually underway 49, Braskem Employee 3 brought the bbe proposal to Braskem Employee 4 for approval, and Braskem Employee 4 agreed. Petrobras limately honored its contracts with, [BRASKEM, andthe project proceeded. Thereafter, BRASKEM authorized Braskem Agent's tsam to make te agreed-upon payments to Brazilian Official S and Brazilian Oficial 6. The payments totaling RSS3 milion were pad in installment in proximately 207 and 2008, via intemational wire transfers paid to Foreign accounts D. Naphtha Supply Contract 50, Inoreboutmid-2008, BRASKEM end Petrobras began to negotiate a new long-term contract for naphtha ( colorless, volatile petroleum distil that isa raw material for certain of BRASKEM’s petrochemical operations). The technical teams From each company’ proposed and then debated various pricing formulas forthe contract. Petrobras int ly proposed pricing formula based on an nteatinalindsty standard eference that resulted in athigher price for Petobras.BRASKEM rejected tis proposal, and instead proposed formula that was a variation on tat standard ha elle in Lower price for BRASKEM. SI, __Atthis point, Braskem Employee S asked Braskem Employee 3 to sek Brazil n Official 6's assistance in moving the negotiations along. Braskem Employee 3 met with Brazilian Official 5 and Brazilian Official 6, who agreed to assist BRASKEM by getting Brazil 19 Official to put pressure on Petrobras to reduce the naphtha price to BRASKEM. In return, Braskem Employee 3 promised to pay Brazilian Official $ and Brazilian Offical 6 a bribe ‘of $12 million va the Division of Structured Operations. Is52. After several addtional rounds of negation, during which Brazilian Officials became involved in the process, both pais agreed oa nv formula tha reduced the price of naphtha for BRASKEM. This formula was presented to Petrobras Executive Board con or about March 12,2009. Although the Petrobras Executive Board signed off on many ofthe agreed-upon contact conditions, it changed the formula terms to increase the pice of naphtha [BRASKEM rejected this change, indicating tat the formula could not be changed without reopening the nego tion process 53, Braskem Employee 5 asked Braskem Emplayce 3 to go back to Brazilian Ocal 6 and seek further assistance. Braskem Employee 3 told Braiian Offical 6 that BRASKEM would not pay the $12 million unless the Petsbrat-BRASKEM naphibe contract {nuded a price that was more boneficial to BRASKEM. Brean Official 6 agred to ask Brazil 0 Official 5 once agin ta intervene on behalf of BRASKEM. ‘Thereafter, Braziian Oficial 5 personaly intervened, and ensured thatthe negotiation process was held open until the next mectng of the Petrobras Executive Bose the following month, Brazilian Official S also ‘aanged a meeting at Petobras’s headquarters between Brazilian Official 8, Braskem Enployee 1, Braskem Employee $ and an executive officer of Petobrs, a which BRASKEM vas able to make a general presentation direty to the executive olicer about the algnment of BRASKEM’s and Petobras's intros. ‘5. Following the mosting, athe direton of Brain Oficial 5, BRASKEM agreed to negotiate financial recieostos with Petrobras to justify the reducing ofthe pice of| raph to the level that BRASKEM wanted. Ulimately, Petrobras agreed to formula that‘over the course ofthe contract would have the net effet of reducing the price of the naphtha that BRASKEM purchased, The contract was finalized in approximately July 2009. 155. Shortly thereafter, BRASKEM, via the Division of Structured Operations, ‘began to make payments in installments on the $12 million bribe to Brazilian Offical Sand Brazilian Official 6, Specifically, Braskem Employee 3 received foreign bank account numbers 19 Official Sand Br from an intermediary for Braz Oficial 6, and passed ther on wo a member of Braker Agent 2's team, who in tum would make the payments via interational wite transfer, ‘These payments continue even afer Brusilian Official 6's death and Braskem Employee 5's departure from BRASKEM in or about 2010; in this later perio, the payments wore oversten by Braskem Employee S's successor, Braskem Employee 6, The full amount ofthe bribe was nt pad until approximately mi-2011 E, Tax Credit Negotiations in Corn Brin Sats 56, nthe mid-2000s, et its business model, BRASKEM began to accumulate