Brazil | «IPOs to Quintuple in 2013»

Source: Portal ClippingMP « Valor Econômico
By: Talita Moreira and Ana Paula Ragazzi
Translation: C. Brayton

S. PAULO — After a lean year for initial public offerings, with a mere R$ 4.3 billion in play — the lowest amount since 2005 — major corporations will likely reconsider floating, or refloating, shares on the stock market this year.

Is that a lot or a little? In tech IPOs alone, the Nasdaq led the NYSE-Euronext 17 to 15 this year — I am reading from a press release. In 2004, 69 domestic companies and 11 qualified closed-end funds went public on the NYSE, for a total volume of 80 IPOs and $45 billion. Should ADRs not be counted as well?

Continue reading

Scandal 47 | Dilma Delegates

I read it in the Estadão, and translate.

BRASÍLIA – President Dilma Rousseff has decided to fire the head of the Federal Presidency’s office in São Paulo, Rosemary Nóvoa de Noronha, who has been indicted by federal police for corruption and influence peddling. The second highest ranking official in the federal Attorney General’s office will also be let go.

The case apparently involves a Paraguayan over-the-counter market in favorable regulatory findings, such as those required to get cargo into the country via Santos, one of its principal ports.

Remind me to tell that well-worn story of mine about getting my books into the country using a Santos despachante.

In the meantime, this item from the white-collar police blotter sounds a lot like a familiar broken record — petty-ante crimes by permanent civil servants of the State used to leverage accusations of endemic corruption inside the Government. Continue reading

Policarpo, On His Oath? | Journo Wanted in RICO Probe

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The phony bribe-stuffed Swiss bank accounts cooked up and served by Veja magazine

I read it in Carta Maior: A congressional panel wants the federal attorney to probe relations among prominent members of the press, on one hand, and movers and shakers of the diversified, post-modern numbers racketeering sector, on the other.

Brasília – The rapporteur of the «CPMI of Charlie Waterfall», deputy Odair Cunha (PT-MG), will request that a subpoena be issued to journalist Policarpo Junior, chief of the Brasilia office of Veja magazine em Brasília, as part of the final report to be submitted today, 21 November 2012, in the Brazilian Senate.

The CPMI is a mixed parliamentary commission of inquiry. Charlie Waterfall is a numbers and gambling racketeer the depths and scope of whose influence are proving difficult to spelunk, although Goiás and Brasília should play a major role.

The Veja journalist is the subject of, or a participant in, a good deal of conversation recorded by the federal police in the case.

In an initial reading of the evidence currently available, it appears that Policarpo was often fed with microwave-ready scandal stories by and at the behest of Charlie Waterfall’s Vladimiro Montesinos, an ex-ABIN agent named Jairo Martins.

PT members on the panel argue that the documents analyzed during the 180-day term of the commission leave no doubts about the journalist’s involvement with the «Waterfall» criminal organization. “This is a  position we have taken from the very beginning,” says Dr. Rosinha (PT-PR), who presides the commission.

The question of issuing a subpoena to Policarpo has created constant friction among CPMI members. Submitted a number of times by PT lawmakers and Senator Fernando Collor de Mello (PTB-AL), the motion failed to receive a majority of the 32 votes on the panel.  The PT, PCdoB, PSB and PTB officially supported this position, but these parties only make up 11 of the votes on the commission.

Opposed to the subpoena, opposition members — PSDB, DEM and  PPS — obtained the support of the PDT and PMDB, which turned the tide in favor of the journalist.

In August, a study carried out by the Waterfall commission at the behest of  Dr. Rosinha found that the Veja editor not only used the Waterfall organization as a journalistic source but also requested favors from Waterfall’s RICO.

Pardon the Newspeak, but RICO = «racketeering-influenced corrupt organization» seems to define the issue ratherly neatly, and even makes for a bilingual pun.

Often, he would receive ready-made “journalism” serving Waterfall’s interests and feature it in the magazine a short time later.

“This study establishes that Policarpo maintained a personal relationship with the Waterfall RICO that went well beyond the source-reporter relationship. He owes Brazilians an explanation, yes he does, ” Dr. Rozinha said at the time.

The study did not confirm any direct participation by other Veja management or employees, including the Civita family, owner of the Abril Group. It did say, however, that stories published by the magazine directly served the interests of the criminal conspiracy.

