The Heat: Brazil at a Crossroads

Paulo Sotero, Lucrecia Franco,  Ligia Maura Costa, Bernardo Sork, Fabio Ostermann – CCTV, 01/28/2016

Political upheaval, economic downturn and corruption scandals: Brazil is at a crossroads.

So, what’s the way forward for a Latin American giant in crisis? 2015 was not Brazil’s easiest year. Several widespread protests across the country called for change. Confidence in president Dilma Rousseff reached a record low. A scandal at state-run oil conglomerate Petrobras exposed corruption. All while the economy stagnated and began a free fall. 2016 hasn’t started off much better either. For a Brazilian perspective, from Rio de Janeiro, The Heat was joined by CCTV America’s Lucrecia Franco. To discuss the current political and economic climate: Ligia Maura Costa is a professor of legal studies at Escola de Administração de Empresas de São Paulo. Bernardo Sorj is a professor of Sociology at the Federal University of Rio de Janeiro. To discuss Brazil’s future and the youth movement: Fabio Ostermann is one of the founders and a former coordinator of Movimento Brasil Livre. Paulo Sotero is director of the Brazil Institute of the Woodrow Wilson International Center for Scholars.

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Brazil Petrobras Former Director Jorge Zelada Jailed

BBC News, 02/01/2016

A former director of the Brazilian state-owned oil company Petrobras has been sentenced to twelve years in prison, as part of a huge investigation into bribery and corruption.

Jorge Zelada, who ran Petrobras’s international division, was convicted of money-laundering and corruption.

Another Petrobras manager, Eduardo Costa Musa, and two others were also jailed.

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Brazil Oil Giant Petrobras Cuts Production, Spending Outlook; Shares Hit 12-Year Low

Aditya Kondalamahanty – International Business Times, 01/13/2016

Brazil’s largest oil company, Petróleo Brasileiro S.A., reduced its production outlook till 2019 as the state-run oil producer made deeper cuts to its budget amid an extended decline in oil prices and a massive domestic corruption scandal. Shares of the company fell 9.2 percent to a 12-year low following the announcement Tuesday.

Commonly referred to as Petrobras, the company slashed its investment plan for the five years through 2019 to $98.4 billion, down about 25 percent from its original budget of $130 billion announced last year. The company still plans to divest assets worth $14.4 billion this year to fund expansion plans, according to the statement.

Production target for 2020 was reduced 3.6 percent to 2.7 million barrels a day, Petrobras said in a filing. The company also said it expected Brent crude oil price — a benchmark for global oil prices — to average at $45 per barrel in 2016.

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Brazil’s Petrobras Slashes Investment Budget for Second Time

Paul Kiernan, Rogerio Jelmayer – The Wall Street Journal, 01/12/2016

Brazilian state-run oil company Petróleo Brasileiro SA, or Petrobras, trimmed its production targets and drastically cut its investment budget for the coming years after its sanguine projections for oil prices and exchange rates didn’t pan out and as it struggles to sell assets.

Petrobras said Tuesday it will invest $98.4 billion in the 2015-19 period, down from a June projection of $130.3 billion. The company reduced its targets for oil production in Brazil by 40,000 barrels a day in 2016 and 100,000 barrels a day in 2020.

The latest figures mark the second time Petrobras has had to revise its 2015-19 business plan. The company tweaked its spending outlook in October after oil prices and the real promptly fell below its original projections.

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Brazil Probes 13 banks for Schahin, Petrobras Operations: Report

Reuters, 01/11/2016

Brazil’s federal tax authority and prosecutors are investigating 13 foreign and local banks for possible financial crimes intermediating loans to Brazilian engineering conglomerate Grupo Schahin, newspaper O Estado de S. Paulo reported on Monday.

The banks under investigation include Itaú BBA – the investment-banking unit of Itau Unibanco Holding SA, – Banco Bradesco SA, Banco Santander SA, HSBC Holdings Plc, Deutsche Bank AG, Banco Votorantim SA and other smaller Brazilian institutions, Estado reported, citing a tax office document.

The authorities are investigating whether the banks could be accused of money laundering for being originators, underwriters or managers of loans to Schahin. Schahin is currently under investigation by Brazilian authorities for potential fraudulent operations that prosecutors allege benefited the ruling Workers’ Party through state-run oil firm Petroleo Brasileiro SA.

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Brazil’s Rousseff Sees Approval Rating Improve Slightly

Reuters, 12/19/2015

A poll published Saturday in Brazil gave a mild boost to the political survival prospects for President Dilma Rousseff, as she saw a slight bounce in her approval ratings, halting what has been an almost continuous slide for most of the year.

The number of Brazilians who rated Rousseff’s administration “bad” or “very bad” fell to 65 percent, from 71 percent in August, according to a Datafolha poll conducted from Dec. 16 to 17 and published by newspaper Folha de S. Paulo.

Rousseff is under pressure as Brazil is undergoing its worst recession in at least 25 years and a corruption scandal at state-run oil company Petroleo Brasileiro SA which has led to the arrest of numerous high-profile executives and politicians.

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Brazilian police raid home of speaker Cunha and other senior politicians

Jonathan Watts – The Guardian, 12/15/2015

Brazil’s impeachment duel has tilted back in favour of President Dilma Rousseff after her most strident opponent suffered twin blows from the police and a congressional ethics committee.

Two weeks after the lower house speaker, Eduardo Cunha, launched proceedings to remove the head of state from office, his home was raided by detectives as part of the Lava Jato (Car Wash) investigation into alleged corruption at Petrobras and other major companies.

Hours later the lower house ethics committee announced it would investigate claims that the once-untouchable politician lied about Swiss bank accounts. If proven this could result in his removal from office.

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