Telefónica Settles $85M Bribery Case with DOJ over Venezuelan Currency Scheme

Telefónica S.A. Agrees to $85 Million Settlement in Venezuelan Bribery Case

Spain’s largest telecommunications operator, Telefónica S.A., has reached an $85 million settlement with the U.S. Justice Department over a bribery scheme involving Venezuelan officials. This agreement comes four years after the company faced similar accusations in 2019.

The bribery scheme, which began around 2014, involved a Telefónica subsidiary bribing two Venezuelan officials to participate in currency auctions. The company allegedly purchased equipment at inflated prices and used intermediaries to funnel bribes to the officials. As a result, Telefónica gained over $110 million from these currency auctions.

The currency auction system in Venezuela was crucial for foreign companies operating in the country, allowing them to exchange local currency for U.S. dollars. Telefónica’s significant share of the awarded currency raised suspicions about the fairness of the process.

U.S. Justice Department officials stated that the bribery scheme funded lavish expenditures, including luxury vehicles and high-end real estate purchases. The department emphasized the importance of holding companies accountable for corrupt practices that undermine fair competition and economic stability.

As part of the legal proceedings, Telefónica’s Venezuelan subsidiary has been charged with conspiracy to violate the Foreign Corrupt Practices Act. The subsidiary can avoid prosecution if it meets certain conditions set by the Justice Department.

Telefónica S.A. maintains a significant presence in the Venezuelan market, despite the challenging economic conditions in the country. The company has not yet provided an immediate response to the settlement announcement.

This case highlights the ongoing efforts by U.S. authorities to combat international corruption and enforce compliance with anti-bribery laws among multinational corporations operating in high-risk markets.