SAO PAULO/WASHINGTON, May 19 (Reuters) - The brothers whose deft dealmaking helped build JBS SA into the world’s No. 1 meat processor are testing that talent like never before as they seek a leniency deal with prosecutors after admitting to paying millions of dollars in bribes to Brazilian politicians.
JBS and its controlling shareholder J&F Investimentos, a sprawling conglomerate led by billionaires Joesley and Wesley Batista, are pressuring prosecutors to accept what would likely be the most lenient of all the plea deals negotiated during a three-year old corruption investigation that has implicated scores of Brazilian politicians and executives.
JBS Chairman Joesley Batista this week set off a political firestorm by revealing that he had taped a conversation with Michel Temer in March in which the Brazilian president seemed to assent to bribing a jailed lawmaker. Temer has denied any wrongdoing and has said he will not resign.
Batista later signed a plea agreement with prosecutors in which he acknowledged distributing payments to some 2,000 politicians over the last 10 years.
The 44-year old led the company’s rapid expansion through U.S. acquisitions Swift Foods and Pilgrim’s Pride Corp, deals financed with the help of 8.1 billion reais ($2.49 billion) from state development bank BNDES.
Batista admitted to paying $30 million to former President Dilma Rousseff in return for loans from the state banks.
Batista and his older brother Wesley will be personally responsible for paying fines of 110 million reais each, prosecutors say, but will get no jail time.
At the same time, a battle is brewing over how big a fine the group will pay, with prosecutors seeking 11.2 billion reais ($3.44 billion) over 10 years, equivalent to 5.8 percent of the group’s total revenue last year, the prosecutors said in a statement.
J&F proposed a much smaller 1 billion reais, which would be around 0.5 percent of the group’s total revenue last year, the prosecutors added, warning that the leniency agreement with the group would be immediately suspended if the company did not agree to the $3.4 billion fine by midnight on Friday.
That fine would still be smaller than the $3.6 billion penalty agreed this year with construction conglomerate Odebrecht SA and its petrochemical unit Braskem SA, implicated in a separate arm of the corruption investigation.
Marcelo Odebrecht, the former CEO of his own family’s eponymous company, remains in jail over a year after prosecutors first leveled charges against him and despite the fact that he also signed a plea deal.
According to a report by newspaper O Globo, the Batista brothers have also hired a law firm to negotiate a deal with the U.S. Department of Justice.
Jason Linder, a prosecutor in the department’s anti-bribery unit until earlier this month, said the penalty against the executives appeared lenient compared to others sought by Brazilian authorities.
Brazilian prosecutors are bringing 10 Embraer executives to trial on bribery charges that could result in long sentences, said Linder, who led the parallel U.S. case against the aerospace company.
Linder also pointed to the 19-year prison sentence for Marcelo Odebrecht, handed down by a Brazilian judge.
“The fact that they are paying money and not facing jail time strikes me as more lenient,” he said. “It could be because of the level of cooperation with prosecutors, the size and scope of the misconduct or the quality and strength of the available evidence.”
Brazil’s federal public prosecutor’s office said in an emailed statement to Reuters that the Batistas’ treatment, with no jail time, was justified by the quality and timeliness of the evidence they brought to the investigation.
Some investors interested in a planned initial public offering by JBS’s global meat processing unit voiced support for less harsh penalties. Like people close to the Batistas, they praised Joesley Batista’s willingness to wear a wire and record incriminating statements by Temer and others.
“He voluntarily gave prosecutors evidence against a sitting president”, said one investor, who spoke on the condition of anonymity due to the sensitivity of the matter.
The Odebrechts, by contrast, only cooperated after family scion Marcelo Odebrecht had been in jail for a year and prosecutors had uncovered a bribe department within the conglomerate.
In a statement on Thursday, Joesley Batista stressed that his companies had never bribed officials in countries other than Brazil. Odebrecht has admitted to bribing government officials in 12 countries. ($1 = 3.2590 reais) (Writing by Christian Plumb; Editing by Daniel Flynn and Mary Milliken)