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Swiss Prosecutors Say Trafigura Turned $5M Bribe Into $140M Profit

Corrupt payments secured huge profits for the commodities trader on shipping and bunkering contracts, prosecutors say

Cash

Published Dec 6, 2023 8:19 PM by The Maritime Executive

Commodity-trading house Trafigura and chief operating officer Mike Wainright have been under pressure for the last three years over corruption allegations, and the pressure intensified this week with a new set of criminal charges in Switzerland.

In 2018, Brazilian authorities began investigating a pattern of alleged bribery involving Trafigura and state-owned oil major Petrobras. Trafigura employees allegedly paid Petrobras officials $1.5 million in exchange for a below-market price on petroleum sales. Brazilian authorities sued Trafigura and Wainwright over the scandal in 2020, and Trafigura has denied involvement. It faces a related U.S. federal investigation into improper payments in Brazil, and has set aside $127 million to settle a Department of Justice inquiry.

This week, Trafigura said that a former employee who had been caught up in the Brazilian scandal tipped off investigators to a second, similar alleged bribery scheme - this time in Angola. Acting on the tip, the Swiss Office of the Attorney General (OAG) accused Trafigura of failing to prevent "unlawful payments" to an official with Angolan state oil company Sonangol. 

The alleged corrupt payments occurred back in 2009-11, according to the Swiss OAG. Authorities say that Trafigura paid the unnamed official $5 million in bribes to secure $140 million in profits from shipping and bunkering contracts - a 30-fold return on investment. In a statement, the OAG said that Trafigura's internal controls were "not apt to prevent the high risk of corruption associated with the Trafigura group’s activities.”

It is the first time that the Swiss government has ever brought a criminal case against a company for overseas bribery, and Trafigura said that the prosecutors' office refused to settle the matter privately. The case will go to trial in Switzerland's Federal Criminal Court. 

In a statement, Trafigura CEO Jeremy Weir said that the company has changed over the course of the intervening decade.

"We sincerely regret these incidents which breached our code of conduct and are contrary to our values," said Weir. "These historical incidents in no way represent the company we are today."

The OAG has also charged Wainwright, who has denied the charges and will defend himself in court. He had already announced plans to leave the firm in March 2024.

Corruption scandals are common in the commodities-trading business, and competitors Vitol and Glencore have also had their time in the spotlight for bribery allegations. The profit margins laid out in the Sonangol and Petrobras cases suggest that traders can secure exceptional terms by bribing officials, and have a large profit motive to do so.