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Edu Guimarães | Globo Gets It Right



The day the Jornal Nacional — Globo’s primetime news hour — forgot itself and did itself proud.

Source: Blog da Cidadania | byEduardo Guimarães.

The news behind the news. The fact that yesterday’s Jornal Nacional aired  a report of nearly eight minutes in duration on the scandals involving the PSDB of São Paulo was more important than the content of the report itself. Those who follow political news already knew all the detailsfrom the press, the radio or the Internet.

Below, the report narrated by Willian Bonner and Patrícia Poeta in what might be the longest and most politically uncomfortable report aired by the network since the PSDB came to power in 1995.  It is a long report, but if you did not have a chance to see it, you ought to at least read it, beause its content is as surprising as its extent.

I will return after reproducing a transcript of the report below.

Source: Jornal Nacional

Date: August  8, 2013

French firm suspected of bribing officials of PSDB governorships.

A French firm is suspected of payiing bribes to São Paulo state government officials in exchange for beneficial treatment during public auctions.

The case dates from 1998. 11 persons have been indicted, included former state secretaries from that era.

The payment of bribes allegedly occurred in order to facilitate a contract between Alstom and the EPTE — Energy Transmission Company of São Paulo, state-owned at the time..

According to a federal police inquiry, the energy company obtained credit from outside Brazil from French bank Societe Generale, in the amount of R$ 72.,7 million, in order to acquire equipment from the Alstom group.

The federal police point out that the contract for this significant credit was entered into without competition.  It was only possible because a Alstom mounted a bribery  scheme that paid off São Paulo civil servants in return for approval of the contract..

According the PF document, the bribery scheme used offshore persons and companies to receive funds from Alstom “which were then distributed to their beneficiary among civil servants of the State of São Paulo, during the first half of1998″.

At the time, the state was governed by Mário Covas of the PSDB. One of the accounts, according to the PF, belonged to Jorge Fagali Neto. The PF says that at the time, Fagati was finance director of the postal service but enjoyed free access to the state secretaries.

The PF also says that Fagali took part in the distribution of cash to public agents, owned an undeclared offshore account, and he hid the origin of the money received using bribes paid in other countries.  It was for this he was indicted.

Another offshore company used to launder money was MCA Uruguay.

According to an August 8 report by the Estado de São Paulo, “MCA owner Romeu Pinto Junior confessed to the PF that he had intermediated the payment of bribes to São Paulo officials on the orders of Alstom and using MCA.

The PF claim that Andrea Matarazzo, in his capacity as Energy Secretary and board chairman of EPTE, was fully aware of all of these dealings.

The investigation cites testimony from the current EPTE chairman, Henrique Fingermann. Henrique said that Andrea Matarazzo know of all the procedures that led tothe signing of the credit agreement with Societe Generale.

THe PF says there are indications that Matarazzo tenha benefited personally, as did his  party, the PSDB, from undue advantages engineered by Alstom.

The police have used this fact to indict Matarazzo for bribe-taking (passive corruption). The PF also indicted two ex-secretaries and another 11 persons in August 2012.

The case was forwarded to the federal prosecutor — MPF — but went nowhere because the MPF believed more information was needed in order to proceed.

The attorney representing EPTE says he has not had access to the PF inquiry, and argues that the statute of limitations has run out.

“For that reason, my clients should apply for a writ of habeas corpus,” he said.

The MPF believes the statute of limitations on the money laundering charges has yet to expire.

Former São Paulos energy secretary Andréa Matarazzo, said it was absurd to link his name with supposed bribery.  He said that during his time as secretary, he had no knowledge of , never discussed and never signed any additive or contract among those investigated. Matarazzo says that the minutes of board meetings will prove what he is saying. Matarazzo added that he is indignant and repulsed by having his name involved.

According to ex–postal service director Jorge Fagali Neto, the MPF has never accused him of any criminal act and that he never interacted with any of the companies cited or signed contracts with Alston

MCA Uruguay and form EPTE chairman Henrique Fingermanncould not reached for comment.

In a note, the PSDB declared that it vehemently denies any attempt by “certain sectors” to involve it and its members, without proof, in corruption cases. . The PSDB added that it does not tolerate corruption and that expects the cases to be investigated and the guilty to be punished.

José Serra is cited in messages by directors of a company involved in the cartel.

The“Folha de São Paulo” today reported that  former São Paulo governador, José Serra, of the PSDB, was mentioned in an exchange of e-mails among Siemens execus —  The Folha said that one of the messages suggested that Serra seemed to favor an accord among the competitors in an auction to sell trains to the state, in order to avoid delays.  Serra denied behaving improperly and says that Siemens received no special treatment.

The Folha de S.Paulo today reproduces an e-mail sent March 28, 2008 Nelson Marchetti, a Siemens official, to colleagues at the company, among them the president of the firm for Brazil at the time, Adilson Primo.

The message relates a conversation he said he had with Governor Serra and his secretary of metropolitan transport, José Luiz Portella, during a conference held in Amsterdam.