credits a particulary high tein certain Brazilian states in which it operated. I'BRASKEM went asad and used those accumulated eet as anticipated, it would ease to ‘generate any tax revene fr those states. By approximately 2008, the imbalance had gotten so pronounced thatthe sate goversments sated to threaten BRASKEM with significant increases in other axes. Asa tet, BRASKEM sought to resolve the matter both by entering into legitimate negotiations with state officials, and by making significant eampign contbutons to corruptly influence state government officials decisions with respect othe tx issue. BRASKEM benefited from these comupt payments, which ensured & favorable outcome; while‘the states were able to collet some revenue from BRASKEM, the company continued to benefit significantly from the tx credits ‘57, For example in one state, BRASKEM entered into a series of agreements Jn which it agreed to () imitthe use of i sccumulated tax cre, i) invest more than RSI billion in inftatrctue projects and (i) crete jobs inthe state all in exchange for the state not changing the tax stuctate so that BRASKEM and silrly-stated companies could continue to ssc their emaning credits without penalty. Brazilian Oficial 9 and Braskem Employee, acting on BRASKEM’s behalf, signed of on these agreements 58. During the negotiation ofthese agrements, Braskem Employee 3 separately negotiated the payment, wih relative of Brazilian Official 9, of substantial offical ‘contributions by BRASKEM to Bravlian Official 9's campaigns for tat office resulting in & 'RS200,000 consrbution in connection with Braitian Oficial 9's 2006 campaign and a $600,000 payment in connection with Brazilian Oficial 9's 2010 reelection campaign. Braskem Employee 3 understood that these payments were provided in exchange fr Brazilian Oficial 9 signing the series of tax credit agreements with BRASKEM. 59, Simily, nor about and between 2008 and 2009, BRASKEM reached an agreement with anther Brazilian slate tht BRASKEM would limit its use of tax erdis ia return fr investing moe than RS650 milion in infastracture projets in that state. The high- level official esponsible forthe negotiation that resulted in that agreement had previously received campaign contributions from Odebrecht forthe 2006 election totaling RS3 million through a combination of oficial donations and donations of unrecorded funds from the Division cof Strvctured Operations. The purpose of those donations was to secure the official's assistance‘on issues that affected Odebrecht and its related entities, including BRASKEM, such asthe ‘resolution of BRASKEM's accumulated tx credits PF. Approval of Favorable Tax Incentive i 60. Inorabout 2010, several Bra 1entives that BRASKEM believed would ease ito be less competi BRASKEM considered the issue a top priority, and mobilized along several parallel tracks to eliminate such incentives, Braskem Agent | handled discussions withthe Brazilian Congress, primarily through Brazilian Official 7, and Braskem Employee 1 altempted to influence the esscutve branch, primarily tough meetings with Brazilian Official 4 4, Subsequently, Bruzilin Official 4 appointed Brazilian Oficial 7a the person responsible to draft and oversee legislation that would help BRASKEM reduce or climinate the tax incentives. Astheletslation progressed, Brasher Agent I kept tas onthe process, speaking frequently to Brazilian Oficial 7 and other members of Congress. In March 20 Brasker Employee 6 met with a numb of Brazilian legislators, incloding Brazilian Official 7 and Brazilian Oficial 8, to discuss the specifics ofthe legislation BRASKEM understood that it neded to pay bribes to Brazilian Oficial 7 and other officals in onderto secure their support in connection with the legislation. 