“CADE Case is Political Persecution”

Source: Folha de S.Paulo

Topic: CADE — in charge of the Siemens bribery case here in São Paulo — has taken on the aspects of a political police, says local establishment

Translation: C. Brayton

In my experience, the local government — the Toucans of the PSDB for the last 20 years — can be relied upon to quickly and vociferously allege  “political persecution” in circumstances such as these.

The state government of  São Paulo today accused the federal antitrust authority CADE of acting as an “instrument of political police” in order to undermine officials of the PSDB.

The Folha revealed today that the German multinational Siemens presented Brazilian authorities in which it states that the government of São Paulo knew of and lent support to the formation of a cartel in bids on projects related to the subway and metro rail systems.

Siemens said that negotiations with representatives of the state are registered in “diaries” handed over to CADE by the company. CADE, the Administrative Council of Economic Defense, is an independent agency with ties to the Ministry of Justice.

Question about whether the government knew of the formation of a cartel, the chief of staff of the Alckmin government, Edson Aparecido (PSDB), said the charge was “pure slander”.

“What we are seeing is the undermiing of an important agency that exists to guarantee free competition but which has become an instrument of political police. The memory of Mario Covas has been smeared.”

Aparecido, assigned to respond to the accusations on behalf of governor  Geraldo Alckmin, repeated the governor’s statement that no one has more interest in clarifying the case than his  government. He also said that CADE has denied having access to the information in the case and is engaged in “selective leaking” of the accusations to the press.

The state prosecutor will file for a warrant that will enable it to obtain a copy of the documents in the possession of CADE.

PROTESTS

The state judicial police this morning release 13 persons detained last night during protests against the Alckmin government,. All were interrogate and left the 78th Precinct without having to put up bail.

The SSP — secretariate of public safety — could not say what suspected crimes led to the arrests.

CADE Statement

The antitrust authority released the following statement:

At the current stage of the investigation, it is not possible to determine the scope of the alleged cartel operating in bids for the acquisition of train cars, maintenance and construction of railways and subways in Brazil. The administrative inquiry conduccted by the Superintendent-General is a preliminary investigation. Only after analyzing all the material apprehended during the search and seizure operation of July 4  will it be possible to name the companies and persons involved, as well as the projects and cities affected and the period during which the cartel operated.

The administrative inquiry in the case is confidential, because the plea bargain is protected by legal confidentiality and the warrants for the search and seizure in Operation Crossed Line are protected by a gag order.

Globodebt | New Documents From O Cafezinho

A follow-up to

• Globo and the Missing R$ 600 Million

With the support of other “progressive bloggers” — several of them, it should be noted, professionals and fellow travelers of the rival Record network — the author of O Cafezinho has been reporting on a huge tax evasion and money laundering case involving the Globo network.

Record’s evening news broadcast has run several extensive — 5 minute — reports on the case.

More pages from the federal tax authority report on the millions in taxes avoided by the Globo network have leaked. This blog, O Cafezinho, once more publishes this material obtained at first hand.

The new pages reflect the tax authority’s final decision, in which it condemns Globo to pay a 150% fine, plus past-due interest, on the amount not duly reported. It is important to note the date of this document: December 21, 2006. Some days later, these documents would be stolen by civil servant Cristina Maris Meinick Ribeiro.

In the document, the auditors vote unanimously for the guilt of the defendant and give Globo 30 days to pay the debt, unless it appeals to the Conselho de Contribuintes — Taxpayer Council — within the same period.

The theft of the case file just a few days later allowed Globo to delay the renegotiation of this debt considerably.

See also Globopar and the Virgins | Material Events

This information places more pressure on the federal prosecutor. Why did it not probe the theft of these documents more thoroughly? Why did it not explore the connection between the theft of documents and the act of tax evasion in itself?

Both of these are part of the same crime, stemming from the same desire to cheat the national treasury. Prosecutors should have investigated obvious suspicions about the principal interested party: Globo.

In one of its responses, Globo mentioned debts that it was renegotiating with the Taxpayer Council. The evidence leads us to believe that Globo did appeal to the Council, which includes representatives of private-sector companies among its members. Once again, we are presented with a nebulous situation.

Globo said it paid the debt through the Refis — Fiscal Recovery — program in 2009.

But how can that be? On December 21, 2006, the tax authority granted Globo only 30 days, on pain of enforced  recovery, to pay or appeal to the Council.

