WASHINGTON (AP) — Spain’s largest telecommunications operator will pay more than $85 million to resolve a U.S. Justice Department investigation into a scheme to bribe Venezuelan officials with a lavish Caribbean vacation and expensive watches.
The agreement with Telefónica S.A. announced Friday is the second time that the telco giant has faced bribery accusations in the U.
S. after it was ordered in 2019 to pay a $4.1 million penalty to the Securities and Exchange Commission for providing tickets to the FIFA World Cup for foreign officials it was seeking to influence.
The latest bribery scheme started around 2014, when a subsidiary of Telefónica bribed two Venezuelan officials to participate in an auction that allowed it to get U.S. dollars in exchange for Venezuelan bolivars, Justice Department officials said.
Telefónica’s Venezuelan subsidiary bought equipment at inflated prices from unnamed multinational equipment suppliers, who through intermediaries then paid the bribes on its behalf in an attempt to hide the illegal scheme, prosecutors said. In exchange, Telefónica received over $110 million in currency auctions that were then the only way for foreign companies to get around strict foreign exchange controls designed to curb capital flight and repatriate earnings in bolivars decimated by years of triple-digit inflation. The amount represented about 65% of the $172 million awarded to telecommunications companies that year, prosecutors said in court filings in.
