Spain's Telefónica settled a case of bribery of Chavista regime officials in Venezuela by paying a fine to the US

The U.S. Department of Justice announced Friday that Telefónica Venezolana, a subsidiary of Spanish telecom giant Telefónica, agreed to pay more than $85 million to settle an investigation into a bribery scheme to officials of the Venezuelan dictatorial regime. This ruling brings to an end an investigation that involved the violation of U.S. anti-corruption laws, in particular the Foreign Corrupt Practices Act (FCPA).

According to the details disclosed, Telefónica Venezolana bribed government officials to secure their participation in an auction that allowed them to exchangeVenezuelan bolivars for U.S. dollars.

Nicole M. Argentieri, assistant attorney general at the Justice Department, explained that Telefonica's Venezuelan subsidiary obtained more than $110 million during that auction, representing more than 65% of the total funds allocated for telecommunications companies that year.

A portion of the funds obtained through the illegal scheme was allocated to finance a half-million-dollar vacation for one of the officials on the island of St. Barthelemy in the Caribbean. During his stay, additional purchases totaling $605,000 in luxury watches and jewelry were made for both the official and his partner.

The illicit payments were made through intermediaries who channeled the funds through bank accounts in the United States, in violation of international corruption regulations and the use of the U.S. financial system.

Corrective measures and cooperation

Under the deferred prosecution agreement(DPA), Telefónica Venezolana agreed to cooperate fully with U.S. authorities in any future investigation and to enhance its anti-corruption compliance program. Despite its cooperation, the company was also singled out for failing to identify and turn over all relevant information in the initial stages of the investigation, which affected the course of the investigation.

Telefónica Venezolana also implemented corrective measures, such as the dismissal of employees involved in the misconduct and the strengthening of its compliance department to prevent future incidents. In addition, the company agreed to improve its internal controls and conduct periodic audits.

Resolution in a global context

This case is in addition to other incidents involving other Telefónica subsidiaries, such as the case of Telefónica Brazil, which was also the subject of investigations for FCPA violations. The penalty of more than US$85 million was calculated following Department of Justice guidelines, and reflects a reduction due to the company's cooperation.