Brazil’s Olympic Greeting: Welcome to Hell

Beth McLoughlin – U.S. News, 07/18/2016

RIO DE JANEIRO — In Brazil’s oldest favela of Providencia, Diego Deus lives with his wife and 6-month-old son. He can walk to work at the Museum of Modern Art, a gleaming new addition to the city’s port zone that has been redeveloped in advance of this summer’s Olympic Games.

Unemployment has been steadily climbing in Brazil, a country in its worst recession since the 1930s, but Deus is one of many Rio residents who has found work directly or indirectly as a result of the Games. Proud of his neighborhood, he resisted being moved when 200 people were evicted to renovate Providencia.

“They wanted to take my house out [to build a cable car], but I resisted,” Deus says. “I don’t see myself living anywhere else. It might seem strange to say it, but I feel safe here, I can go out and leave my door open. People look out for you.”

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Brazil Police Investigate Panama Bank

Rogerio Jelmayer – The Wall Street Journal, 07/07/2016

SÃO PAULO—Brazil’s authorities are investigating a Panamanian financial institution that allegedly worked with “Panama Papers” law firm Mossack Fonseca  & Co. to set up offshore accounts for Brazilian clients, in an operation that is an offshoot of the Car Wash corruption probe.

Police and prosecutors said Thursday during a press conference that police have detained for questioning seven people in São Paulo state linked with the financial institution, FPB Bank Inc.

According to prosecutors, there is evidence that services provided by FPB and Mossack Fonseca, the Panama City-based law firm whose client records were exposed as part ofthe so-called Panama Papers leak, were used by clients in Brazil to hide money coming from bribes paid in a bid-rigging scheme at state oil company Petróleo Brasileiro SA, or Petrobras.

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Brazil’s corruption probe means a boom time for lawyers

Samantha Pearson – Financial Times, 06/20/2016

With its concrete beds and squat toilets, the Complexo Médico-Penal is probably not where Brazil’s top construction and oil executives had pictured spending their retirement.

Normally reserved for mentally ill prisoners, the prison lies at the end of a potholed road on the banks of the Iraí reservoir in the southern state of Paraná. From the outside, a dilapidated brick archway at CMP’s entrance gives it the appearance of a rundown farm. However, an aerial view reveals its sinister layout, with the cells arranged in the shape of a giant machine gun.

For most of the past year, it has been home to Marcelo Odebrecht, head of Latin America’s largest construction group; João Vaccari Neto, former treasurer of the leftwing Workers’ party, Brazil’s largest political party, and other suspected ringleaders of the vast corruption scandal at Petrobras, the oil company.

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Bugging in Brazil Exposes Fear of Biggest Betrayal Yet

Sabrina Valle and Blake Schmidt – Bloomberg, 06/15/2016

The tale of Brazil’s political crisis is one of betrayals — and the most explosive one may be yet to come.

Marcelo Odebrecht, the former head of Brazil’s largest construction conglomerate who was arrested in a massive corruption scandal, is trying to reduce a 19-year sentence through a plea bargain. Its potentially devastating impact on the political class was made clear in a chat between convalescent former president Jose Sarney, 86, and a long-time pal. “Odebrecht will show up with a 100-caliber machine gun,” Sarney said.

Little did he know that his friend, former Petrobras executive Sergio Machado, was secretly taping their conversations as part of his own collaboration deal, going so far as to record him at a hospital. The leaked recordings were obtained during a probe, dubbed Carwash, into corruption at the state-run oil company.

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Brazil Congressional Committee Vote Deals Blow to Ex-Speaker

The Associated Press – ABC News, 06/14/2016

One of Brazil’s most powerful men was dealt a major blow on Tuesday, when a legislative ethics committee voted in favor of a motion to strip the former speaker of Congress’ lower house of his mandate over allegations he lied when he denied possessing foreign bank accounts.

Eduardo Cunha has been regarded as one of Brazil’s most skilled political operators, and even though he’s been beset by corruption allegations and was removed from the post of speaker, he still wields considerable influence in Congress. It came as little surprise, then, that Tuesday’s long-awaited vote by the Chamber of Deputies’ ethics committee was a nail-biter. Many observers predicted that Cunha’s supporters would succeed in defeating the measure.

The 11-9 result hinged on one single vote, that of Rep. Tia Eron from the northeastern Bahia state. The vote was postponed last week after Eron failed to show up to the committee.

