The Bugging of BNDES: “Cardoso Does Not Come Out Smelling Like a Rose-o”

The plot so far: In late 1998 and early 1999, here in Brazil, a media scandal erupts over alleged “steering” of the federal auctions that privatized the Telebrás state telephone monopoly.

Was the scandal authentic or phony (pardon the pun)?

Ten years later, nothing has been revealed, as Elvira Lobato of the Folha de S. Paulo noted recently, in one of those “ten years later, doubts still linger” sorts of pieces.

Specifically, the Minister of Communications — later, the publisher of Primeira Leitura magazine, edited by Reinaldo Azevedo, which failed in the wake of the Nossa Caixa political payola flap (also still murky after all these years) — and the president of the Banco do Brasil were charged with being overly chummy with one bidder in particular, and working to steer the auction toward that group. As Época magazine wrote in May 1999:

The efforts of these two were to make sure the gavel banged for the Banco Opportunity, anointed by the technical pedigree of Telecom Italia (its partner). Suspicions about the case widened in light of the solid relationships among persons who at that moment were on opposite sides of the auction block. Lara Resende is a friend and business partner of then Opportunity director Persio Arida, who in turn is married to Elena Landau, also a friend of Lara Resende. At the time, she worked at her husband’s bank, focusing precisely on the telecoms project.

Incest is best. For Pérsio Arida, read “former BNDES and Central Bank president Pérsio Arida.”

Both men lost their jobs in the government over the flap, which was based on leaked illegal wiretaps of their phone conversations around the time of the auctions.

The issue of the allegedly “steered” auction hovers over the pending merger of two of the private groups created by the privatization: Oi (ex-Telemar) and Brasil Telecom.

It also acquires fresh relevance with the first criminal conviction of Banco Opportunity founder Daniel Dantas, on bribery charges. He was found guilty of and sentenced to ten years for bribery of a federal police officer. See

• Dantas’ Inferno: “Fall of an Opportunist”
• The Dantas Defense: Just Because You’re Paranoid Doesn’t Mean They’re Not Out to Get You
• Dantas’ Inferno: “Scam Jam Leads to Uncle Sam Exam”
• Dantas’ Inferno: “Convicted of Corruption”

I have been translating this piece from the 1999 issue of Época to my notes just to refresh my memory of the basic facts at issue here. The first installment:

• The BNDES Bug: Did Dantas Deal From a Marked Deck?

As I said before, the second installment involves the reaction by President Cardoso to the involvement of his name in the scandal. At the time, the Opposition (the PT, the party of President Lula and therefore now the Situation) were talking about impeachment.

The probity of Cardoso’s PSDB during the same period has also been called into question recently by a criminal money laundering case brought against its former national president, Eduardo Azeredo — members of the PT were later accused of using the exact same “political slush fund pipeline” — and indications from French and Swiss prosecutors that multinational mass-transit contractor Alstom paid bribes to PSDB officials to secure contracts in São Paulo.

The continuation of the Época piece, under the rubric of “the other side,” presents the government’s side of the case:

“I demand respect”

Involved in the intrigues of the privatization, the president takes the field to defend his honor

Buoying BrOI: ANATEL Sessions on Concession Progression

BrOI. Source: Convergência Digital. Merger requires overhaul of federal regulation of broadcast concessions. Expect a human cockfight, with eye-gouging and ear-biting, over the issue.

DCI: Comércio, Indústria & Serviços (Brazil), a fine little business daily here, evaluates the strategic outlook for changes to the regulatory framework for “digital convergence” here in Brazil.

File this under “things I do not yet understand very well, but am trying to.”

Maybe the report will reach some reader who does have a better idea of what all of this signifies.

The PGO, the federal “general plan of [broadcast] concessions,” must be amended in order for the merger between Brasil Telecom and Oi (ex-Telemar) to go through. Currently, no two regional telephone operators may merge (much as no two Baby Bells were allowed to merge after the break-up of AT&T — at least for a while there).

See also

• CartaCapital: No Joy Over BrOI
• BrOI: Done (Potential) Deal
• BrOI: Material Events
• Non-Event of the Month: BrT-Oi Merger?
• What’s Cooking at Anatel? Time Will Tell

Telecoms will increase pressure against new concession plan

Victor Hugo Alves

SÃO PAULO – The chilly silence of fixed-line telephone operators like Telefônica, Oi (ex-Telemar), Embratel and Brasil Telecom during the first public hearing on the Plano Geral de Outorgas (“general concession plan,” or PGO), held in Brasília … will not last. The telecoms are starting to compare notes on their questions and criticisms about the policy. These should start to be voiced in the next public hearing, scheduled for July 7 in São Paulo, where the telecoms will exprss their opposition to certain provisions of the PGO in a bid to overturn the rule requiring fixed telephony and broadband operations to be carried on by distinct companies.

Another important fact is that after receiving many petitions on the subject, the National telecommunications Agency (Anatel) has put the issue of extending the period of pubic comment on the PGO on the agenda for its meeting today. According to a source close to the matter, the Anatel board will likely grant the extension, the only question being whether the extension will be for 15 or 30 days. “The tendency points to an extension of the period for public consultations. It’s just a matter of whether they will extend it for 15 or 30 days”. With an extension of the comment period, new public hearings should be scheduled on issues not yet taken up, such as the situation of the Brazilian South, a topic all of the Anatel advisory board members would like to see debated.