Did it appeal? How many  months of breathing space did it gain with the theft What did the Council decide? Who were the members of the Council at the time?

Most importantly: With the appearance of these fresh documents, the media can no longer refer to the “alleged” evasion of taxes. They show that the auditors were unanimous in finding the company guilty.

The federal deputy hown about, beinterviewed about his attempts to investigate Globo in the Congress, is Protôgenes Queiroz, a former federal police agent and now a deputy for the Communist Party of Brazil (PCdoB).

Queiroz figured prominently in a battle royale over bribery and market manipulation in the process leading to the privatization of telecoms in the 1990s. His  English-language Wikipedia bio is not bad, but it is out of date. He has since been elected to Congress, for example.

Siemens | “Press Opens Eye”

Source: Observatório da Imprensa | Radio commentary

By: Luciano Martins Costa

Date: 07/30/13

Translation: C. Brayton

See also

• Folha de S. Paulo: Selective Affinities in Siemens Case

The traditional Brazilian media, or part of it, at least,  surprised the attentive reader on July 30 when it began to pay some attention to the payment of bribes to influence competitive bidding on public transportation systems in São Paulo and Brasília. The newspapers have begun, discreetly, here and there, to touch upon issues peripheral to the main allegation, although they still avoid pointing directly to the evidence of an official scheme involving senior officials.

In its “Metrópole” section — buried deep in the paper, a long way from the political news section, which treats scandals much more thoroughly, the Estado de S.Paulo reports that the state prosecutor will ask German and Swiss judges for copies of documents obtained from executives of Siemens, which confesses to the payment of bribes to “public agents” of the S. Paulo government. Phrased with the delicacy of a papal homily, the paper describes “indicators of alleged payment of bribes,” adding that “prosecutors also suspect money laundering.” …

The existence of a Swiss bank account and testimony from Siemens execs describing bribes paid to directors of the CMTP and Metrô has been established by prosecutrs. What is needed now is to find the connection between these deposits and the continuity of the criminal scheme, which allegedly began during the Covas years  (1995-2001) and evolved during the governorships of Geraldo Alckmin (2001-2006) and José Serra (2007-2010).

During the election year 2006, I think it was, Serra was the target of a media campaign accusing him of involvement in a similar scheme having to do with the delivery of ambulances to rural townships.

The “evidence” against him was that he had been photographed, as Secretary of Health, at some ribbon-cutting ceremony, — looking weary, a a Gulfstream-trotting minister should — with a mastermind of the scheme.

The scandalization of the episode had some interesting sidebars — a surreal scene in which activists were arrested trying to buy the “dossier” — but was essentially bogus at birth, and possibly an example of political “friendly fire.”

Along with the signs that state prosecutors are taking the case seriously, the investigation is also being looked into by the federal prosecutor.

There is much more here than simply signs of a formation of a cartel, as the papers cautiously describe it. There are traces of a criminal scheme that endured for nearly 20 years during governorships of the PSDGB, a fact that renders irrelevant the declaration of the sitting governor, Geraldo Alckmin, to the Estado, that he is “the  person most interested in shining light on the case and reimbursing the public coffers.”

If over the course of two decades successive PSDB governors have not been capable of even suspecting the misconduct in question, they were either accomplices in the scheme or they were negligent. There is no term in the journalistic lexicon to disguise this fact.

Human Development

Another topic that may surprise the reader of the Tuesday papers is the coverage of IDHM — the Municipal Index of Human Development a study based on the Atlas of Human Development created by the UN in Brazil in 2013. The study shows that in the past twenty years, the quality of life in Brazilian townships has improved 47.5% on average, improving from “very low” to “high.”

In 1991, the Brazilian cities with populations living in poverty was 85.8% of the total. In 2010, this percentage had fallen to 0.6% of the municipalities. …

The greatest lack continues to be the quality of education, which is considered the principal hindrance to the improvement of other indicators, such as income, health and infant mortality in places where poverty persists. Even so, the study shows an increase of  128% in the Human Development Education Index in Brazilian cities … Thus, despite these advances, there is no doubt that this is the Achilles’ heel of contemporary Brazil.

Newspapers should treat these indicators with an approach they generally avoid when analyzing the economic scenario, for example.

Social indicators only make sense in the long run, when policy hits and misses can be observed. What was novel about Tuesday’s edition was that some columnists, who guarantee their space in the opinion making class denying the value of social policies resulting in income transfer, found themselves obliged to admit that something truly original is happening in the area of social inclusion.