The report was based on court-ordered wiretaps realized by the federal police in Operation Vegas and Operation Monte Carlo. In Monte Carlo alone, police recorded 42 calls between  Policarpo and members of the Waterfall RICO..

The journalist also faces accusations by Goiânia judge Alderico Rocha Santos, who said that Waterfall’s wife, Andressa Mendonça, tried to blackmail her in exchange for advantageous treatment for Waterfall, threatening her with a dossier that would allegedly compromise her.

Veja defended itself saying, among other things, that it does not compile, nor does it publish, dossiers.

Veja, Veja, as unbelievable as ever.

One example that comes to mind, for example, is the “bribe-stuffed Swiss bank account of Lula” gambit. Luis Nassif narrates the gambit with his usual candor and caution.

Veja’s partnership with investment banker  Daniel Dantas grew closer as 2006 drew to a close. The assortment of articles and dossiers, and especially the most outlandish. seem to have been furnished directly by the banker.

In its May 17, 2006 edition, Veja laid down a bolder bet.

Editor in chief Eurípedes Alcântara received a dossier from Dantas regarding supposed offshore bank accounts of senior government officials The same dossier was supplied to another member of the three musketeers + Dartagnan: Diogo Mainardi.

Assigned to track down the details was Márcio Aith, the same journalist who had covered the Kroll case for the Folha de S. Paulo.

At that point, Aith enjoyed a solid reputation among fellow investigative reporters, having worked at the Gazeta Mercantil and Folha de S. Paulo. He had an excellent knowledge of the capital markets, corporate earnings, macroeconomics and the like, and looked to be heading for a stellar career.

So Aith goes looking for evidence to support the dossier, and quickly finds out that it is a forgery. This in itself would make a good story.

The original dossier was prepared by Frank Holder, ex-CIA and a Latin America specialist who left government service to set up his own shop — Holder Associates – a business later acquired by Kroll.

Aith went looking for Holder in Switzerland. Holder told him that the list was the fruit of an Italian investigation into the Brazilian part of the Parmalat scandal. Aith tracked down Italian police officials in Milan, but they said they knew nothing of the matter.

Holder then changed his tune, saying that the dossier was prepared by the Argentine José Luiz Manzano, a former minister and, according to Aith, a living symbol of the corruption of the  Menen regime.

Aith tracked down Manzano, who confirmed the authenticity of the dossier and ordered aides to collect more data. The resulting article material was full of inconsistencies. The article was a new Caymans Dossier.

The reference is to  elaborate, but on closer inspection clumsy attack on the PSDB and its leadership during the elections of 1998

Aith had enough info now to guarantee him an Esso

But there is a rule of journalism: When the sources is trying to fool the reporter, the reporter has the obligation to out him by name.  But Eurípedes resisted released the name of Dantes. There was internal debate. There was no way to get around Aith’s finding, but on the other hand, Eurípedes wanted to defend his ally.

Aith wound up giving in. On one hand, he admitted that Dantas was his source. But the efforts to spare Dantes and his reputation turned the article into a «pterodactyl» — an ugly creature, designed by committee.

Aith had committed the error of a lifetime in letting his byline go on the Swiss dossier story. …

The story began with the cover. The headline made no mention of the dossier or its lack of authenticity. On the contrary, the forgery was presented as though it were real:

“Daniel Dantas: banker and suicide-bomber. In his arsenal, the number of Lula’s supposed offshore bank account.

The headline made no sense at all. Aith’s investigations had turned up no such thing — in fact, he had found it to be a fraudulent document cooked up by Dantas.

But the “lead” was even more incredible:

“Daniel Dantas is preparing to open a new chapter in the investigations into the “criminal organization” that has taken over the government and caused so many problems for Brazil …

The lead paragraph, rather than featuring Aith’s scoop –the discovery of a phony dossier – said:

“On the floor of the Senate, Arthur Virgílio (PSDB-AM) revealed the contents of a document in which Banco Opportunity, controlled by Dantas, said it was being persecuted by the Lula government because he refused to pay bribes of tens of millions of dollars to the PT in 2002 and 2003.

Veja editorialized on several occasions in favor of this “political persecution” theory, which formed a cornerstone of the banker’s defense in Manhattan Federal Court against the Citigroup suit.

The letter, written by Dantas attorneys and filed with the New York court where the banker was being sued by Citigroup for fraud and negligence, is merely the beginning of a soap opera that, judging by the story of Dantas’ life, will be much more than a simple shakedown.”