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Brazil police officer, symbol of corruption crackdown, arrested

Brad Brooks – Reuters, 06/08/2016

He is a symbol of Brazil’s biggest corruption investigation – a ballyhooed battle against impunity for powerful politicians and businessmen.

But on Wednesday, federal police agent Newton Ishii sat in the same jail where he had been photographed and shown on TV escorting countless high-profile politicians and executives linked to a kickback scandal at state-run oil company Petrobras (PETR4.SA).

It is a long fall for Ishii, perhaps the first Brazilian policeman ever to be exalted in a Carnival song, sung by party-goers who wore masks bearing his likeness and dressed in his black police garb.

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Brazil Police Raid Office of Olympic Site Building Consortium

Paul Kiernan – The Wall Street Journal, 06/07/2016

RIO DE JANEIRO—Brazil’s Federal Police raided the headquarters of a consortium of companies building one of the main 2016 Olympic centers on Tuesday, fueling concerns that malfeasance may have tainted Games-related construction projects.

Investigators say they have uncovered evidence of fraud and falsification of documents related to disposal of construction waste—mainly dirt— at Rio’s Deodoro sports complex. A federal judge has also frozen 128 million reais ($37 million) in federal funding from state bank Caixa Econômica Federal to pay for the project.

The consortium building Deodoro consists of Brazilian construction giants Queiroz Galvão and OAS SA, both of which have been implicated in a massive graft scandalsurrounding state oil company Petróleo Brasileiro SA, or Petrobras. Several executives from OAS have been sentenced to up to 16 years in prison for corruption-related offenses, and the company is in bankruptcy protection. Two executives of Queiroz Galvão, which is under investigation, were temporarily arrested in late 2014.

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Brazil’s Petrobras Trial Date Set, As U.S. Pension Funds Seek ‘Tens of Billions’ In Losses

Kenneth Rapoza – Forbes, 05/26/2016

Brazil’s oil company Petrobras will finally get its day in a U.S. court on Sept. 19 in a trial that pits 18 former executives and 13 investment banks, including J.P. Morgan Securities, against U.S. and U.K. investors. Claimants are seeking “tens of billions of dollars” in losses.

The company is the centerpiece in what has become Brazil’s crime of the century. The scandal involving contract rigging, bribery and money laundering recently brought down a sitting president and promises to devour a chunk of Brazil’s career politicians in criminal probes.

“We are seeking multiple tens of billions of dollars,” says lead counsel Jeremy Lieberman of Pomerantz, the New York law firm leading the charge against Petrobras. “Not only are we challenging company statements on how it engaged in this bribery scheme and inflated its assets, we are saying that Petrobras’ claim that it lost about $2.5 billion to fraud is wrong. It’s a whole lot more than that.”

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Brazil Olympic Venues Targeted In Corruption Probe

Brad Brooks – Huffington Post, 05/25/2016

Brazilian investigators have expanded their probe into possible corruption around the staging of the Olympic Games in Rio de Janeiro this August to include all the venues and services financed with federal funds, a lead prosecutor told Reuters.

Federal investigations have previously focused on “legacy” modernization projects not directly tied to the Games but this newly disclosed probe includes Olympic Park and the Deodoro area where Olympic venues are located, federal prosecutor Leandro Mitidieri said.

“It’s not just the physical works we’re looking at – it is contracts for services, security, everything that used federal funds,” he told Reuters from his Rio de Janeiro office late on Tuesday.

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From the favelas: the rise of rooftop solar projects in Brazil

Heriberto Araújo – The Guardian, 05/24/2016

Sunny days have long been considered a competitive advantage for Brazil. Before the 2014 World Cup, the country’s tourist board set up a website allowing visitors to compare the number of sunny days in US and European capitals to cities in Brazil (eg Brussels 103, Rio de Janeiro 212). But while tourism may have been capitalising on the sunshine, the solar industry has not.

According to statistics from the Brazilian electricity regulatory agency, Aneel, solar accounts for just 0.02% of the country’s energy. The bulk of the country’s energy generation (70%) is from hydropower.

However, while demand for energy is increasing, multi-year droughts andwidespread blackouts have created serious concerns about energy security for millions of businesses and homes. Despite a traditional lack of support (unlike Europe, China and the US, Brazil has not implemented feed-in tariffs or tax breaks), the government is now making efforts to diversify (pdf) the country’s energy mix with recent public auctions for solar and wind. Its 10-year energy plan released in 2014 estimates that 7GW of solar projects will be installed by 2024, making up 3.3% of Brazil’s energy mix.

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