The ‘Wolves Were Guarding the Sheep’ at Trafigura, Says Prosecutor

(Bloomberg) — Trafigura Group’s anti-corruption controls were compromised because senior executives dominated its compliance committee, Swiss prosecutors said, as they sought a four-year prison sentence for former chief operating officer Mike Wainwright. 

Between 2011 and 2019, the compliance body included Wainright and Trafigura’s late founder and chief executive officer, Claude Dauphin. Those executives had a vested interest in delivering bigger profits, rather than rejecting suspicious business leads, the prosecutors said on Monday.

The landmark bribery trial in the Swiss Federal Criminal Court in Bellinzona has shone a light on how Trafigura used companies set up by former employees as intermediaries around the world. That includes, as alleged in the Swiss case, bribing an Angolan official with more than $5 million in payments and cash gifts in return for lucrative oil contracts.

During a meeting of the company’s compliance committee, Dauphin explicitly requested that he and Wainwright would be involved in authorizing intermediaries for the oil division, said Heloise Rordorf-Braun, one of the two main Swiss prosecutors leading the case.  

“Put another way, the wolves were guarding the sheep barn,” said Rordorf-Braun. Bribery of foreign public officials wasn’t a one-off, “but a systemic component of Trafigura’s operations,” she said, as the trial entered a second week.

Swiss prosecutors are targeting Trafigura through a clause in the Swiss Criminal Code introduced in 2003 that allows them to indict a company if it didn’t take reasonable steps to prevent acts such as bribery or money laundering.

Trafigura has said that it’s compliance programs at the time were robust. The company’s lawyers will mount its defense later this week. The company — one of the world’s biggest traders of oil and metals — announced in 2019 that it would stop using intermediaries for developing new business.

The behavior of commodity traders has been in the crosshairs of global prosecutors for several years, but this month marks the first time that senior leadership of a major commodity trading house stands trial for bribery and corruption.

Dauphin, who died in 2015, is being made a scapegoat by the company he founded, a lawyer for his family has argued. Trafigura, on the other hand, said the indictment against it and Wainwright relies heavily on a former executive who testified against the trading house in exchange for a reduced sentence in a separate criminal case in Brazil. 

Wainwright stands accused of bribery along with a Swiss middleman Thierry Plojoux. Angolan official, Paulo Gouveia Junior is accused of taking the bribes. All three had a “decisive role” in the alleged corruption scheme, said the other Swiss prosecutor Gregoire Megevand.

All three men reject the charges. Under Swiss law, all defendants are considered innocent until a final judgment has been rendered.

Gouveia should be jailed for 54 months for “selling his integrity” to fuel a lifestyle that included more than $70,000 of spending on Dom Perignon champagne and other extravagances, Megevand said. Gouveia should also repay about $6.7 million to the state, he said. 

Plojoux should be sentenced to three years, partly suspended — a reduced term given he was the only defendant to show any remorse, the prosecutors recommended.

Megevand requested a jail term of four years for Wainright, less than the maximum possible sentence of five years for bribery. That was solely because the 15-year statute of limitations had passed for some of the period of 2009-2011, the prosecutor said.

“He could have stopped at any moment the bribery machine,” said Megevand. “Knowing perfectly well that he’d crossed the line, Mike Wainright took measures to be as discreet as possible.” 

All three men “used Switzerland as a refuge and exploited the fragile state of Angola,” and by their actions “perpetuated the culture of corruption without regards for the welfare” of the country, Megevand said. 

The prosecutors asked the court to impose on Trafigura a maximum possible fine of 5 million Swiss francs ($5.7 million), while acknowledging it amounted to “a drop of water in an ocean of profit.”

Trafigura should also pay back the $151 million it made from the oil and shipping deals, Megevand said. 

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