The Furnas List is an episode worthy of Poe’s “The Purloined Letter.”
Political overtones aside, Brazil’s “big monthly allowance” trial should offer some insights into the theory and practice of political money laundering under Brazilian law.
The self-same scheme, allegedly operated inside an ad agency serving state-run firms, appears to have served both the PSDB-DEM coalition, in 1998 and 2002, and later by the PT coalition, starting in 2003. In both cases, it seems, funds were used to pay off campaign debt.
In both cases involving the PSDB-DEM, the case has been divided along the lines of individual indictments, to be tried separately in lower courts except where defendants have a form of legislative immunity that designates the Supreme Court as the trier of fact.
The PT case, meanwhile, has been treated by the Brazilian federal prosecutor as a RICO-equivalent conspiracy with 38 defendants and is being tried the Supreme Court, with ample media coverage.
Partisans of the PT point to a double standard — and not without some justification. The so-called “big monthly alliance of the Toucans” — mascot of the PSDB — in currently underway in a Belo Horizonte federal court, with practically zero publicity.
In this context, the story of the so-called Furnas List is like some forgotten chapter of the Da Vinci Code, or a chapter from the diary of Vlademiro Montesino, spymaster to Peru’s Fujimori.
The list purports to detail a complex scheme of illegal campaign contributions funneled through a state-run energy company, Furnas, to the PSDB — the center-right social democratic party — and its allies in 2002.
Where the story gets all postmodern is over the issue of the authenticity of this list.
What the Furnas case comes down to is a case of dueling experts in which one examination — paid for by the PSDB and released late last year — has never been fully disclosed.
Precedent: The Phony Swiss Bank Account of President Squid
The case resembles a manufactured scandal from 2006 in which forged documents were splashed all over the cover of Veja magazine, purporting to document the illegal Swiss bank accounts of senior government and police officials.
Justifying the publication of this disinformation, Veja claimed that private experts employed by it had been unable either to confirm or deny the authenticity of the clumsy forgeries.
As to the Furnas list, in late 2011 and early 2012, Veja magazine and the Estado de Minas daily used the findings of an American document examiner — an ex-Secret Service agent, Larry F. Stewart — to challenge its authenticity, even though, as the Folha de S. Paulo reported in 2006, federal police examiners had authenticated it five years prior to that date.
«The Polícia Federal confirmed yesterday [-- 15 June 2006 --] the authenticity of the so-called “Furnas List”, a five-page document reflecting alleged campaign donations as part of an off-the-books finance scheme for the 2002 elections. All in all, the list reflects cash flows of R$ 40 million.»
The breakdown of payments is ilustrated above.
The scheme in this case is relatively simple to understand: The Furnas list allegedly shows kickbacks collected from suppliers and contractors and funneled the funds to a list of PSDB and allied candidates.
The attempt to undermine this evidence smacks of disinformation.
«According to PF public relations in Brasília, an examination by the National Criminalistics Institute INC concluded that the list was not forged and that the signature of Dimas, former engineering director of the state-owned electric company Furnas, was genuine.
«The PF said, however, that there was no way to verify the contents of the document. The document refers to companies that allegedly cooperated with a slush fund managed by Dimas Toledo.»
Above, a document circulated by dirty bloggers showing that Larry F. Stewart was charged with perjury in his expert testimony before a federal court in 2004.
The case was, in fact, the high-profile prosecution of TV home economist Martha Stewart for insider trading.
In his testimony, Stewart claimed to have been actively involved in testing and examination in which he allegedly played no part.
Adversaries of the PT say the attempt to undermine Stewart’s credibility is a desperate attempt to perpetuate a «big lie» strategy.
And in fact, as his defenders point out, Stewart was acquitted of perjury in this sideline to the Stewart case, but not before he was suspended from his Secret Service job.
«Because the gringo’s examination was extrajudicial, the PSDB and DEM in Minas are suspected of having provided the expert with a “xerox” of the original, leading to the self-evident conclusion: that the originality of a copy cannot be attested. »
The leader of the Workers’ Party in the state legislature of Minas Gerais, Rogério Correia, was having a rough year.
