Brazilian companies face heavy fines with new corruption law

February 18, 2014

Joe Leahy – The Financial Times, 2/18/2014

The period before Brazil’s annual carnival in late February is normally short of news. But this month, the nation’s media has been buzzing with the case of a man who fled the country after being convicted in Brazil’s biggest corruption case.

Henrique Pizzolato, the former marketing director of Banco do Brasil, the state-controlled bank, was allegedly found living in his nephew’s apartment in Maranello, Italy, by Italian police and is facing possible extradition.

He disappeared from Brazil last year after being sentenced to more than 12 years jail for his role in the Mensalão case, in which some of the nation’s most senior politicians were found guilty of vote-buying in Congress using public money.

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U.S. tries to repair relationship with Brazil

December 16, 2013

Mimi Whitefield – The Miami Herald, 12/13/2013

Despite pique in some exile circles when President Barack Obama shook hands earlier this week with Cuban President Raúl Castro, a top U.S. diplomat for the Americas said Friday that she was watching his greeting of another president more closely.

The handshake drama took place on Tuesday at a memorial service for Nelson Mandela in Johannesburg. On his way to the rostrum, Obama had to navigate past not only Castro but also Brazilian President Dilma Rousseff. She has been on prickly terms with Washington since revelations earlier this year that the National Security Agency had monitored her emails and conversations.

“The whole world was clearly looking at the greeting for Raúl Castro, but I was much more interested in who was standing next to Raúl Castro and what the greeting was going to be like with Dilma Rousseff,’’ said Assistant Secretary of State for Western Hemisphere Affairs Roberta Jacobson during a meeting Friday with reporters and editors from the Miami Herald and El Nuevo Herald.

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Brazil to investigate ex-president Lula in vote-buying scandal

April 8, 2013

Reuters, 04/06/2013

Brazilian federal prosecutor has opened an investigation into allegations that former President Luiz Inacio Lula da Silva was involved in a vote-buying scheme in Congress that led to the conviction of close aides for corruption.

The federal prosecutor’s office said in a statement late on Friday it asked the federal police to probe accusations of a businessman at the centre of the corruption case, Marcos Valerio, who alleged that Lula not only knew about the illegal scheme but received money from it.

Lula has repeatedly denied the allegations that he knew of the vote-buying scandal known as the “mensalão,” under which operatives from the ruling Workers’ Party paid lawmakers in Congress to back the government’s legislative agenda. The scandal, which erupted in 2005, almost brought down Lula’s government at the time and led to the biggest political corruption trial in Brazilian history.

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Brazil: prosecutor to analyze testimony by suspect about former president

January 10, 2013

Simon Romero – The New York Times, 01/09/2013

The prosecutor general, Roberto Gurgel, said Wednesday that he would analyze testimony in which a businessman convicted in an embezzlement and vote-buying scheme tied Brazil’s former president, Luiz Inácio Lula da Silva, to the scandal.

The businessman, Marcos Valério de Souza, received a 40-year sentence in October after he was found to have operated much of the scheme, the mensalão, or “big monthly allowance,” named after payments received by legislators.

The Supreme Court’s trial of suspects in the scheme resulted in the conviction of senior figures, including Mr. da Silva’s former chief of staff, who was sentenced to nearly 11 years in prison. In testimony, Mr. de Souza said he deposited funds in 2003 for Mr. da Silva’s “personal spending,” in an account controlled by another aide to the former president. After Mr. de Souza’s assertion, Mr. da Silva said he could not “respond to a lie.” Mr. Gurgel said no decision had been made on a formal investigation.

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Dilma faces mounting difficulties

January 3, 2013

The Economist, 12/13/2012

The administration of President Dilma Rousseff and the ruling Partido dos Trabalhadores (PT) have been put on the defensive following a new corruption scandal as well as recent fall-out from the largest corruption trial in Brazilian history, known as the mensalão (“big monthly stipend”), in which several PT officials have been sentenced to prison by the Supreme Court. Moreover, Brazil’s economy is struggling to recover from a slowdown that began in 2011, despite the government’s stimulus measures. Even though unemployment is at historically low levels, these developments threaten to erode Ms Rousseff’s popularity and complicate the political scene in 2013.

Political rivals from allied parties and the opposition also have begun to stir. In addition, the president faces a mobilisation of political forces in Congress which are opposed to her recent veto of parts of a controversial oil royalties bill. All this points to a more fluid political environment than previously expected in 2013, when Ms Rousseff will be preparing the ground for a re-election bid at the October 2014 elections.

