An escalating corruption scandal rocks Brazil

April 14, 2015

Mary Anastasia O’Grady – The Wall Street Journal, 04/15/2015

Former Brazilian presidential candidate Aécio Neves speaks for a lot of his compatriots when he says President Dilma Rousseff’s Workers’ Party (PT) used stolen funds to defeat him in Brazil’s runoff presidential election in October.

In an interview in Lima last month I asked Mr. Neves—who is president of the Social Democracy Party of Brazil (PSDB)—whether he lost the election because the socialism of the hard-left Ms. Rousseff had greater appeal to Brazilians than his more market-oriented platform.

He denied the possibility. He lost, he told me, because of “organized crime.”

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Correcting Brazil’s police violence: the case of Rio’s Pacifying Police Units

December 19, 2014

Layne Vandenberg – Brazil Institute, 12/18/2014

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Widespread protests against police violence and racism have recently scattered the United States after the release of the Ferguson (Michael Brown) and Eric Garner grand jury decisions. While Americans grapple with the reality of police violence, other countries live deeply entrenched in this reality. Scholar Ignácio Cano says there is “a Ferguson every day” in Brazil, and the state of Rio de Janeiro has been trying out a new policing strategy in hopes of improving community-police relations in its slums, called favelas.

Between 2009 and 2013, Brazilian police killed more than 11,000 people, or about six people per day. The 2014 edition of the Brazil Public Security Yearbook also found that 53,646 homicides occurred in 2013, or one person every 10 minutes.

With the highest per capita rate of killing of any Brazilian state and 6,826 homicides per year between 1991 and 2007, the state of Rio de Janeiro is “comparable with urban areas of countries in civil war.” But Rio needed a quick solution for its violent reputation among the international crowd. Rio is home to Maracanã stadium, where several 2014 FIFA World Cup matches, including the final, were held and the city is the host of the upcoming 2016 Olympic games. So how do you change the face of a city and a state in time for the world’s two largest sporting events?

The Rio state government’s solution: pacification.

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Defense in Brazil’s Petrobras probe trying to change court

November 27, 2014

Caroline Stauffer – Reuters, 11/26/2014

Defendants in a bribery investigation involving Brazil’s state-run oil company Petrobras are trying to move the probe to the country’s Supreme Court, which has a reputation for moving slowly and letting cases drag on for years.

Lawyers for former Petrobras officials accused of diverting company funds to political parties, as well as construction executives accused of participating in the scheme, are trying to take the case away from federal judge Sergio Moro, who has a strong record sentencing money laundering cases.

Moro has presided over the case since March, ordering dozens of arrests. The scandal at Petroleo Brasileiro SA, as the company is formally known, has shaken Brazil’s economy and became the biggest crisis yet for President Dilma Rousseff, who was chairwoman of the company’s board from 2003 to 2010.

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Brazil may have escaped recession, but not the minefield

November 26, 2014

Silvio Cascione – Reuters, 11/26/2014

Brazil’s newly-re-elected government is set to announce on Friday that the recession that began at the start of 2014 is now over. But a minefield of risks surrounding Latin America’s largest economy recommends caution before celebration.

How to quantify the damage from an unprecedented police investigation that could incriminate dozens of politicians within Rousseff’s coalition? How to measure the harm caused by the ongoing U.S. Department of Justice investigation into Petrobras, the giant oil company that represents alone one tenth of all investments in Brazil, according to some estimates?

How to judge whether Brazil will lose its investment-grade rating if nobody knows yet to what extent the government of re-elected President Dilma Rousseff will cut spending and hike taxes? And what if Sao Paulo, one of the world’s largest cities, runs out of water? Reservoirs have never been so low, and it is unclear if there is a credible Plan B.

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British World Cup Ticket Official May Be Jailed in Brazil

November 26, 2014

Tariq Panja – Bloomberg, 11/25/2014

A senior executive of soccer governing body FIFA’s ticketing and hospitality partner could be jailed if he returns to Brazil to await trial for charges including money laundering, racketeering and illegally selling World Cup tickets.

Ray Whelan, a director at Match Services AG, who denies the charges, was arrested twice in raids around the July 14 World Cup final before being held in Rio de Janeiro’s Bangu Prison. A panel of judges on Brazil’s Supreme Federal Court, the country’s highest appeal body, yesterday overturned a ruling allowing Whelan and others to be released from prison in August.

Whelan, 64, who had been ordered to stay in Rio as a condition of his release, left for the U.K. on Nov. 12 after a separate court allowed him to temporarily travel on condition he return within three months. A trial date has yet to be set.

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Petrobras scam allegations weigh on Brazil as blacklist fears rise

November 25, 2014

Joe Leahy – Financial Times, 11/24/2014

When black money market dealer Alberto Youssef was arrested by police in March, he was carrying seven mobile phones with another 30 in a desk in his office, an officer involved in the case said.

The reason the jailed conspirator in what is emerging as Brazil’s biggest corruption scandal might have needed so many phones is becoming clearer after police this month raided the offices of Brazil’s major construction companies, arresting scores of officials and executives in the process.

The builders being investigated in the scam, in which Mr Youssef allegedly co-operated with former Petrobras director Paulo Roberto Costa to skim billions of dollars off the state-owned oil company to pay kickbacks to politicians, are responsible for much of Brazil’s infrastructure projects, from airports and nuclear submarine bases to stadiums for the 2016 Olympics.

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Top banker won’t be Brazil’s finance minister: official

November 21, 2014

Alonso Soto – Reuters, 11/20/2014

The chief executive of Brazilian bank Bradesco SA will not be the country’s next finance minister, a government official said on Thursday, after two local newspapers reported he turned down the job in a major setback for recently re-elected President Dilma Rousseff.

Luiz Carlos Trabuco is out of the running for the post, the official said on condition of anonymity. The official declined to confirm or deny that Trabuco had been offered the job.

Since Rousseff won a runoff vote on Oct. 26, she has yet to name a new finance minister for her second term. Brazil’s economy is struggling with slow growth, high inflation and fallout from a growing corruption scandal at state-run oil company Petroleo Brasileiro SA.

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