In December 2011 Veja magazine made a public accusation. Headlined “The Forgery Plot” and bylined to Gustavo Ribeiro and Rodrigo Rangel, the article suggested that Correia was one of the masterminds of the forgery, produced by lobbyist Nilton Monteiro, of what came to be known as the Furnas List, a document containing the names of alleged beneficiaries of an off-the-books finance scheme used by the PSDB during the 2002 elections.
At the time, Veja’s report was criticized by bloggers who argued that the article was more like a novel, filled with adjectives and insinuations. Naturally, this rebuttal did not receive equal time, but it did point out one highly significant fact that Veja had left out:
Veja omitted to inform that a judicial ruling by judge Maria Luiza Marilac Alvarenga de Araújo had found Monteiro innocent, in a case in which he was accused by ex-PFL federal deputy José Carlos Aleluia of having forged the Furnas list. Along with other evidence, the not guilty verdict was based on the existence of a forensic document analysis by the federal police and the justice ministry. … This analysis pointed out that there were no signs of tampering; that Dimas Toledo’s signature was genuine; that the penmanship was entirely consistent with the signatures and initials on each page; that the printing of its five pages indicated they were produced by the same printer; that the ink used for signatures, initials and marginal notes were the same; and so on.
The following week, Veja returned to the Furnas list, saying that it had been forged in order to protect former president Lula during the “big monthly allowance” crisis.
Shortly thereafter, the daily O Estado de Minas ran a series of reports suggesting that Nilton Monteiro had attempted to collect a debt owned him “for supposed services rendered” to Rogério Correia. The Minas Gerais daily called for the impeachment of the PTista.
That was the cue for the PSDB to present a motion in the state assembly, where the PSDB tendency led by Senator Neves has an ample majority.
At around the same time, PSDB leadership paid R$ 200,000 to a U.S. expert, who concluded that the list was a crude fake. According to Rogério Correia, the examination was performed on a xerox copy.
“It [my impeachment] failed to go forward only because the plot behind it was laid bare. The document examined by the federal police was demonstrably authentic. O state high court [of Minas Gerais] had already heard and ruled on a case against Monteiro for the alleged forgery, and had declared the list authentic. What also helped save was the backing I recieved from the PT, PCdoB, PMDB and civil society”, Correia says.
Looking back, Correia describes how the political ambush worked. Em retrospectiva, ele identifica como teria se dado a armação política:
1. A civil police agent from the Special Operations Department — described by Correia identifica as the “political arm” of the Minas Gerais state police — had reportedly obtained transcripts from court-ordered wire taps targeting Nilton Monteiro. The court-supervised recordings were part of an investgation into a campaign finance scheme that was summarized by the Furnas list.
2. These transcripts were taken out of context in the Veja magazine pieces in order to link them to the accusations that Correia was part of the scheme.
3. The repercussions of the Veja story in the media of Minas Gerais created a climate of opinion favorable to impeachment.
The timing of these maneuvers leads Correia to speculate that what the PSDB wanted ways to pressure federal attorney Andrea Bayão Ferreira, who was preparing charges based on the Furnas list in Rio de Janeiro — charges filed earlier this year, as Amaury Ribeiro Jr. of Hoje em Dia reported.
Since being accused by Veja in late 2011, however, Correia’s situation has turned around.
The federal police probe of numbers racketeer Carlinhos Cachoeira in Goiás and the DF has shone light on the magazine’s “investigative” methods.
The federal prosecutor’s charges based on the Furnas list presented two especially important new facts
(1) The official forensic examination — according toRogério Correia,the only such test performed on the original of the Furnas list — found no signs of tampering and confirms the signature of Dimas Fabiano Toledo, the former engineering director of Furnas accused of organizing and collecting payments from the company’s suppliers.
(2) Contrary to what Veja published, the transcripts of wire taps targeting Nilton Monteiro show that he believed in the authenticity of the list. According to Correia, there was nothing in those transcripts to corroborate the accusations against him. According to Amaury Ribeiro Jr., the federal prosecutor wrote that“during the interception of phone lines used by Nilton Monteiro, nothing was unconvered that would indicate the list was false. On the contrary, in his conversations, including conversations with his wife, he maintains that the list is authentic.
