Brazil’s crusading corruption investigation is winding down

Sabrina Valle and Jessica Brice – Bloomberg, 05/04/2016

The crusading federal judge behind Brazil’s explosive corruption investigation, facing the limits of his mandate and signs of political pushback, sees his role in the case winding down by the end of the year, a turning point in a probe that has helped push the president to the brink of impeachment.

For more than two years, Judge Sergio Moro and his team of prosecutors and police in the southern town of Curitiba have tracked the $1.8-billion graft scandal across four continents. They uncovered a crime ring so epic that it shattered Brazil’s political and economic leadership and helped tip the nation into its worst recession in a century.

Now, legal challenges are chipping away at Moro’s jurisdiction over executives amid criticism that he’s over-reaching. Brazilian law also bars him from going after sitting politicians accused of graft. So he expects significantly fewer new operations under his watch starting next year, according to three top officials who asked not to be named relaying details from private conversations. The press-shy judge declined to comment.

Read More…

 

 

Petrobras boomtown turns desolate as refinery’s billions vanish

Sabrina Valle and Carlos Caminada – Yahoo Business, 05/04/2016

Located just 30 miles east of Rio de Janeiro’s bustling Copacabana beach, Itaborai looks like many oil boomtowns after the bust — except the deserted stores and empty glass towers that loom over this town of 220,000 speak of some bigger cataclysm than the collapse of crude prices.

“They said this would be the new oil city,” says Jefferson Costa, one of scores of migrants from Brazil’s impoverished north lured here by a multibillion-dollar petrochemical project that was supposed to create more than 100,000 jobs. Work on the complex, known as Comperj, has stopped, and unless new investors materialize, the single refinery now standing may never produce a single drop of fuel. “It’s empty inside,” says Costa, a plumber who lost his job six months ago when construction came to a halt. “People say it will become a large warehouse.”

Comperj has become a symbol of pervasive corruption at Brazil’s state-run oil producer, Petrobras. A sprawling investigation by federal police and prosecutors dubbed Operation Carwash has revealed massive graft, implicating construction conglomerates, banks, oil service providers, shipbuilders and politicians. About 2 percentage points of the 3.8 percent contraction in Brazil’s gross domestic product last year can be attributed to the effects of the scandal on the company and its suppliers, according to estimates from Tendencias, a consulting firm based in Sao Paulo.

Read More…

 

Populist policies let Brazil’s tomorrow slip away

Eduardo Porter – The New York Times, 05/03/3016

Not too long ago, Brazilians might have been counted as the most optimistic people in the world. From 2008 to 2013, as the United States and Europe grappled with the aftermath of a crisis wrought by blind trust in unfettered finance, Brazil’s income per person grew 12 percent after inflation. Wages soared. The poverty rate plummeted. Even income inequality narrowed.

Brazil remained only a high-middle-income country, in the technospeak of the International Monetary Fund. But for the first time in forever, the eternal “country of tomorrow,” as Brazilians often ruefully described their nation, saw itself instead as a rampant member of the emerging cohort ofBRICS (Brazil, Russia, India, China and South Africa) — maybe even closer than China to making the jump into the ranks of the world’s richest nations.

And then it didn’t happen.

Read More…

Brazilian judge lifts suspension of WhatsApp

Vinod Sreeharsha – The New York Times, 05/03/2016

RIO DE JANEIRO — A judge lifted the nationwide suspension of WhatsApp in Brazil on Tuesday, allowing the popular messaging service owned byFacebook to get up and running again.

The ruling, from Judge Ricardo Múcio Santana de Abreu Lima, overturned a lower court order that had led to WhatsApp being blocked on Monday afternoon. The suspension was supposed to last 72 hours.

Judge Múcio is one of 13 judges on the higher court in the northeastern state of Sergipe, where WhatsApp has become embroiled in an organized crime and drug trafficking case. Authorities are seeking information for the case from the messaging service, but WhatsApp has not complied with requests for data, leading to the court order on Monday.

Read More…

WhatsApp Blocked in Brazil as Judge Seeks Data

Vinod Sreeharsha – The New York Times, 05/02/2016

WhatsApp, a messaging service owned by Facebook, was shut down in Brazil on Monday after a court order from a judge who is seeking user data from the service for a criminal investigation.

Judge Marcel Maia Montalvão ordered telecom companies operating in Brazil to suspend WhatsApp nationwide for 72 hours. As of just after midday Monday, Brazilians said they could not use the popular messaging service.

The shutdown is the latest twist in a case that has embroiled WhatsApp in legal trouble. The case, which is under seal, involves an organized crime and drug trafficking investigation in the court in Lagarto, in the northeastern state of Sergipe. The court has been seeking data from WhatsApp to aid in the investigation. Diego Dzodan, a Facebook executive, was briefly taken into custody in March for refusing to comply with orders to turn over WhatsApp information in the case.

Read more…

Petrobras scandal

Paulo Sotero – The Editors of Encylocpædia Britannica

Petrobras scandal, Brazilian political corruption scandal beginning in 2014 that involved the indictment of dozens of high-level business people and politicians as part of a widespread investigation alleging that many millions of dollars had been kicked back to officials of Petrobras, Brazil’s huge majority-state-owned oil company, and to politicians—especially members of the ruling Workers’ Party (Partido dos Trabalhadores; PT) of Pres. Dilma Rousseff—by prominent Brazilian corporations in return for contracts with Petrobras.

The malfeasance was revealed by a federal investigation begun in 2014 under the code name Lava Jato (“Car Wash”). The massive scheme to defraud Petrobras—Brazil’s largest enterprise and a symbol of the country’s entrenched economic nationalism—did not fully come to light, however, until after the narrow reelection of President Rousseff on October 26, 2014. By the time of her second inauguration, on January 1, 2015, Rousseff’s approval rating had collapsed to 14 percent, with some two-thirds of Brazilians blaming her for Petrobras’s troubles.

Dubbed “Petrolão”—after mensalão (“big monthly bribe”), the vote-buying scandal that had plagued the government of Rousseff’s predecessor and mentor, Luiz Inácio Lula da Silva (better known simply as “Lula”)—the episode came to be viewed as the largest corruption scandal in Brazilian history. By June 2015 a massive scheme to defraud Petrobras on contracts to develop the so-called pre-salt oil reserves found offshore in 2007 had appeared on investigators’ radar. Moreover, reports suggested that federal prosecutors were also looking into the electricity-generating sector, pension funds for employees of state-owned companies, and the National Bank of Economic and Social Development (BNDES). The latter had provided billions of dollars in subsidized financing to Petrobras and other “national champions,” such as billionaire Eike Batista, whose wealth plummeted spectacularly in 2013.

Read More…