(Bloomberg) -- A $70,000 Patek Philippe wristwatch, a luxury bathroom remodeling, and at least a dozen bags of cash.

Those are just some of the bribes paid to win oil trading business in Ecuador, according to testimony heard in a Brooklyn courtroom over the past four weeks.

Commodity traders have a reputation for brown envelopes and backhanders that dates back at least to the days of Glencore Plc founder Marc Rich. But the trial of a former Vitol Group trader has provided an unprecedented window into brazen wrongdoing that continued even into the current decade.

Testimony from Nilsen Arias, the former head of international trading at Ecuador’s state oil company and Antonio and Enrique Pere, two brothers who handled the bribe payments, has shown just how widespread corruption was in the past 15 years — both among the world’s largest oil traders, and within Ecuador’s political elite.

Their accounts have implicated at least six international companies, including three of the world’s largest oil traders: Vitol, Gunvor Group and Trafigura Group. And they have accused numerous Ecuadorian officials of being on the take, ranging from staff in the state oil company through to the ministry of finance and the presidency.

At one point, Antonio Pere, the middleman who admitted to handling over $100 million in corrupt payments, was asked, “You’re not bribing the secretary general of the president, right?”

“I intended to do it, yes. I had previous meetings. That was the intention,” he replied.

Oil Playground

Ecuador is a mid-sized oil producer pumping about 500,000 barrels a day. But starting in about 2010, it became a playground for the world’s commodity traders. 

The cash-strapped government of Rafael Correa sought billions of dollars of oil-backed loans from state companies from China, Thailand and Oman. Behind them — according to the testimony — were often commodity traders manipulating the deals to their own advantage.

Arias, who was head of international trading at Petroecuador until mid-2017, testified that he was bribed by traders including Vitol, Gunvor, Trafigura, Noble Group, Petredec and Sargeant Marine. About 20 to 24 people were involved in the scheme, he said.

Several of the companies paid bribes via the Pere brothers, who had companies set up for the purpose in the British Virgin Islands and Panama — including one that was set up by Mossack Fonseca, the law firm made infamous by the Panama Papers leak.

Vitol and Sargeant Marine have admitted to paying bribes in Ecuador. Gunvor has disclosed a US investigation over bribery in Ecuador and booked a $650 million provision. A spokesperson for Trafigura said it was not a party to the case and would not comment; spokespeople for Noble and Petredec had no comment. 

Javier Aguilar, the former Vitol trader who is on trial for bribery and money-laundering, denies the government’s charges. He claims not to have known that the Peres were paying bribes to win business, and that he was framed by a superior at Vitol.

Gunvor Payments

The Peres testified to having received $97 million from Gunvor alone. After keeping a substantial cut for themselves, they used it to pay off numerous officials, including Arias, who said he received $13.5 million.

Included in that total was a $70,000 Patek Philippe watch, which Arias said was given to him by Antonio Pere on behalf of a Gunvor executive, and which was seized by the US government as evidence.

He also testified that Enrique Pere had paid a €120,000 bill to an interior decorator for a new marble floor and remodeling four bathrooms at his house in Portugal.

Some of the bribes to Arias and other officials in Ecuador were paid in cash, the Peres testified. Amounts ranging from $30,000 to $110,000 were handed over either by Enrique Pere personally or by a hired driver at hotels across Guayaquil, a port city on Ecuador’s Pacific Coast. 

Arias and the Peres recorded the progress of the different oil contracts they had worked on in spreadsheets that calculated the bribe monies paid and owing. For example, on a fuel oil contract for Vitol, the trading house would pay 25 cents a barrel to the Peres via an intermediary in Curacao.

At one point Antonio Pere was asked if he had ever helped a client with government business without paying a bribe to a government official.

“I’m not sure,” he replied. “I cannot recall one.”

The case is US v. Aguilar, 20-cr-390, US District Court, Eastern District of New York (Brooklyn).

--With assistance from Simon Casey.

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