Summary

I. INTRODUCTION

In 2014, a Brazilian criminal investigation popularly known as Operation Lava Jato (or "Operation Car Wash") began to uncover a massive political and corporate corruption scheme with Defendant Petróleo Brasileiro S.A. ("Petrobras") at its center. The investigation revealed a longstanding practice at Petrobras of soliciting and accepting bribes in exchange for construction and services contracts, with graft payments shared among Petrobras executives, Brazil's then- governing political party, the Workers' Party, and its members. Several high-ranking Petrobras executives and government officials were prosecuted in Brazil and incarcerated as a result of the investigation, which continued until 2021. The fallout reached the United States, too. Facing criminal and civil liability as a registrant on the New York Stock Exchange, Petrobras entered into a deferred prosecution agreement with the U.S. Department of Justice and a civil settlement with the U.S. Securities and Exchange Commission. As part of the agreement, Petrobras agreed to pay hundreds of millions of dollars in criminal penalties to both U.S. and Brazilian enforcement authorities.

One of the entities entangled in the complex web of corruption exposed by Operation Lava Jato was Sete Brasil Participações ("Sete"). After the discovery of oil reserves off the coast of Brazil, Petrobras established Sete as a financing vehicle to construct a fleet of drillships that Petrobras would then charter to develop the newly discovered oil reserves. As the plan for Sete developed, so too did the plan to export the existing bribery and kickback scheme from Petrobras to Sete. Three former Petrobras officials--João Carlos de Medeiros Ferraz, Pedro José Barusco Filho, and Eduardo Costa Vaz Musa--moved over to Sete as executive officers. They then solicited bribes from various shipyards in exchange for drillship construction contracts. The illicit proceeds were split amongst Ferraz, Barusco, and Musa; current Petrobras executives; and the Workers' Party and its officials.

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V. CONCLUSION

For the foregoing reasons, EIG's motion for summary judgment is granted as to its fraud and aiding-and-abetting claims as to liability but not damages. Petrobras's motion for summary judgment is denied. The court reserves ruling on EIG's Daubert motion and Petrobras's motion to strike as to Moroux and denies as moot Petrobras's motion to strike as to Tucci.

The parties shall appear for a remote status conference on August 23, 2022, at 11:30 a.m.

The parties shall be prepared to discuss a schedule for further proceedings.