The PT’s Correia also sued O Estado de Minas successfully for the publication of a right of reply. After more than four months, however, the newspaper has not published it. It has instead paid a fine of R$10,000.
In its sentence, the state high court pointed to expressions used to describe Correia in the newspaper’s coverage, which it said “injustly accused the plaintiff of criminal actions, as well as “injuring and defamining him.” “desrespeito e desfaçatez”; “ridícula demonstração de desfaçatez na Assembléia”; “desrespeitando aquela Casa e a inteligência do povo mineiro”; “encenação”; “deformada noção de compromisso com a ética e com o interesse público”; “prática de denúncia irresponsável”; “método de ação eleitoral próprio dos despreparados para vida parlamentar e o exercício do poder político”; “despudor de articular sórdida montagem”; “farsa petista”; “montagem de fraude”; “Rogério Correia (PT), patrono da iniciativa”; “O deputado (…) tentou mais uma vez enganar de boa-fé de seus colegas” (f. 06 e 09-TJ).
Rogério Correia is now weighing whether to file a criminal complaint against the newspaper’s executive management for failure to comply with a court order.
He is also suing Veja for libel.
As to the list, Correia says there are strong indications that the numbers it presented correspond to donations actually delivered:
(1) Former federal deputy Roberto Jefferson confirmed receiving the R$ 75,000 attributed to him. ” Roberto Jefferson, who was helping the PSDB accuse the PT, by the way, said that he himself had received the amount listed. They are trying to gloss this over,” said Correia.
(2) State legislator Antonio Julio, of the PMDB, who is listed as having received R$ 200,000, confirms requesting the funds from Furnas as an investment in the reform of a hospital, which did in fact take place.
According to the list, the presidential campaign of José Serra PSDB à Presidência, José Serra, received R$ 7 million, while the gubernatorial campaign of Aécio Neves received R$ 5.5 million.
At one point, I asked the congressman:
“Were you nearly impeached because of a false accusation.”
Correia: “Yes, a false accusation.. The political wing of the state judicial police, through police official Márcio Simões Nabak, published falsehoods in Veja magazine and the daily Estado de Minas, upon which the PSDB moved to impeach me. It was all a setup!”
This was allegedly part of a fraudulent arrest of lobbyist Nilton Monteiro by the state police, accusing Monteiro of forging documents not related to the Furnas list. At the time, the police revealed the existence of a notarized document indicating that Monteiro was trying to collect a debt from Correia.
Correia admits to knowing Monteiro and says the lobbyist told him about slush funds used by the PSDB in Minas during the elections of 1998 and 2002. He says, however, that he never owed a debt to the lobbyist and suspects that the accusation was made as a basis for expelling him from the legislature.
“When they arrested Monteiro, they made a point of shifting the focus to the Furnas list, which is an obvious case of legal error. They turned Nilton Monteiro into a political prisoner. They were investigating a matter outside of their jurisdiction,”, afirma Correia said.
Nilton Monteiro, who is currently free, denies all the charges. The lobbyist sent a letter to the state assembly of Rio de Janeiro charging that while he was under arrest, he was taken to the headquarters of DEOESP, where Nabak is in charge, and had met with three federal legislators from the PSDB. These allegedly pressured Monteiro into denying the authenticity of the Furnas list and incriminating Rogério Correia.
“You need to recognize the gravity of the situation What Monteiro is alleging has not yet been proven. Monteiro, however, says that he met with the three PSDB deputies in Nabak’s office,” the PT leader says.
According to Rogério Correia, the worst part was that the allegations against him continued, albeit in a stealthy manner.
The August edition of Piauí magazine published a report on the parallel “big monthly allowance” case in Minas Gerais, in which a PSDB campaign finance scheme was run by publicist Marcos Valério.
NB: Don’t confuse the 1998 cash pipeline with the Furnas List episode of 2002.
