Bribes From Brazil

Brazilian jet maker maker embraer admits to paying off Indian middlemen in a $200 million deal.

- Sandeep Unnithan

In the murky world of arms deals which thrives on stealth and shady wire transfers, the document filed before a US court probably came as a blast of bright, blinding sunshine. In a 59-page deferred prosecution agreement in the US district court in Florida on October 24, Brazilian aircraft manufacturer Embraer confessed it was guilty of paying bribes to bag aircraft contracts across the world.

The agreement, a copy of which is with India today, painstakingly details how Embraer paid $5.76 million in 2009 to an Indian arms agent identified in the document only as ‘Agent D’. The bribes were to swing a $200 million deal for the sale of three Embraer ERJ- 145 jets. These twin-engined aircraft were to be customised for India to fit an indigenous Airborne Early Warning and Control (AEW&C) radar.

The path to the doorstep of the US district court in Florida was a long one. It began in 2010 when US authorities suspected irregularities in the sale of aircraft by Embraer to the Dominican Republic. The allegations gathered steam in 2013 when the US Securities and Exchange Commission (SEC) first detailed kickbacks paid by the Sao Paulo-based aircraft manufacturer to bag contracts in several countries including India. The October 24 agreement essentially means that Embraer is free to carry on its business after paying the hefty $205 million in fines to US authorities. An October 24 statement released by the Sao Paulo-based aircraft conglomerate, expressed ‘deep regrets’ for its conduct, acknowledged responsibility for the conduct of its employees and agents according to the facts ascertained in the investigation.