Sessions Discloses Petrobras Bond Holdings as U.S. Probe Unfolds

  • Oil giant debt among assets declared by attorney general pick
  • Nominee says he’ll sell bonds of scandal-tainted Brazil firm

U.S. Senator Jeff Sessions, the nominee to head the Justice Department, declared that he owns thousands of dollars’ worth of bonds in the Brazilian state-owned oil company that the department’s prosecutors are investigating for suspected corruption, according to documents submitted to the Senate.

Sessions, who is appearing at his Judiciary Committee confirmation hearing on Tuesday, will sell off the bonds in Petroleo Brasileiro SA, which are worth between roughly $16,000 and $65,000, according to a Justice Department letter to the Office of Government Ethics. As attorney general under President-elect Donald Trump, Sessions would lead the federal department investigating bribery allegations against the company, known as Petrobras. It’s not clear how long he has owned the bonds.

Sessions also plans to sell his stakes in several mutual funds, including the Vanguard Health Care Fund. The Justice Department is investigating more than a dozen pharmaceuticals companies over drug pricing and is suing to block two multibillion-dollar mergers of health insurers.

QuickTake: Brazil Seeks a Way Back From Slump, Scandal, Turmoil

Sessions’ overall investments, worth as much as $9.4 million, are made up of mutual funds, most of them managed by Vanguard Group, and bonds issued by various counties and municipalities in his home state of Alabama, according to the disclosure of his holdings as of Nov. 21. His most valuable holding, worth between $1 million and $5 million, is a parcel of land in Choctaw County. The Petrobras bonds are the only debt securities he owns for an entity outside of the state, according to the disclosure.

The filings estimate the value of the Alabama senator’s holdings in ranges only, as is standard practice for federal disclosures.

Political Scandal

A Brazilian investigation into political corruption, which focused on alleged kickbacks paid to politicians orchestrated through Petrobras, led to the impeachment and removal of President Dilma Roussef last year.

Last month, Odebrecht SA, Latin America’s biggest construction company, and an affiliate agreed to pay more than $3.5 billion to resolve bribery allegations involving Petrobras, the largest corruption penalty ever levied by global authorities. The company admitted to paying officials of Petrobras to win contracts.

The conviction marked the first corporate resolutions in the U.S. stemming from a nearly three-year investigation of more than a dozen companies in the international corruption scandal known as Operation Carwash, which has helped plunge Brazil into recession.

In the U.S., the Justice Department and the Securities and Exchange Commission are conducting investigations of the Brazilian oil company.

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