And on and on it goes. Charlie Waterfall wants to promote a model of new school construction, so Veja cooks up a massive special issue on the subject, pure puff. Abril further consolidates the textbook business with Ática-Scipione and suddenly competitors are the target of campaigns accusing them of “communist indoctrination.”

I s**t you not. Unbelievable.

IstoÉ also finds itself criticized as a rent-a-byline disinformation pipeline

Risco Brasil | Courts Uphold Derivatives Contracts

The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so  far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are  potentially lethal. –Warren Buffet 2002

“It’s an established fact: corporate governance in Brazil is divided into two periods: before the derivatives scandal and after it.” –Rodrigo Zeidan, Fundação Dom Cabral.

According to research performed for the Folha de S. Paulo — and not, for some reason, by the FSP — courts are tending to uphold the caveat emptor school of thought on the subject of

I translate. Author: Adriana Aguia, Valor Econômico Portal ClippingMP.

The exchange-rate derivative contracts that pressured the finances of such major business groups as Sadia, Aracruz e Votorantim, causing billions of dollars in damage during the panic of 2008, are now being  recognized as valid by the Brazilian judiciary.

During the 15 minutes of fame generated by the Aracruz and Votorantim “too big to fail” derivatives cases, Brazil’s SEC, the CVM created and issued a new accounting form — above — in which derivatives contracts would be reflected on an appendix to the quarterly books.

In 2010, CVM issued Instruction 486/10,

which deals with the execution and clearing of derivatives contracts negotiated or registered in organized trading venues: the stock market, the commodity and futures market, and the organized OTC.  The main objective of Instruction 486/10 is to support information-sharing on derivative transactions conducted in the market or in an OTC by the oversight bodies of the stock, commodities and futures exchanges, in keeping with certain recent and unprecedented tendencies in the Brazilian market. Continue reading

Burning Down the Shantytowns | Where There’s Fire, Blowing Smoke

The fires are happening next door to urban renewal projects in areas where real estate prices are booming. And where there are no fires, there is police violence in support of repossesions.

SÃO PAULO, SAMBODIA | Today’s clipping in PT-BR > EN-US translation.

First, studies point to correlations between a mysterious wave of fires and areas of active real estate arbitrage — taken as a more plausible explanation than the city administration’s citation of unseasonably dry weather.

Source: ANDRÉ DELFINO DA SILVA and RAIMUNDO BONFIM, Folha de S.Paulo, 25 September, p. 2. Defino represents the MDF, the Favela Defense Movement.

Secondly, tracking campaign contributions by real estate and housing companies and lobbying groups to lawmakers charged with investigating the fires.

Source: Carta Maior, 27 September 2012.

Moinho is Latest in Wave of Suspicious Shantytown Fires

The September 17 fire in the Moinho shantytown, in the São Paulo city center, was the latest in a series of tragedies. Continue reading

Rio | Militias In An Election Year

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Above: A Rio van service van is discovered with 10 black-clad, combat boot-wearing anonymous corpses, ca. 2007

Folhapress. reports.

SÃO PAULO, SP, 30 August (Folhapress) –  Marcelo Freixo, PSOL mayoral candidate in Rio de Janeiro, said today that the sitting mayor, Eduardo Paes (PMDB) has members of militia groups among his base of support.

According to Freixo, municipal legislators in Paes’s base of support have ties to these groups. In Freixo’s view, the militia, unlike the drug trade, is the only form of organized crime able to translate teritorial domination into political gains.

“I have a photo of the mayor with various van service owners, many of them now under indictment, in prison, or dead. There are a number of city aldermen allied with the mayor who have militia ties. Just look at what parties these people run for office under,”  Freixo said during an elections interview with Folha/ UOL.

One of the most dramatic cases in recent years was the falling out among militias tied to the DEM-PFL and others tied to the PMDB in the Western Zone of Rio.

A top aide to the state judicial police commissioner was assassinated, and fingers pointed to a city alderman known for his ties to a militia called the Justice League — a bent cop called Batman its heaviest hitter

At the same time, the struggle for control of van routes led to such incidents as a VW van stuffed with black-clad corpses.


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R7 To Translate New York Times Content

The Record network of Brazil — a heavily bankrolled wannabe rival to the dominant Globo media empire — announces the signing of a content sharing agreement with the New York Times.