The two cases have some characters in common: Rogério Correia , for example, denounced both of them.
Nilton Monteiro, who has for many years worked behind the political scenes, was involved in both.
In 1998, in the case of the Minas Gerais cash pipeline, Cláudio Mourão was campaign treasurer for the reelection of governor Eduardo Azeredo. Azeredo lost the elections and left some financial matters unresolved, including matters involving Mourão. In 2005, Mourão appeared before the Supreme Court to claim a debt of R$ 3.5 million. This was the origin of the “Cláudio Mourão List”, which Nilton Monteiro turned over to the federal police.
Roughly speaking, the cash pipeline functioned as follows: the advertising agency of Marcos Valério would mingle money from loans taken out from the Banco Rural with millions of donations from state-owned companies in Minas, destined for the motocross event. These funds were transferred to the Azevedo campaign. The mining company Comig, the sanitation company Copasa, the Bemge bank and the electricity company Cemig together donated R$ 5.1 million. Forensic accounting shows that less than R$ 100,000 of these funds were passed along to the motocross event.
In all, the scheme allegedly moved R$ 100 million in order to finance national and state campaigns of PSDB and allied candidates. This took place in 1998, when Fernando Henrique Cardoso was up for reelection.
Valério allegedly paid off 179 persons and corporate service providers to the Azeredo campaign, whose names were recorded in the Mourão List.
FOr his involvement in the Minas “cash pipeline” Senator Azeredo was charged with embezzling and money laundering in the Supreme Court. The accusation was accepted by a vote of 5-3.
In an interview with Piauí’s Daniela Pinheiro, Azeredo commented on the bill of impeachment filed against him by the PSOL — it was voted down — and the support he received at the time: “It wasn’t that capita-S Support, but it did help. I had the support of the party as well. Sérgio Guerra, Serra, those party members supported me. But one of them failed to support me”.
Azeredo didn’t say who left him exposed when the chips were down. Was it Cardoso, who said at the time, “Let whoever owes a debt pay what he owes”? Or was it Aécio Neves?
Azeredo’s mysterious comment may not bode well for the PSDB. It makes sense for the party to close ranks and support Azeredo. His defense depends, in party, on the theory of forged documents.
In his Piauí interview, Azeredo said that the Mourão list is a “spurious document fabricated by a well-known Minas lobbyist at the behest of a PT lawmaker.”
Rogério Correia believes that Azeredo may be referring to him.
He denies being the author of this list, but admits that he was looked into the case, focusing on Cemig’s role in financing the PSDB’s 1998 campaign.
The PT lawmaker says he obtained detailed information on the flows of money to and from Cemig by way of the SMP&B ad agency. Correia claims that there is documented proof of deposits funneled to and used by the current mayor of Juiz de Fora, Custódio Mattos.
Correia also says there are no such indications in the case of Aécio Neves, who in 1998 was a federal deputy standing for reelection and who appears on the Mourão list as having received R$ 110,000.
Aécio is a potential presidential hopeful for 2014.
As to the PSDB senator, Correias has no doubts: “He [Aécio] is behind this campaign,” that is to say, the campaign to undermine the credibility of the documents and of anyone accusing the party of maintaining an off-the-books campaign finance operation in Minas Gerais.
Over the past decade, Minas journalists have on several occasions protested the hardball tactic’s of Neves’ sister, a top PR professional working on the governor’s campaigns.
Correia says: “Look, the situation here in Minas is serious, we are not living under the democratic rule of law as we should be. In Minas, the press is virtually dominated by the PSDB, and the Neves group in particular. The daily O Estado de Minas is the clearest example of this.
Nothing gets published without passing through their censors first, a process that escalates during election seasons. Press censorship is deployed on a grand scale and, together with a state police that has been used to create political factoids in favor of the PSDB, has created a political faction inside the state judicial police.
This is extremely troubling. «Using a local newspaper and based on articles published in Veja magazine, this scheme is pressing for the impeachment of a duly elected legislator who is merely trying to do his job, which is to investigate charges that slush funds were used in the 1998 and 2002 elections.»
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