Dantas’ Inferno: Ten Years After the BNDES Bugs

A story by Elvira Lobato of the Folha de São Paulo, published 9 November 2008, reminds me that, the more I study the matter, the less I know about this Daniel Dantas fellow and his dealings.

The MIT-trained investment banker and former financial brains of Carlismo was just recently convicted of bribery, and sentenced to 10 years. He is free pending appeal. He faces further prosecutions for financial fraud, tax evasion, industrial espionage and money laundering.

Now, then: In 1998 and 1999, a massive media scandal broke out when fragments of wiretap transcripts were published in which senior government officials appear to discuss steering the results of the Telebrás privatization auction.

As a result, a cabinet minister lost his job: Luiz Carlos Mendonça de Barros, minister of communications. As did BNDES president André Lara Resende.

(Mendonça de Barros, who is overheard on the tapes maneuvering to favor the Dantas group, is now in the publishing business, with Analise Editorial.

He had previously founded Primeira Leitura, edited by Reinaldo Azevedo of Veja magazine — which folded amid a greasy little political payola scandal.)

In the most controversial of these fragments, President Cardoso is heard “authorizing the use of his name” in order to procure the backing of a major pension fund for Opportunity, Dantas’ group, in its bid for Brasil Telecom.

ABIN spies were accused of conducting the bugging on official orders — it is not clear whose.

If the plot sounds familiar — in the current flap over Dantas, Veja magazine has published an (unsubstantiated) charge that ABIN had been ordered (by the judge presiding over the Dantas trial, or the investigator in the case, it is implied) to bug the Chief Justice of the Supreme Court.

Brazilian politics are like Brazilian soap operas: The plots get recycled a lot.

I recently came across what looks like an interesting book on the episode (above) and ordered it up from an online sebo in Porto Alegre, which is SEDEXing it to me as we speak:

O Grampo no BNDES: Quando o complemento do ABIN é a mídia oficiosa

“The bugging of BNDES: When a compliant media aids and abets ABIN.”

I have no idea whether it is any good or not. I am just looking for a coherent account of the entire episode that I can start from.

Let me first translate this recent reporting from (the deservedly prize-winning) Lobato, which includes a main article and an interview with one of the men convicted of carrying out the bugs.

After, I have translated some of the original scandal-mongering from Época magazine in 1999, and will post that. Elvira Lobato:

Ten years after the discover of telephone wiretaps inside the Brazilian Development Bank (BNDES), the two administrative misconduct proceedings proposed by the Federal Public Ministry in its investigation of eventual irregularities of the privatization of Telebrás have gone nowhere.

The only proceeding that has moved forward has been the criminal charge against two men accused of executing the bug. Found guilty on appeal were Temilson Antônio Barreto de Resende, an employee of the Brazilian National Intelligence Agency (ABIN) in Rio de Janeiro, and former soldier and spy Adilson Alcântara de Matos. The case is being appealed to the next-highest federal appeals court, the STJ. The two men deny taking part in any wiretapping.

The men were accused by Época magazine and others in 1999.