Hines involved in Brazil inquiry
The Houston-based Hines real estate firm has been linked to a corruption scandal involving Brazilian state-run oil company Petroleo Brasileiro, or Petrobras.
Hines told the Chronicle Tuesday it is conducting an internal review of certain real estate transactions following a report that appeared over the summer alleging improper payments by Hines Brazil in relation to commissions for Petrobras office leases in Rio de Janeiro.
The report was in Brazilian newspaper O Globo in July.
Hines said it “will cooperate with any investigation that may ensue,” but it did not believe the company is currently under investigation by authorities.
“Hines has reached out to the relevant authorities to share what we have learned to date; and we are committed to fully cooperating with them. We have also initiated a comprehensive review of our internal controls and protocols in order to make enhancements as appropriate,” vice chairman and chief investment officer Hasty Johnson said in a letter to investors last week that was provided to the Chroni-
cle on Tuesday.
Doug Munro, head of the Hines office in Brazil and an 18year employee, has resigned from the firm and the company said it is searching for a replacement. An interim leadership team has taken over operations.
Kickback investigation
The Houston development firm, founded in 1957 by Gerald D. Hines, has built some of Houston’s most architecturally significant office towers, including Pennzoil Place, Bank of America Center and Williams Tower. Its reach, however, has been global. Hines has a presence in 19 countries.
The Petrobras leases under review took place between 2004 and 2009 for space in the Torre Almirante office building in downtown Rio de Janeiro.
The 36-story tower was constructed in 2003 and opened a year later with Petrobras as its sole tenant.
The embattled Brazilian oil company has been in the middle of a massive kickback investigation in its home country.
Dozens of people have been convicted on charges including corruption and money laundering.
This week, the Chronicle reported that Brazilian officials are investigating allegations the oil company overpaid hundreds of millions of dollars for a refinery in Pasadena.
“Petrobras informs that there is an Internal Commission of Inquiry in progress,” a company spokesperson from Brazil said Tuesday in an email seeking comment about the Hines matter.
‘Zero tolerance’
A Brazilian prosecutor could not be reached.
In his letter to company investors, Hines’ Johnson further commented: “There is zero tolerance at Hines for unethical conduct or anything not fully compliant with applicable company policies and laws.”