Source: R7.

In 2008, the metrosexual Folha de S. Paulo — its content is used to stock the UOL portal as Record and Globo do the R7 and G1 portals — entered into a similar, and not uncontroversial, agreement with the Gray Lady.

Folha ombudsman Suzana Singer — the admirable Suzana Singer — commented in June on the «imported from the Times» paywall model.

The Carta Capital newsweekly has a similar arrangement with The Economist, despite some divergences in policy viewpoints.

Does this mean that Times correspondent Simon Romero will be reduced to translating the reporting of the Folha‘s Lilian Christofoletti?

Note to self, gin up a matrix of content partnerships of this kind.

The Grupo Abril — which began life as a local franchise of Disney cartoons — has long developed Brazilian franchises of U.S. magazine titles, everything from Playboy to  National Geographic. Big publishing has resisted protectionist efforts designed to stimulate media and entertainment production at home.

In any event,

The R7 news portal has signed a content partnership with  The New York Times. Internauts will find articles from the North American daily on the R7 Web site.

«Internaut» is a word that deserves to be absorbed into English. Continue reading

Voz do Brasil | «Authoritarian Hangover»?

Comunique-se reports

One of Brazil’s oldest radio programs, «A Voz do Brasil», is an authoritarian hangover, and commercial radio stations should not be required to air its content.

Broadcasters are also chronically unhappy with the law requiring them to make way for unpaid election campaigning during this year’s election cycle — a step in the direction of election reform, although not a terribly effective one so long as the more fundamental reform of campaign is not enacted and empowered.

This proposition was the subject of heated debate at an August 23 event at the ESPM — Escola Superior de Propaganda e Marketing — among the directors of radio stations Bandeirantes, Estadão/ESPN and Jovem Pan.

Rodrigo Neves, Acácio Costa and Paulo Machado de Carvalho Neto, respectively, argued that requiring stations to air this content interferes with the services the stations provide.

A «heated debate» in which all participants agree on the fundamental question? Continue reading

Diplomatic Crisis | Credentials and the Brazilian Citizen Journo

«Journalism is a social asset too important to leave to journalists with diplomas.» — Lúcia Guimarães

The specter of Jeff Gannon haunts the practice of journalism in Brazil.

The arch-conservative blogger made a name for himself — a pseudonym, at any rate — as the holder of a White House press corps credential who was sharply  questioned by colleagues for serving up softball questions that POTUS could hit out of the park.

A classic example was

“How are you going to work with [Senate Democratic leaders] who seem to have divorced themselves from reality?”

A parallel case in Brazil — mutatis mutandis — might be the end-of-the-mandate interviews granted by President Lula to a self-declared group of «progressive bloggers» who engaged in fierce intellectual combat with an unfriendly mainstream media in support of his government.

Also in Brazil, several states have now made academic credentials obligatory for professional journalists, and the Senate passed a similar bill on August 7. Would this law oblige news organizations to justify their hiring to some government agency?

At any rate, the national union of journalists — the job category encompasses public relations as well — is adamant in its support for the diploma.

I simply cannot understand this position, probably because I have yet to fathom Brazilian labor law in general. It seems to me, however, that requiring the licensing of professionals by a government agency — the Ministry of Education — is a potential blow to journalistic independence.

It has already led to a grotesque outcome in the case of an unlicensed  São Paulo journalist Luiz Carlos Barbon in 2007. At the time, Fenaj had to explain why it did not consider the slaying as the murder of a journalist, suitable for inclusion in the roll of fallen journos.

Barbon was self-schooled and unlicensed, but published reports  leading to the imprisonment of corrupt local officials for sex trafficking.

In that context,

Lúcia Guimarães writes for the Estado de S. Paulo, and I translate a passage or three, Continue reading

Nelson Pretto | Why No Brazilian Laptop Per Child?

Why has the One Laptop Per Child | OLPC program apparently failed to take root in Brazil? I have always assumed a link between Brazilian intransigence and vicious lobbying by the chief Big Tech philanthropic foundation.

In any case, Nelson Pretto of Terra Magazine offers the following analysis. Pretto is professor of education at the Federal University of Bahia and a member of the Bahian Academy of Sciences.

Pretto took part in the panel on promotion of domestically produced content and technology at the recent Brazilian Internet Forum II.

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