Telefónica Venezolana to Shell Out $85 Million to Settle U.S. Bribery Probe Amid Venezuelan Currency Scandal

Venezuela’s Telefónica Venezolana—a subsidiary of Spanish telecom giant Telefónica S.A.—has agreed to pay over $85 million to resolve allegations of bribery. The telecom firm admitted to a scheme involving payments to Venezuelan officials to gain preferential access to U.S. dollars through a government currency auction, a critical exchange in a nation with tight foreign currency controls. This DOJ settlement spotlights not only the costs of corporate corruption but also the lengths companies sometimes go to work around challenging market conditions in places like Venezuela.

In a deferred prosecution agreement (DPA) filed in New York federal court, Telefónica Venezolana conceded to making about $28.9 million in payments to intermediaries who, in turn, bribed Venezuelan government officials. The arrangement enabled the company to exchange Venezuelan bolivars for more than $110 million in U.S. currency—over 65% of the funds available through the government’s 2014 auction. The price of these exchanges? Inflated equipment purchases from suppliers who acted as conduits for the bribes, a practice that DOJ officials called “complex and criminal.”

Nicole M. Argentieri, Principal Deputy Assistant Attorney General overseeing the DOJ’s Criminal Division, didn’t mince words: “Telefónica Venezolana chose to support a corrupt regime to circumvent the difficulties of conducting legal business in Venezuela.” Argentieri stressed the DOJ’s zero-tolerance approach to companies that undermine U.S. anti-bribery laws to work around local challenges in foreign markets.

Further underscoring the DOJ’s crackdown on cross-border corruption, U.S. Attorney Damian Williams of New York made clear his office’s determination to guard the integrity of the U.S. financial system. Bribe payments allegedly passed through U.S.-based banks, highlighting the misuse of American institutions in schemes that perpetuate foreign government corruption.

But resolving this case is only part of Telefónica Venezolana’s work ahead. Under the DPA, the company must not only pay the fine but also transform its compliance landscape. It’s implementing strict new anti-bribery controls, enhancing its internal oversight, and overhauling its high-risk transaction review processes. Among the steps Telefónica Venezolana is taking are creating an empowered compliance function with direct access to the Board, requiring more comprehensive approvals for non-standard transactions, and installing tighter controls around third-party interactions.

The DOJ acknowledged Telefónica Venezolana’s cooperation in navigating the case, praising the company for producing documents and making non-U.S.-based employees available for interviews. However, DOJ officials noted that in the early stages of the investigation, Telefónica Venezolana delayed some disclosures, affecting its level of cooperation credit and reducing its potential penalties. In a similar past FCPA matter, the DOJ took into account a 2019 settlement involving Telefónica’s Brazilian unit, underscoring the agency’s broader scrutiny of Telefónica’s global operations.

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