In the latest corruption case, a federal police investigation code-named Porto Seguro has led to arrests and the indictment of several government officials, including the head of the president’s office in the state of São Paulo, Rosemary Nóvoa de Noronha; the deputy attorney-general, José Weber Holanda; and brothers Paulo Vieira and Rubens Vieira , who were political appointees at Brazil’s water and aviation regulatory agencies, respectively.

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Calls for an investigation into Brazil’s ex-leader

December 13, 2012

Bradley Brooks – AP, 12/13/2012

Pressure is growing for prosecutors to open an investigation into popular former President Luiz Inacio Lula da Silva amid new accusations he knew about a cash-for-votes in Congress scheme that has seen convictions of 25 people, including his one-time chief of staff.

Silva, who left office in 2010 with an 87 percent approval rating and was once called “the most popular politician on Earth” by President Barack Obama, has so far dodged accusations against him. He denies any wrongdoing in what is seen as the biggest corruption case in Brazil’s history.

But now newspaper editorials, opposition politicians and some average Brazilian voters are saying they want to see the Attorney General’s Office order an investigation into allegations made by a top figure in the corruption case that Silva approved of the scheme and used cash from it while in office.

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Corruption scandal nears Brazil’s popular ex-president as calls of probe into his role rise

December 13, 2012

AP/Fox News, 12/13/2012

Pressure is growing for prosecutors to open an investigation into popular former President Luiz Inacio Lula da Silva amid new accusations he knew about a cash-for-votes in Congress scheme that has seen convictions of 25 people, including his one-time chief of staff.

Silva, who left office in 2010 with an 87 percent approval rating and was once called “the most popular politician on Earth” by President Barack Obama, has so far dodged accusations against him. He denies any wrongdoing in what is seen as the biggest corruption case in Brazil’s history.

But now newspaper editorials, opposition politicians and some average Brazilian voters are saying they want to see the Attorney General’s Office order an investigation into allegations made by a top figure in the corruption case that Silva approved of the scheme and used cash from it while in office.

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Report: Brazil’s Silva knew of cash-for votes scam

December 12, 2012

AP/ABC News, 12/11/2012

A Brazilian newspaper says it had access to a businessman’s testimony linking the nation’s popular former president to a massive cash-for-votes corruption scheme.

Brazil’s top court found 25 people guilty in a landmark trial that ended recently. While top aides of former President Luiz Inacio Lula da Silva were found guilty, Silva himself was never implicated.

The Estado de S. Paulo newspaper reports Tuesday that businessman Marcos Valerio, a key figure in the case, sought out prosecutors and gave them the testimony in September, after he was already found guilty. He was later sentenced to 40 years in prison.

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Brazil’s Lula knew about vote buying scheme – newspaper

December 11, 2012

Reuters, 12/11/2012

Former Brazilian President Luiz Inacio Lula da Silva knew about and used funds from a far-reaching vote-buying scheme to pay for personal expenses, according to testimony by a convicted former consultant to the ruling Workers’ Party.

The testimony, reported on Tuesday by the Estado de S.Paulo newspaper, was given in September to Brazil’s attorney general’s office by Marcos Valerio, an advertising executive recently convicted as a bagman in the scheme.

Valerio also testified that an aide to the former president made veiled threats when the scandal erupted in efforts to keep him quiet, the newspaper said.

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A blow against impunity

November 15, 2012

H.J. – The Economist, 11/15/2012

Brazil’s mensalão trial has brought many historic moments (see here and here), and this week saw one more: an impeccably well-connected politico getting such a long prison sentence that even the best lawyer will struggle to save him from doing time. On November 12th José Dirceu, who served as chief of staff for former president Luiz Inácio Lula da Silva from 2003 to 2005, was sentenced to ten years and ten months in jail for his part in the huge vote-buying scheme. Two other prominent members of the Workers’ Party (PT) also received stiff sentences: Delubio Soares, its former treasurer, got eight years and 11 months in prison, and José Genoino, its former president, six years and 11 months.

It sometimes appears that the Brazilian criminal-justice system locks people up on a whim. Half the prison population has either not yet been tried or is awaiting a final verdict, and much of the other half committed non-violent property or drugs crimes. But for those with resources, it allows huge scope for delay, leeway on sentencing and almost unlimited appeals. The three men, along with the other 22 who have been found guilty of crimes such as money-laundering, corruption, embezzlement and misuse of public money, benefited from a rule known as “privileged forum” which says that top politicians can only be tried for crimes in higher courts. In this case, the Supreme Court, which normally deals with constitutional, not criminal matters, had to decide to take the case. That meant that though the scandal surfaced in 2005, the trial only started this year, in August.

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