Fall of fugitive 'Batman' puts global oil trading on the spot

Sabrina Valle and Lucia Kassai, Bloomberg News on

Published in Business News

To his friends, Rodrigo Berkowitz lived within his means in a rented house in the suburbs of Houston.

The former oil trader for state-controlled producer Petroleo Brasileiro SA bought clothes in outlet malls and sent his two daughters to public school. For a family Christmas trip to Orlando, his plan was to drive the 960-mile route in their black Honda CR-V sport utility -- because it was crazy to spend on plane tickets, he said.

So they were shocked when the news broke in December that Brazilian federal police had issued arrest warrants for about 15 former oil traders and intermediaries. While some of the suspects had surfaced in previous corruption investigations in Brazil, this time a new name came up: Berkowitz.

Brazilian prosecutors said that the 39-year-old trader was among a group of former Petrobras employees accused of taking more than $31 million in bribes from intermediaries linked to some of the biggest commodity-trading firms in the world -- Glencore Plc, Vitol Group and Trafigura Ltd. -- between 2011 and 2014. In exchange, the firms were fed more contracts at discounted prices.

Digging into popular culture for code names, Berkowitz was "Batman" while one former boss used "Phil Collins" and another "Flipper," court documents show.

Carwash Scandal

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The investigation is an outgrowth of the long-running Carwash bribery scandal in Brazil, which has so far ensnared scores of local business leaders, including several Petrobras executives, and politicians, notably former President Luiz Inacio Lula da Silva.

Now, Berkowitz's case could potentially open a window into the opaque world of commodity trading, where firms buy and sell billions of dollars of raw materials and fossil fuels, often with little direct regulatory oversight. Brazilian police are seeking cooperation from authorities in the U.S., Switzerland, U.K., Bahamas and Uruguay, which could expose the firms to widespread scrutiny.

The U.S. Justice Department and Federal Bureau of Investigation have joined Brazil's investigation, and American authorities could open a probe of their own, Filipe Pace, head of the Carwash probe, said in an interview in Curitiba, Brazil. The Justice Department declined to comment on Petrobras.

"We think there's extensive evidence produced in Brazil for the U.S. to open a formal probe," Pace said. "We want whoever is proven to have committed a crime to be prosecuted, in Brazil or in the U.S."


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