Letter to LASA from President Fernando Henrique Cardoso

Dear fellow directors of LASA,

I wish to reiterate my gratitude for your invitation to participate at the celebration  of LASA’s 50th anniversary. I have always followed LASA’s journey and had the pleasure of attending several of its meetings.

I am also grateful for your reaffirmation of the invitation, notwithstanding the statements by researchers and professors who, driven by ideological passions, imagined that I might use the event to discuss Brazil’s internal political problems. Those who are acquainted with me know that I was trained as a social scientist at a time when, despite beliefs and values, intellectuals sought to keep scientific objectivity as a core value in their academic endeavors. And yet, the ideological winds currently blowing at certain academic circles seem to mix the position of activists with that of scientists.

Needless to say, in my whole life I have steadfastly stood for democratic values  in the Brazilian context and in the world at large. Exiled by the military coup d’état of 1964, compulsorily removed from the University of São Paulo by the authoritarian regime in 1969, I created a center of political and intellectual resistance in Brazil (like CEBRAP) and helped, as much as possible, in the struggle against military dictatorships in Latin America. For that I paid a heavy price. I was deprived of the chair I had earned at the University of Sao Paulo, was prosecuted by the military regime and submitted to questionings, blindfolded and hooded, in a notorious torture center in Sao Paulo.

Continue reading “Letter to LASA from President Fernando Henrique Cardoso”

Brazil bets on international cooperation to fight tax evasion

Jorge Rachid, Carlos Marcio Cozendey – The Financial Times, 05/26/2016

Gabriel Zucman, author of The Hidden Wealth of Nations, estimates that 8 per cent of global wealth, or $7.6tn, is deposited in jurisdictions commonly known as tax havens. This includes the financial assets of individuals and companies who seek not to pay tax, or pay less tax, in their home countries.James Henry, an economist, lawyer and investigative journalist, estimates the value of unreported financial assets at between $21tn and $32tn.

In a democratic social contract, the financing of states requires every citizen to pay taxes according to their ability to do so. So it is necessary to curb the use of artificial mechanisms to avoid due taxes. One such mechanisms is “aggressive tax planning”, which explores gaps between different national tax laws and embraces legal and accounting manoeuvres for profit or asset shifting towards jurisdictions with favourable taxation and little tax transparency. Certain jurisdictions allow the concealment of the beneficial owner of profits and incomes, undermining the actions of tax authorities.

To address this issue, the G20 group of the world’s largest economies has increased cooperation in actions to fight tax evasion, tax avoidance and money laundering. Such initiatives include the Global Forum on Transparency and Exchange of Information for Tax Purposes (GF) and the Base Erosion and Profit Shifting project (BEPS). The Brazilian government is actively involved in both.

With more than 130 participants, the GF evaluates the tax laws of its members and the practical application of standards to exchange tax information. It also recommends that its members sign the Convention on Mutual Administrative Assistance in Tax Matters. The accession of Brazil to this Convention, signed in 2011 and already approved by Congress, will allow the country to comply with the G20 collective commitment to begin the automatic exchange of financial accounting information for tax matters with other signatories. This will be an important and effective step to curb misconduct within the international environment, including corruption and financing of terrorism.

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Businesses Signal Approval of Brazil Leadership Change

Rogerio Jelmayer – The Wall Street Journal, 05/12/2016

Businesses and investors are cheering the new leadership in Brazil following the suspension of President Dilma Rousseff, who many blame for a deep recession and crumbling finances in Latin America’s largest economy.

Vice President Michel Temer, who officially will replace Ms. Rousseff later Thursday as she steps down to face an impeachment trial, is expected to quickly propose measures to cut spending and rein in entitlements.

Mr. Temer could reduce the number of government ministries — more than 30 exist now — and the potential leader of his economic team is looking to tame budget deficits. These measures aim to shrink a massive budget deficit and restore investor confidence.

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Brazil’s Impeachment Proceedings — Just What is Going On?

Euan McKirdy – CNN, 05/10/2016

It’s enough to make even the most seasoned Brazilian political watcher’s head spin.

The mess that is Brazil’s current political situation took another twist Monday when the new chief of parliament’s lower house said he wanted to strike down impeachment proceedings against President Dilma Rousseff.

The motion to impeach Rousseff was first initiated in December, and in April the lower house of parliament voted overwhelmingly to begin proceedings.

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.

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Brazil’s Corruption Culture ‘can be beaten’

Paul Moss – BBC, 04/26/2016

Even a visitor who detests shopping can admire the building’s quirkiness, a semi-arch that seems almost to fall on to the pavement, embodying the modernist curves which define architecture in Brazil’s capital.

This is a city that was constructed virtually from scratch in the 1950s and which is supposed to proclaim the new, progressive side of the country.

Yet the man I had come to meet at the mall had a story as old as his country’s creation: “When you bid for a government contract in Brazil, they usually say ‘what can you do for us? What can you do to make this contract a win-win for all of us?’ They want a percentage of the contract…which means bribes.”

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Isolated, Rousseff Faces Diminishing Chances to Survive Impeachment

Paulo Sotero – Brazil Institute, 04/13/2016

The loss of support to President Dilma Rousseff intensified after the Chamber of Deputies special committee approved, on April 11, a motion to move forward with impeachment proceedings against the embattled Brazilian leader. The action is grounded on evidence that Rousseff’s government manipulated budget accounts and made unauthorized expenditures to hide an exploding fiscal deficit at the root of the country’s ongoing economic disaster.

The impeachment process has been fueled by revelations of the ongoing investigation of a $3 billion corruption scandal involving state oil giant Petrobras, Brazil’s largest company. The crimes, exposed by multiple defendants through plea bargain agreements with federal authorities, started during the administration of popular former president Luiz Inácio Lula da Silva and continued under Rousseff. Prior to being elected president, Dilma Rousseff was minister of energy and chaired the Petrobras board of directors for five years. Although the president has not been charged in the Petrobras case, politicians closely associated with her have been arrested and accused of a variety of crimes. And she may be charged with obstruction of justice for trying to shield Lula from a criminal investigation related to Petrobras by naming him to her cabinet.

Following last month’s decisive break between the Brazilian Democratic Movement Party (PMDB), Brazil’s largest party, and the government, other members of Rousseff’s fraying coalition have cut ties with the unpopular president, leaving her increasingly isolated to face the Chamber of Deputy plenary vote on impeachment, scheduled for April 17. Her survival depends on ensuring the allegiance of members of small parties who are driven by their interests in accessing federal agencies budgets and patronage jobs.

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