On September 15, 2022, GOL Linha Aereas Inteligentes S.A. ("GOL"), one of Brazil's most prominent airlines, agreed to pay $41.5 million to resolve bribery investigations by DOJ, the SEC, and Brazilian authorities. These resolutions involved allegations that GOL executives bribed prominent Brazilian officials in exchange for the passage of two laws intended to benefit the airline industry.1

In another display of the "truly remarkable" cooperation between the United States and Brazil,2 this case reflects both countries' continued commitment to working together in enforcing their anti-corruption laws. DOJ's resolution, in particular, applied its guidance on calculating appropriate penalties and considering whether to impose monitorships. More broadly, while demonstrating the serious risks posed to companies by insufficient controls, the GOL resolutions exemplify how authorities currently factor cooperation and remediation into their enforcement decisions.

Background

As reported in its SEC filing on May 1, 2017, GOL received inquiries in 2016 from Brazilian tax authorities regarding payments to firms owned by politically exposed persons in Brazil. GOL retained U.S. and Brazilian counsel to conduct an independent investigation. In December 2016, GOL entered into a leniency agreement with the Brazilian Federal Public Ministry, avoiding criminal or civil charges and agreeing to pay a R$12 million fine and improve its compliance program. GOL also paid a R$4.2 million fine to the Brazilian tax authorities and agreed to notify relevant Brazilian and U.S. authorities about the investigation.3

According to the criminal information DOJ filed in the District of Maryland earlier in September 2022, GOL conspired to violate the FCPA's anti-bribery and books and records provisions. Specifically, between 2012 and 2013, GOL caused approximately $3.8 million in bribe payments to be made to certain Brazilian officials to secure the passage of two laws that lowered certain payroll and fuel taxes, financially benefiting GOL and other Brazilian airlines.4 According to Assistant Attorney General Kenneth A. Polite Jr., "the company entered into fraudulent contracts with thirdparty vendors for the purpose of generating and concealing the funds necessary to perpetrate this criminal conduct, and then falsely recorded the sham payments in their own books."5

The SEC similarly found that a GOL director committed to pay approximately $5.4 million in bribes to Brazilian politicians in order to ensure passage of legislation that financially benefitted GOL.6 According to the SEC, between October 2012 and 2013, GOL, through the GOL director, paid the equivalent of $1.14 million in bribes to a Brazilian official who helped ensure the inclusion of the air transport industry in legislation significantly lowering payroll taxes.7 These bribes were paid through at least two companies that the Brazilian official controlled and characterized as legitimate advertisement expenses.

As reflected in the SEC's order, GOL also paid almost $1 million in bribes to close associates of the Brazilian official and a company associated with a Brazilian legislator.8 GOL recorded all these payments as legitimate expenses for services, even though the services were never rendered. In 2013, GOL, through the GOL director, also paid $552,400 in bribes to a former Brasilia official who influenced the passage of legislation that lowered Brasilia's aviation fuel tax by more than half. GOL similarly recorded these payments as fees for services that were never rendered.9

"Anti-bribery violations need not involve payments to government officials in exchange for particular commercial opportunities or the approval of business licenses or permits, for example. Here, GOL paid officials to exert legislative influence in a way that financially benefited the company."

These two new laws saved GOL almost $52 million: approximately $39.7 million in 2013 as a result of the payroll law and approximately $12.24 million from lower aviation fuel taxes.10

In addition to bribery charges, the SEC found that GOL failed to devise and maintain an adequate system of internal accounting controls. These insufficient internal controls resulted in payments to vendors involved in this bribe scheme even though most of the vendor's purported services were never rendered. Moreover, the vendor procurement process did not have an effective review process and instead relied primarily on the GOL director for authorization and verification of services rendered.11

Footnotes

1. See Deferred Prosecution Agreement, United States v. Gol Linhas Aereas Inteligents S.A.S v. GOL, No. 22-cr-325-PJM (D. Md. Sept. 15, 2022), https://www.justice.gov/criminal-fraud/file/1535366/ download ["GOL DPA"]; Order, In re Gol Linhas Aereas Inteligentes S.A., Securities Exchange Act Release No. 95800 (Sept. 15, 2022), https://www.sec.gov/litigation/admin/2022/34-95800.pdf ["GOL Order"]; CGU Press Release, CGU e AGU Celebram Acordo de Leniencia de R$14 Milhoes com a Empresa GOL Linhas Aereas Inteligentes S.A. (Sept. 15, 2022) https://www.gov.br/cgu/pt-br/ assuntos/noticias/2022-periodo-eleitoral/cgu-e-agu-celebram-acordo-de-leniencia-de-r-14- milhoes-com-a-empresa-gol-linhas-aereas-inteligentes-s-a.

2. Ana de Liz, "DOJ prosecutor hails 'truly remarkable' relationship with Brazilian authorities," GIR (Oct. 26, 2022), https://globalinvestigationsreview.com/just-anti-corruption/article/doj-prosecutor-hails-truly-remarkable-relationship-brazilian-authorities.

3. GOL Linhas Aereas Inteligentes S.A., Annual Report (Form 20-F) (May 1, 2017), at 82.

4. Information ¶ 16, United States v. Gol Linhas Aereas Inteligents S.A.S v. GOL, No. 22-cr-325-PJM (D. Md. Sept. 9, 2022), https://www.justice.gov/criminal-fraud/file/1535361/download.

5. DOJ Press Release, GOL Linhas Aéreas Inteligentes S.A. Will Pay Over $41 Million in Resolution of Foreign Bribery Investigations in the United States and Brazil (Sept. 15, 2022), https://www.justice.gov/opa/pr/gol-linhas-reas-inteligentes-sa-will-pay-over-41-millionresolution-foreign-bribery ["DOJ Press Release on GOL"].

6. See GOL Order ¶ 2

7. Id. ¶ 4.

8. Id. ¶ 5.

9. Id. ¶¶ 7,8.

10. Id. ¶¶ 6, 8.

11. Id. ¶ 12.

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