Glencore says it’s a changed company and is cooperating with prosecutors. It reserved a $216 million charge in the first half of the year for costs related to a specific element of several investigations it is facing.
Gary Nagle, Glencore’s new chief executive, told reporters on a conference call in August that the company has adopted new compliance rules intended to eliminate illicit conduct, and that every person mentioned in Stimler’s case has been disciplined or left the firm. The company is also reducing its business in high-risk jurisdictions, and no longer works with middlemen.
“We don’t have any intermediaries in our oil business,” Nagle said. “It’s a different business model to what we used five to 10 years ago. We don’t plan to use them again in our oil business.”
Glencore makes billions of dollars every year buying and selling commodities — above the money it makes digging metals, pumping crude or harvesting crops. In 2020, the company enjoyed its best trading ever, making $3.3 billion in earnings before interest and taxes, up 41% from the previous year despite the impact of Covid-19 on the global economy.
Stimler’s guilty plea and the deal he cut with prosecutors will rattle fellow colleagues – and the company itself – as the Justice Department investigation continues.
The cooperation agreement requires him to disclose his and all his colleagues’ activities relevant to the case, and agree to testify before a grand jury for the investigation and even serve as a government witness should any cases go to trial. He appeared by videoconference from the U.K. during his plea hearing, during which he told Judge Kevin Castel of Manhattan federal court that he’d been assisting the Justice Department for more than two years.
Stimler has implicated seven others, including at least four Glencore traders, in making bribe payments, and authorities say the scheme started before him. One person named was a top African oil trader at Glencore dating back to the 1990s, Stimler’s superior during his early rise there, according to people familiar with the matter; another worked with him on the West African oil trading during the latter part of the scheme, the people said.
While Stimler began bribing in 2007, often using coded language in emails, the payments appear to have accelerated during Madueke’s time in office, according to the court documents. Stimler agreed in late 2013 to pay more than triple the usual fees to an intermediary company that would be passed on as bribes for favorable grades and loading dates of Nigerian oil, his guilty plea says. Three months later, he and a colleague made another $500,000 payment to be eligible for additional Nigerian cargoes. Stimler “requested and received approval” for a Glencore subsidiary to make the payment, prosecutors said, without specifying who granted it.
Later that fall, he received another request, saying Foreign Official 1 was seeking $300,000 per month from customers of Nigeria’s national oil company, in connection with an upcoming election. Stimler authorized the payment, according to prosecutors.
Madueke left office in 2015 and has been living in London. She has been charged with corruption by Nigerian authorities but has so far successfully evaded extradition, and she is under investigation by U.K. authorities as well. The yacht, the Galactica Star, has since been auctioned off. Its new owner is a shell company called Paxford Ltd., and it has been renamed Illusion. It was last seen docked on the coast of Sardinia, according to Bloomberg ship tracking data.
In May, Nigeria’s national oil company released its new list of trading partners for the coming year, coveted contracts to buy its oil and sell it refined gasoline. Glencore was not among them.