FBI investigates bribes in Brazil against Johnson & Johnson, Siemens, General Electric and Philips

The FBI survey of the giants Johnson & Johnson, Siemens, General Electric and Philips for allegedly paying bribes in a negotiation related to the sale of medical equipment in Brazil, two Brazilian researchers told the news agency Reuterswho published the information exclusively.

Brazilian prosecutors suspect companies are sending illegal payments to government officials to secure contracts with public health programs in the South American giant over the past two decades.

Brazilian authorities say that more than 20 companies could have been part of a "cartel" that paid bribes and charged the government inflated prices for medical equipment, such as diagnostic imaging, magnetic resonance imaging and prosthesis machines. The four multinationals, with a market capitalization rising to nearly $ 600 billion at the close of Thursday's market, are the largest foreign companies that have been the subject of an investigation. in an unprecedented case against corruption in Brazil in recent years.

Foreign companies are the latest targets of government-led corruption investigations in Brazil. In the past five years, the government has been shocked by the revelations of widespread corruption in state institutions and private sector companies seeking to deal with them.

Intense investigations by prosecutors and the federal police, including the famous raid "Operation Lava Jato"focused on the Brazilian national oil company Petrobras, experienced the political system of several Latin American countries at the same time as it undermined the leadership of many major companies on the continent.

The authorities said prosecutors' repentance agreements with suspects alerted them to other possible bribery schemes, including alleged bribes by multinationals for obtaining contracts. in Brazil.

"Constant information sharing"

The Brazilian Federal Prosecutor Marisa Ferrari confirmed in an interview with Reuters that US authorities from the Department of Justice and the Securities and Exchange Commission (SEC) have participated in the investigation on the sale of medical equipment to her country, of which she is a member.

In 2016, US and Brazilian prosecutors jointly negotiated the heaviest sanction in the world, namely a fine of $ 3.5 billion against the Brazilian conglomerate of construction. Odebrecht SA for its part in the scandal Lava Jato.

"We are constantly sharing information with the FBI about this case (selling medical equipment), they are asking for documents and we are sending them and, in exchange, they are helping our investigation," Ferrari said. In addition, the prosecutor said he received "a large amount of documents from the Ministry of Justice and the SEC".

Ferrari has refused to name the companies investigated by US agencies.

Confirmation of two Brazilian researchers with direct knowledge of the issue Reuters Johnson and Johnson, Siemens AG, General Electric Co and Koninklijke Philips NV were currently under investigation by the FBI for alleged bribes in Brazil. Brazilian investigators spoke on condition of anonymity because they were not allowed to discuss the US part of the investigation.

The FBI has neither confirmed nor denied the existence of an investigation. The SEC, which also investigates FCPA violations, was apologized by e-mail for comment.

General Electric, based in Boston, declined to comment on any investigation related to its activities in Brazil. In an e-mailed statement, he said: "We are committed to integrity, compliance and the rule of law in Brazil and all other countries in which we operate."

Siemens, based in Munich, said in a statement sent by email that the company "is not aware of any FBI investigation of the cartel company in Brazil." He said his policy is always to cooperate with investigations when they occur.

Philips, based in Amsterdam, confirmed in an email that it was currently under investigation in Brazil. In its annual report 2018, Philips acknowledged "having also received inquiries from certain US authorities on this subject".

In your reply sent by email to ReutersPhilips said "that it is not uncommon for US authorities to show interest in these issues and that it is too early to draw conclusions".

Johnson & Johnson, based in New Brunswick, New Jersey, said in an email response that the Department of Justice and the SEC "had conducted preliminary consultations with the company" as part of a raid carried out by the Brazilian Federal Police. San Pablo offices last year and the company is cooperating.

Brazilian prosecutor Ferrari said that the investigation into the sale of medical equipment was in its infancy. Nevertheless, he added, evidence shows that companies seeking to take advantage of Brazil's public health system, one of the largest in the world, serving 210 million people, report pots of generalized -vin and rising prices.

"Because the Brazilian government's health budget is so important, this program is really mbadive," said Ferrari. "This first case is only a small part of what will happen."

In addition to paying bribes through intermediaries for contracts, some suppliers charged the Brazilian government inflated prices, up to eight times the market price, to cover the cost of their contracts. bribes, according to the documents presented to the courts and the testimony of a repentant before the prosecutors.

The former CEO of General Electric for Latin America, Daurio Speranzini, and 22 others were indicted last year in the first case related to the alleged transaction.

Prosecutors said the case, which focused on the state of Rio de Janeiro, had shown how Brazilian taxpayers had been scammed by at least R $ 600 million ($ 149.38 million) between 2007 and 2007. and 2018 through faked contracts awarded to suppliers of corrupted medical equipment.

Speranzini's lawyers, who quit General Electric in November, said by e-mail that he was innocent.

Prosecutors say that Speranzini first participated in cartelization as head of Philips Healthcare's Latin American operations from 2004 until the end of 2010. An informant told the bureau about Philips' compliance with the fraud, and Speranzini was fired after an internal investigation, according to the documents.

He was hired by General Electric a few months after leaving Philips. Researchers say they have strong evidence that Speranzini continued this program while he was at General Electric.

General Electric declined to comment on the hiring of Speranzini or his departure from the company.