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Delta Force | A Billion-Real Lobby?

“Supreme Court justice received donations from the Marcos Valério money laundering scheme” — CartaCapital accuses

The construction firm Delta is the largest single contractor in the Brazilian PAC, the federal «growth acceleration» program.

The construction firm Delta has been implicated in the «Charlie Waterfall» affair, currently under investigation by a joint comission of the federal legislature.

For some reason, these fresh facts have not erupted into a media scandal — partly because the congressional commission empaneled to look into the case is in recess during the period leading up to the October midterm elections.

… and partly because it is in the interest of no one to argue that corruption is rampant, rather than that the custo Brasil — risks inherent to the Brazilian business environment —  is being actively confronted and making progress.

That is why the Lula and Dilma governments have received high marks from international observers for their campaigns against corruption and white-collar financial crimes.

A 2009 English-language presentation by the federal Comptroller General — CGU — outlines new legislation passed in recent years and outlines future priorities. The CGU has done an impressive job since its inauguration under Lula I. Or at least I have been impressed!

It may also be an opportune time to shift focus away from new revelations because the ruling PSDB in São Paulo may have signed funky contracts with Delta as well. Emblematic: The Big Dig-delayed cleanup of the Tiete River. The stench of sulphur abides. This I have witnessed myself.

Delta has reportedly been quitely withdrawing from its current federal contracts in order to avoid the spotlight. The government may move to ban it from future bid solicitations.

Source: Correio Braziliense, via Brasilianas.Org. My translation:

The «Deltaduto», a campaign finance channel that funneled million-dollar payouts from the construction firm Delta to 18 fictitious corporations identified by the parliamentary investigation of numbers racketeer Charlie Waterfall — Carlinhos Cachoeira — involves sums totaling at least R$ 421 million. This figure may soon double when more up-to-date figures are obtained by the commission.

The commission’s reporter, Odair Cunha (PT-MG), said yesterday that he will present a complete accounting of the criminal conspiracy’s financial activity in the first week of October.

Cross-referencing of documents seized in the case indicate that a significant portion of this money was withdrawn in June, September and October 2010, before the election. The amount paid out exceeds that identified in the case of the «monthly payola of the PT» case. “We are seeing that nearly 30% of the withdrawals were not identified and that some 27% of the credits display irregularities. For this reason, the final tally could be much larger. We are going to present a statistical study of the entire set of transactions. We intend to finish the report by September 30,” the congressmenber said.

… When the commissions returns from recess, one of its priorities will be to subpoena the banking records of 12 supposed suppliers that received money from Delta. The company that received the most from Delta got R$ 46 million. What catches the eye is that these ghost corporations received hefty payouts but reported almost no gross income.

Adécio & Rafael Construções e Incorporações Ltda., for example, showed significant financial volume in 2010, when it was founded, it reported gross income of only  R$ 29,800. Also, it never reported a single debit on its tax form and reported no labor costs.

Yesterday, Senator Alvaro Dias (PSDB) argued that the CPI should prioritize the financial records of all the parties involved.“Obviously the confidentiality of their financial records should be broken. To date, we have been able to determine that payouts by the companies whose finances we have already studied  were destined in large part to political campaign finance,” Dias said. According to the senator, of the 18 companies identified, only six have had their financials unsealed. “The challenge he is to subpoena the finances of companies headquartered in the Brazilian Southeast. There is a lot of money being withdrawn from the cashier’s window,” he said.

The CPI found that these companies have not performed any services or sold any finished goods. None of them pay taxes and none of them has employees. One of the most interesting cases is the construction company Miranda e Silva Construções e Terraplenagem Ltda. The company received  R$ 12 million from Delta, but no records of its financial history exist. Tomorrow, the PSDB congressional leadership promises to deliver a report detailing Delta’s offshore deposits.

In early August, this newspaper revealed the existence of confidential documents indicating that Delta had transferred, in 2011 alone, some R$ 85 million to accounts in the Cayman Islands …

Its financial data shows three large deposits. The first took place on March 28, 2011, when Delta deposited R$40 million with Banco Safra. In December 2011, two transfers were made, the first for R$ 45 million and the second for R$ 609,000. In the commission’s report, these sums are accounted for in dollars, then converted into Brazilian reais using the current exchange rate as published by the Banco Central.

The data also disclose the movement of large sums by the criminal organization of numbers boss Carlos Augusto Ramos, aka «Charlie Waterfall», to offshore banks.

Waterfall himself made more than R$ 1.5 million in deposits to various accounts. During a commssion hearing, Delta CEO Fernando Cavendish invoked his right to remain silent and was immediately dismissed. Cavendish was aided by a write of habeas corpus issued by the Supreme Court

 

For comparison’s sake, I like to recount for friends the rise and fall of Jack Abramoff — an episode that probably would not have turned out as it did under the old Brazilian system of enforcement. Lobbying is still a largely unregulated activity. Data on who really gave what to whom in return for what, in electoral politics, remains hard to research.

What Jack and the Waterfall mainly have in common, anyway, is the push to legalize  gambling. As to junketeering and quid pro quo arrangements with lawmakers, it is hard to say at this point, although I think I have read something about Waterfall giving a ride to a federal senator on a jet chartered for R$ 3,000 and headed for Germany.