The Jornal Nacional também had accesss to the same e-mail, which says: “I would like to confirm that I spoke with Mr. Serra and Mr. Portella in Amsterdam last week, when Serra confirmed that if the proposal by CAF were disqualified, the auction would be cancelled.

According to the Folha de São Paulo, at the time, Siemens was competing CAF in an open auction for a contract with the CPTM — Companhia Paulista de Trens Metropolitanos — for the purchase of railway cars. Siemens threatened to question the results of the auction in court if not victorious

In the message, the executive discusses the reason for an eventual cancellation of the auction.  “The basic reason for taking this position is the difference in price between the CAF proposal and ours.  Ours is 15% higher than the net price offered by CAF. This could pose a risk to the Serra government .”

The “Folha de São Paulo” says that ex-governor Serra suggested to Siemens an accord in order to head off a major lawsuit over the CPTM contract. In the e-mail of the Siemens executive, this proposal was quite detailed.. “They mentioned that they would consider purchasing something like 30% of the trains from Siemens. The Folha suggests that “they” refers to Serra and Portella.

José Serra issued a statement saying the results of the auction destroyed the market hegemony of certain companies. Serra said that Siemens was not subcontracted by CAF, which won the contract. That is to say, according toSerra, Siemens was not benefited. Serra says he went so far as to declare in public that if the auction was annuled, the second-place competitor would not receive the contract because of the difference in prices.  And that a new auction would be held.. José Serra says that the state of São Paulo entered into a legal dispute with Siemens to guarantee the contract won by the Spanish group.  The note is also signed byJosé Luiz Portella.

Siemens once again said it is cooperating with authorities, but that it cannot comment on investigations underway at CADE, the antitrust authority.

Wow! The segment was not quite equal to that nearly 20-minute segment the JN ran on the PT during the trial “monthy payola” case …  It can be said, however, that contrary to its usual methods,the JN presents a journalistically correct story that touches upon all the elements in the case, incuding its effects on the Toucans.  Or nearly correct …

Yes, but the JN has very little to offer that was not already printed early in the day by the Folha and Estado

It is clear that what weighs on Serra is not his having interfered in a public auction in favor of one bidder in order to “avoid delays.” It seems as though interfered in the process by  instructuring the competitors to “make adjustments,”to the point that he advised one group that its bid was 15% over the first-place bidder — this is illegal and subverts the very principle of fair competition, which should avoid entering into such “adjustments”such as this in order to obtain better prices for the public coffers.

Still, since there  is still no proof that this occurred,  here comes theJornal Nacional with Serra’s response, not making it clear that this is his own version of the story and conflicts with what investigations have discovered.

In sum, a it was not a bad report.. One can even foregive the caution used in naming names in the cause of of the assumption of innocence — which applies to politicians, too.

But something is missing here. Some of these facts have been known for some time now.. The Alstomscandal was a universal topic of headlines in 2008, and until yesterday, TV Globo had never treated the story with this much emphasis. Even in the major dailies at the time the story occupied very little space, unlike the headlines of recent days.

To say that a story of this extent is proportional to the gravity of the topic is partially true.  There are other reasons.

A scandal within the scandal are the 45 investigations arising from accusations againt the PSDB-SP that were archived by the politically compromised MPE, which only reactivated the case under pressure from abroad: European multinationals bribe politicians in countries other than Brazil, but only in Brazil are news of these cases minimized or ignored.

Like the Toucans, the maor media and the MPE-SP are responsible for the impunity of politcians who are not being charged with buying votes in Congress to approve bills of interest to the government, as in the “monthly payola,” but are robbing the public coffers for their own benefit.

But let us return to the matter of the press, for now.

The infinite  protection offered by Globo and its holding company to its corrupt friends is provoking a growing irritation in society, which is turning against the mainstrream media in general and which has even attacked Globo with violence, with the damage done to mobile broadcast units of various networks and the expulsion of Globo reporters from the demonstrations, as well as damage done to the company’s real property and premises.

In this light, the recently born “impartiality” embraced by Globo may well stem from the fear of having surpassed the limits as it witnessses the progressive degradation of its public image, including the matter of its tax crimes — a problem them that may some day put it in the same position the PSDB finds itself.

Recently, I wrote, in “Concealing the Scandals: Globo and PSDB-Siemens, that things  had gone too far.

As we have seen, Globo’s conversion to a practicioner of the sort of quality journalism we see in this case — it may not be of the highest quality but is at least a vast improvement over the artillery of hysteria the JN has directed at the left since 1989 — is no mere crisis of conscience.


Alstom Case | The Parallel Inquiry


Source: Instituto Ethos

The governor of São Paulo now says he will name an independent commission to “accompany” the official investigation into the Siemens-Alstom cartel scheme.

The commission — dubbed TranSParência — will include “representatives of civil society” including Transparência Brasil, the OAB — Order of Brazilian Attorneys — and the Instituto Ethos, the latter a frequently cited talking head factory on matters of corporate social responsibility.

Transparência Brasil is a Ford Foundation-funded project in partnership with the UN Development Fund.

