Interpublic Group has agreed to pay a $13 million fine to settle charges in Brazil related to a bribery scheme that two IPG shops — Borghi/Lowe and FCB Brasil — were involved in.
Brazilian authorities uncovered the scheme last year as they investigated a wide-scale price-fixing and bribery scandal involving state-controlled oil company Petrobras and a number of politicians. The illicit activity is said to have occurred over an eight-year period, between 2004 and 2012.
Last December, IPG, which indicated it has cooperated with Brazil throughout the probe, dismissed Ricardo Hoffmann, then managing director of Borghi/Lowe, for allegedly arranging bribes to a government official that were reportedly funneled through Petrobras advertising contracts.
The payments were designed to help the agencies retain contracts it had with the government.
Hoffmann was arrested earlier this year and has since cooperated with authorities in exchange for a reduced sentence according to reports.
IPG issued this statement: “An agreement between our local agencies and federal prosecutors in Brazil is related to a former employee that our company identified as having acted in a manner that was inappropriate and violated our code of conduct. We have cooperated with the authorities throughout the process and will continue in our efforts to reach an agreement with all governmental agencies in the local market.”
Word of the settlement agreement, which still has to be finalized, was reported by Brazil’s Media & Message.
On Friday, Reuters reported that the Brazilian congressional panel overseeing the corruption investigation concluded that suppliers and “rogue employees” were responsible for the graft, rather than politicians or the company and its top executives.