Under the plea agreement terms, which remain subject to court approval, Glencore pleaded guilty to conspiracy to violate the FCPA and agreed to a $428.5 million criminal fine and criminal forfeiture and disgorgement of $272.2 million, according to the Justice Department.
Glencore reached separate parallel resolutions with the U.K. Serious Fraud Office (SFO), the Brazilian Federal Prosecutor’s Office (MPF), and the Commodity Futures Trading Commission (CFTC). Under the plea agreement, the Justice Department said it has agreed to credit nearly $256 million in payments Glencore makes to the CFTC, to the U.K. court, and to Swiss authorities, if Glencore reaches a resolution with Swiss authorities within one year.
Commodities Price Manipulation
Separately, Glencore Ltd. admitted to engaging in a multi-year scheme to manipulate fuel oil prices at two of the busiest U.S. commercial shipping ports—the Port of Houston and the Port of Los Angeles. Under that plea agreement, which remains subject to court approval, Glencore Ltd. agreed to pay a criminal fine of $341.2 million and pay forfeiture of $144.4 million.
Under the CFTC action, Glencore must pay a total of approximately $1.2 billion, which consists of the highest civil monetary penalty ($865.6 million) and highest disgorgement amount ($320.7 million) in any CFTC case, the CFTC stated. The Justice Department said it will credit over $242 million in payments that the company makes to the CFTC in that related, parallel civil proceeding.
The plea agreements with the Justice Department each require the appointment of an independent compliance monitor for a period of three years to assess and monitor the company’s compliance with the agreements and to evaluate the effectiveness of its compliance program and internal controls.
Glencore Energy UK Limited is also expected to plead guilty to charges brought by the SFO regarding allegations that “Glencore agents and employees paid bribes worth over $25 million for preferential access to oil, with approval by the company,” the SFO stated. A sentencing hearing in Southwark Crown Court is scheduled for June 21.
Decade-Long Bribery Scheme
The Foreign Corrupt Practices Act (FCPA) violations arose from a decade-long scheme by Glencore and its subsidiaries to make and conceal corrupt payments and bribes through intermediaries for the benefit of foreign officials across multiple countries.
According to admissions and court documents filed in the Southern District of New York, between approximately 2007 and 2018, Glencore, “acting through its employees and agents, engaged in a scheme to pay more than $100 million to third-party intermediaries, while intending that a significant portion of these payments would be used to pay bribes to officials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil, Venezuela, and the Democratic Republic of the Congo (DRC),” the Justice Department stated.
“The scope of this criminal bribery scheme is staggering,” said U.S. Attorney Damian Williams for the Southern District of New York. Glencore paid bribes to secure oil contracts (in Nigeria), avoid government audits, and “bribed judges to make lawsuits disappear,” he said.
“At bottom, Glencore paid bribes to make money—hundreds of millions of dollars—and it did so with the approval, and even encouragement, of its top executives,” Williams added.
Compliance Considerations
The Justice Department said it weighed several factors in reaching an agreement with Glencore, including:
- The “nature, seriousness, and pervasiveness of the offense conduct,” which spanned over a decade, in numerous countries, and involved high-level employees and agents;
- Glencore’s failure to voluntarily and timely disclose the conduct to the Justice Department;
- The state of Glencore’s compliance program and the progress of its remediation;
- Glencore’s resolutions with other domestic and foreign authorities; and
- Glencore’s continued cooperation with the Justice Department’s ongoing investigation.
“Glencore did not receive full credit for cooperation and remediation, because it did not consistently demonstrate a commitment to full cooperation; it was delayed in producing relevant evidence; and it did not timely and appropriately remediate with respect to disciplining certain employees involved in the misconduct,” the Justice Department stated.
“Glencore has invested substantial resources towards developing a best-in-class Ethics and Compliance Program,” the company stated. “Glencore has also taken extensive remediation actions, including through the separation or discipline of employees involved in the wrongdoing. The Company has a refreshed board and management team, who are dedicated to fostering a culture of integrity, responsibility, and transparency.”
According to the Justice Department, several relevant considerations contributed to the Department’s plea agreement with Glencore Ltd., “including the nature and seriousness of the offense, Glencore Ltd.’s failure to fully and voluntarily self‑disclose the offense conduct to the department, Glencore Ltd.’s cooperation with the department’s investigation, and the state of Glencore Ltd.’s compliance program and the progress of its remediation.”
Sentencing has been scheduled in the market manipulation case for June 24, and a control date for sentencing in the FCPA case has been set for October 3.
Glencore stated that it “continues to cooperate with a previously disclosed and ongoing investigation by the Office of the Attorney General of Switzerland (OAG) into Glencore International for failure to have the organizational measures in place to prevent alleged corruption and an investigation of similar scope by the Dutch Public Prosecution Service.” 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.