62, Subsequently, lgiltion was passed tat reduced the ability ofthe tates to grant the tx incentives. Assoon athe legislation was finalized, Braskem Agent | notified raskem Employee 6 and Braskem Employes | thst BRASKEM needed to aprove the release ‘of unrecorded funds to fulfil commitments wth cettn members of Congress who had Yoed foe the measure, Braskem Employee 6 then spoke to Braskem Agent 2 and authorized the release 19‘of RS4 million from the Divisio of Structured Operations tobe disbursed at Braskem Agent I's ‘irooton. Braskem Agen I advised Braskem Employee 6 that Brazilian Oficial 7 was one of the recipients ofthe unrovorded ands 63. Aller th inital disbursement of finds from the Division of Strctred Operations was made to cera legislators, Braskems Employee 6 was noid that another member of Cones involved in the legislation had complained that he deserved a RSS00,000 payment ftom BRASKEM for the ators work sting the measure approved. Braskem Employee 6 authorized the payment tothe egsator, and Division of Structured Operations paid the legislator with unrecorded fads G. Approval ofFavorabie Tax Exemption Lexisation (64, Imorabout 2011, Braskem sought to persuade the government to implement anew tax exemption that would benefit petrochemical companies like BRASKEM, Odebrecht and BRASKEM approached securing this exemption on several fom. Braskern Employee 6 focused on gamering industry support forthe exemption; Braskem Agent 1 dealt ‘with members of Congress; and Braskem Employee | handled disussions withthe executive branch, specially Brazil 11 Official 4, As a esl oftheir efforts, legislation that included the tax exemption was introduced in Congress in approximately 2013, However, issues arose asthe legislation progressed towards vole, First, an amensiment was added othe legislation that was unpopular with many ofthe legislators. To eliminate the amendment, Braskem Employee | called Breton Oficial 4, who in tum placed Braskem Employee 1 in touch with an aide to a government oficial. Braskem Employee | convinced the ae to drop the unpopular amendment. 2065, However, the legislation was elfetvely saleby a request made by a ‘high-level oficial in the lepsltve brane who proposed eliminating a diferent amendment. In response, Braskem Agent I contacted Braskem Employee 6 and Braskem Employee I, and conveyed that BRASKEM needed op significant sums to various members af Congres in ‘order o get the request ited and to move the leisation along. Braskem Employee 6 approved the request and fold Braskem Agent 2 to make unrecorded funds from the Division of Structured Operations available to Braskem Agent I. Afr the funds were disbursed, te high-level oficial lited the request to eliminate the amendment, andthe legislation was passe, 66. Braskem Agent I subsequently advised Braskem Employee 6 thatthe payments were divided among a number of members of Congress. Specifically, approximately S21 million had been paid to the hih-vel oficial who had proposed elimivating an amendment; approximately RS4 milion bad been paid to Brazilian Oficial 7 (who Braskem ‘Agent | believed shared the Funds with Brain Official approximately RSI t0 $15 milion Ind been pi oa high-level oficial in the legislative branch; and approximately RS100,000 had boon pit second high-level oficial inthe lesisaive branch, 67. ination, while Brazilian Official 4 received no specific compensation forthe officials role in ensuring the passage of the legislation, BRASKEM was required to pay an additonal RS100 million above and beyond what Braskem Employee I had previously areed ‘with Brazilian Official 4 to pay to the offi’ polite party an to members of te federal ‘government, This increase was negotiated by Brazilian Offical 4 and primarily went to contributions for party members inthe 2014 campaigas. 2CONSPIRACY TO BRIBE FOREIGN OFFICIALS 68. The allegations contained in paragraphs one through 67 are realleged and ‘incorporated as though fully set forth inthis paragraph, 69, Inorabout and between 2002 and 2014, both dates being approximate and the Eastem District of New York and elsewhere, the defendant BRASH inclusive, wit \ togeter with others did knowingly and willy conspie to commit offenses aginst the United States, to wit as an issue, to willl make use ofthe mails ad mans and instrumentals of irs commerce comply in furtherance of an offer, payment, promis o pay, and authorization ofthe payment of any money, oi, gf, promise to give, and authorization of the iving of anything of value ta foreign oficial foreign politica party, forcian politcal party oficial a frcign politcal candidate and toa person, while knowing tht all ara portion of sich money and thing of value would be and had been offered, given, and promised to a foreign official a foreign poicl party foreign political party ofl anda foreign politieal