WASHINGTON – Spain’s largest telecommunications operator will pay more than $85 million to settle a U.S. Justice Department investigation into a scheme to bribe Venezuelan officials with lavish Caribbean vacations and expensive watches.

The agreement with Telefónica SA announced on Friday is the second that the telecommunications giant faced bribery accusations in the US. after he was ordered in 2019 to pay a $4.1 million fine to the Securities and Exchange Commission for providing FIFA World Cup tickets to foreign officials he was trying to influence.

The latest bribery scheme began around 2014, when a Telefónica affiliate bribed two Venezuelan officials to participate in an auction that allowed it to obtain U.S. dollars in exchange for Venezuelan bolivars, Justice Department officials said.

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Telefónica’s Venezuelan subsidiary purchased equipment at inflated prices from unnamed multinational equipment suppliers, who through intermediaries then paid the bribes on its behalf in an attempt to conceal the illegal scheme, prosecutors said.

In exchange, Telefónica received more than $110 million in currency auctions, which were then the only way for foreign companies to avoid strict exchange controls designed to stop capital flight and repatriate profits in bolivars decimated by years of inflation. three digits. The amount represented about 65% of the $172 million awarded to telecommunications companies that year, prosecutors said in court papers in Manhattan.

“Telefónica Venezolana chose to support a corrupt regime to circumvent the difficulties of conducting legal business in Venezuela,” said Principal Deputy Attorney General Nicole Argentieri, who heads the Justice Department’s Criminal Division.

According to court records, a senior Telefónica executive was summoned to a meeting in May 2014 in which two anonymous officials informed him that Telefónica would have to pay a “commission” on the funds awarded in the currency auction.

Part of the proceeds from the scheme were used to finance a $500,000 vacation for one of the officials in St. Barthelemy in the French-speaking Caribbean. While there, another $605,000 was spent on luxury watches and jewelry for the official and his spouse.

The affiliate is charged in US federal court with conspiracy to violate the Foreign Corrupt Practices Act, but will avoid prosecution under an agreement with the Justice Department if it meets certain conditions.

Telefónica has been operating for two decades in Venezuela, under the Movistar brand, one of the 12 countries, most of them in Latin America, where it has a presence. It currently has 8 million wireless customers in the country.

Telefónica SA officials did not immediately respond to an email seeking comment on Friday.

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AP writer Joshua Goodman in Miami contributed to this report.