It is interesting to see that the generation most benefited by the phenomenon is the same generation promoting massive protests that paralyze Brazilian cities.  It is necessary to realize that these protestors are ignorant about the Brazil that existed when they were born, or, if they are aware of it, are calling for more …

Siemens & The Grand Solution | Folha de S. Paulo

The Folha de S.Paulo has taken criticism for failing to follow up on its coverage of the Siemens cartel scandal.

It follows up today with an infographic-driven story that advances the plot somewhat, with the introduction of a fresh levy of documents. Other major news organizations continue to lay off the story.

German multinational Siemens has presented Brazilian officials with documents in which it affirms that the government of São Paulo knew of and gave its official guarantee to the formation of a cartel in auctions for railway projects in the state.

The negotiation with representatives of the states, Siemens said, is represented in “diaries” which the company delivered to Cade, the antitrust authority.

Last month, the engineering giant blew the whistle on  the existence of a cartel — in which it took part — for the purchase of railway equipment and the construction and maintenance of commuter rail and subway lines in S.  Paulo and the federal district.

In exchange, the company signed a plea bargain document that could grant it leniency in the event the cartel is confirmed and punished.

The formation of a cartel for Line 5 of the S.Paulo subway, Siemens says, took place in 2000, when the state was  governed by Mário Covas, who died the following year.

Cade says that the collusion continued through the governorship of  Geraldo Alckmin (2001-2006) and the first year in office of José Serra, in 2007.

Secretary of transport during the Covas administration, between 1995 and 2001, Cláudio de Senna Frederico stated he had no knowledge of the formation of a cartel, but that he did not discard the possibility. “I don’t remember a genuinely competitive bidding process,” he said.

The Alckmin government said that, if the cartel is proven, he will call for the punishment of those involved. Serra could not be located for comment.

The Siemens document reflects an alleged guarantee by the government in favor of a an arrangement among the companies to divide up the Line 5 project, which involved a stretch currently in service.

Known as the  “grand solution,” the proposed joint action, according to the Siemens papers, was the secretary of transportation”s preferred outcome because it offered “peace of mind  in the competition.”

The scheme consisted in forming a single consortium in order to win the bid, which would then subcontract to losing bidders. This is, in fact, what actually happened.

In the document, dated February 2000,  Siemens execs describe planning meetings  for the scheme.

In one such meeting, it is reported that “supplying  the train cars was organized as a ‘political’ consortium, so the price was very high.”

“A consortium agreed upon beforehand, then, is a very good thing for all parties,” says one Siemens exec.

Siemens said that an illicit accord allowed it to inflate by 30% the price paid in another auction for maintenance of commuter rail trains of the CPTM.

Click to zoom-resize

In the meantime, Veja columnist Ricardo Setti pleads with the news media not to turn the case into a “high-tech lynching” of the innocent.

This case is important as well because so long as generic accusations are floated about criminal misuse of public funds during the Covas and Alckmin government — who might be perfectly innocent of all of this — theirs will be the only names in the spotlight.

Coming from Veja — the Ku Klux Klan of media lynching — this is truly rich. As Edu Guimarães writes,

It is scandalous how the tone of this column constrasts with what the same columnist wrote about the “monthly payola” and the PT.

This is cynical in the extremee. Since when have the honorable public lives of José Dirceu or   Lula protected them from “lynchings” and “whisper campaigns” launched by this man’s big boss after the “payola” case emerged?

Lula, who has not a single ethical misdeed to his name, is treated by Setti and company as a criminal. Dirceu, not once involved in any scandal prior to the “payola” affair in 2005, was treated as guilty by Veja & Co. from the very start.

The worst thing is the way in which Setti’s modst plea for justice continues to cover for Serra, who belongs to that select group of PSDB governors who, over the past 20 years, oversaw the shameless plundering of the State and who ought to be made to answer apply the same “dominion of the fact” applied to Dirceu.

But Setti has forgotten about the “dominion of the fact”; in the case of Toucans, he calls for solid evidence while braying, “Lynching! Lynching!”

“Dominion of the fact” is a controversial legal principle used to convict Dirceu in the recent trial of AP 470, in the Supreme Court. Basically, it implies that administrative supervision of persons who misbehave makes the supervisor liable for those bad acts. Or something like that.