candidat, for purposes of (influencing acs and decisions of suh foreign official, foreign poll party, foreign politcal party offal and foreign pial candidate in iso her ofa, capacity (b) inducing such forcign offical, foreign pola pany, fren politcal panty oficial and foreign politcal candidat odo and omit to do sets in violation ofthe lawl duty of such official (securing any improper advantage; and () inducing such foreign oficial, Foreign politieal party, foreign political party official and foreign political candidate to use his or her influence with a foreign government and agencies and instrumentals thereo?t affect and influence acts and decisions of such government and agencies and instramentaite, in onder to assist BRASKEM, and its employees and agents, in obtaining and retaining business for and 2with and diceting business to BRASKEM and others, contrary to Tile 15, United States Cade, Section 78d 70, In furtherance ofthe conspiracy and to effet its objects, the defendant [BRASKEM, together with its e-conspitators, committed and caused 1 be commited within the aster District of New York and elsewhere a east one ofthe fllowing ove e s 4. Inor bout and between 2005 and 2006, Braskern Employee 3 nogotiaced the payment of entibuions by BRASKEM to Brazilian Oficial 9s 2006 campaign. b, Ino shout and between May 2006 and June 2006, rake Employee 2 and Braskem Employee 4 instructed Braskem Employee 7 to cesta system 0 generate uneconde funds for BRASKEM. 6. Inorabout 2007, Braskem Employce 4 authorized the Division of Struetured Operations to make payenens totaling $43 milion to Brazilian Oia Sandor Bravilian Official 6. 4. Imorabout 2008, Braskem Employee 3 agreed to make a payment ‘$12 million to Brazilian Offical Sand Braiian Oficial 6 € _Inorsbout 2008, Braskem Himployee3 and Bravlan Oficial 3 discussed draft language fora regulatory ction. £Inorabout 2009, Braskem Fimployee 1 and Braskem Employee 5 iscussed a request fom Brazilian Oficial 4 fora RSS0 milion payment. 1. Inorabout 2009, Braskem Employee 3 negotiated the payment of contributions by BRASKEM to Brazilian Official 9's 2010 campaign. 2hh. Inor about and between 2009 and June 2010, Braskern Employee 5 authorized the payment of $12 million from the Division of Structured Operations in installments to Brazilian OM 5 and Brazilian OMTcial 6, i, Imor about and between 2009 and 2010, BRASKEM directed the Divi of Structured Operations to make & RSS0 million payment to Brazilian Official 2's politcal campaign. Incr about March 2012, Braskem Employee 6 met with Brazitan Official 7, Beli Offic 8 and others to discus legislation related to ax incentives: . Inor about 2012, Braskem Employee 6 authorized the release of [RS4 million from the Division of Structured Operations to he disbursed to Brazilian Oficial 7 and other government oficial 1 fnor about 2012, Braskem Employee 6 confirmed the isbursement of a portion of R64 milion in unrecorded funds authorized by BRASKEM to, mong others, Brazilian Official 7. 1m. Inor about 2012, Braskem Employee 6 and others authorized the payment of RSS00,000 o amember of Congres. 1. Inor shout and between 2012 and 2013, Brasher Employee {and Braskem Employee 6 discussed making payments to various Ielsators to ensure the passage of legislation related to tx incentives. ©. Thor about and between 2012 and 2013, Braskem Employee 6 authorized the payment af approximately RS7.6 million from te Division of Strata ‘Operations to be disbursed to government officals, including Brazilian Official 7 mP.tnocaboutang between 2012 and 2013, BRASKEM pad approximately RS7.6 milion trough the Division ofSructred Operations using vrecondd fonds to various government offal inl Brazilian Oil 7. 4 Onaratout April 28,2016, BRASKEM made payment inthe ‘mount of $1,611,205 from = New Yor besed bank account eld by Braker Incorporated to ‘an offshore sel company controled by BRASKEM, Onorabout Api 30,2014, BRASKEM made psymentin he ‘amount of $1405 48926 from another New Yark based bank acount held by Besskem Incorporated oan offshore sell company controled by BRASKEM (te 18, United States Code, Sections 371 and 3551 st sea) Q ROBERT E, CAPE UNITED STATES ATTORNEY EASTERN DISTRICT OF NEW YORK ‘ANDREW WEISSMANN CHIEF, FRAUD SECTION CRIMINAL DIVISION US. DEPARTMENT OF JUSTICE 2