Instituto Ethos is an outlet for corporate social reponsibility partnered with

  1. Walmart Brasil
  2. Suzano
  3. CPFL
  4. Roland Berger
  5. Vale do Rio Doce
  6. Natura
  7. Alcoa

Ethos provides a long list of institutional partners ranging from NGOs like Greenpeace and the mega-NGO GIFE — mostly corporate foundations, it shares the title of “the Brazilian NGO of Brazilian NGOs” with ABONG — to labor federations such as CUT.

Ethos is chaired by Sérgio Ephim Mindlin, a board member of the Roberto Marinho Foundation and former director of the Fundação Telefónica. The use of NGOs as sub rosa lobbying vectors makes observing governance a difficult task here in Brazil.

Given its involvement — or rather, its multiple, networked involvements on various levels — the Instituto Ethos finds it necessary to issue a note clarifying its interests in the case with respect to Siemens.

Given recent reports about an alleged cartel in the area of trains and subway lines, we wish to clarify our partnership with Siemens.

In recent weeks, the press has published a series of reports on a CADE — [antitrust authority] — investigation into a supposed cartel in various Brazilian states, involving companies such as Alstom, Bombardier, CAF, Mitsui and Siemens, among others.

The Instituto Ethos comes forth to clarify the nature of the partnership we have developed since 2010 with Siemens.

The   Siemens Integrity Initiative funded the project Jogos Limpos Dentro e Fora dos Estádios — Fair Play Both On and Off the Field.

This partnership seeks to enter into integrity agreements with corporations and transparency agreements with governments, and offers tools for collective monitoring and social control of public investments, especially those used to stage the World Cup 2014 and the 2016 Olympics.

The accounts of the Jogos Limpos are audited annually by independent consultancy BDO and are publicly availalable.

TranSParência is not even a Web site yet — good luck getting the search engine to discern transparência from tranSParência … and technically speaking, the state government already has a transparency portal of its own.

I think Ethos should recuse itself, but hey, it is not like this is an official investigation, journalistic probe or anything. It is, rather a political stacked deck. It will be interesting to see if it creates buzz. Similar campaigns in the past — Cansei! — have not worked out well for the ruling Toucans.

The takeaway: a lot of power and infuence are channeled through NGOs here in Brazil. We will soon see “independent” talking heads promoting the viewpoint of the accused in this case. How will they fare?

The game begins with a solemn and statesmanlike pronouncement by ex-President Cardoso, a bnign figure with a certain gravitas, getting a little white around the muzzle:

— From what I have seen, there is no objective [to the investigation of PSDB members and officials]: the issue is to avoid the formation of a cartel. That is the position taken by the antitrust authority, CADE — said the former president,  after an event held at the Copacabana Palace by the Rio de Janeiro medical community, early Friday. – There is no accusation that the São Paulo government was favored or that any PSDB politician was benefited. There is a lot of buzz but very little concrete information. Care should be taken.

Cardoso points to corporate governance NGOs as a useful response to the problem of corruption.

Cardoso acknowledged, however, that public auctions are not immune to corruption. To avoid such problems, he defends an increase in transparency.

“All over the world it is the same problem: There is no perfect mechanism for preventing groups from organizing in order to commit some sort of fraud. Even so, there is no getting around it, you have to hold public auctions,” he said, adding: — In these areas,there are very few companies in the world … it is difficult to distinguish, but there has to be transparency. You have to explain the facts more clearly. Serra’s latest statement was excellent, he explained things really well. Had he not, the public might conclude that it is all a bunch of flour from the same sack … But it isn’t.

Alstom’s “Black Box” and The Fictional Offshores


The Estado de S. Paulo has stopped surfing the Net and rewriting press releases long enough to hunt down a genuinely new angle on the story of Metrogate — formation of cartels in the construction and extension of the S. Paulo subway and commuter rail system.

Documents from the Swiss investigation that led to the indictments of August 2012 — the case gathered dust for a year after the Swiss delivered their verdict — bring new dramatis personae into play

Source:  NE10 | OESP

Alstom set aside more than  US$ 20 million for bribing Brazilian officials, and part of these funds wound up in the coffers of political parties. This claim is part of the investigation realized by Swiss authorities and obtained exclusively by the Estado.

A group of ten, among them former state secretaries  Jorge Fagali Neto and Andrea Matarazzo, were indicted by Brazilian federal police in a case of an alleged corruption scheme involving Alstom, discovered by the Swiss.

The investigation shows internal communications from Alstom revealing the scheme to win public contracts in Brazil during the 1990s. In this scheme, Alstom proposes to pay bribes to finance political parties.  The court in Berne found that there existed “clear evidence of bribery” and even an “official  spreadsheet” detailing bribes paid in Brazil. The money was directed to various energy projects, including Furnas, Eletropaulo, Usina de Itá and other projects.

One of the central witnesses in the case is Michel Cabane, who was involved in the scheme and who affirms that “Alstom and Cegelec (an Alstom subsídiary) were working together to organize a system of payments to Brazilian decision-makers.” There was even a list of Brazilians employed by the company.

The Swiss court obtained from Alstom a copy of an internal communication, dated October 21,1997. In it, the director of Cegelec at the time, Andre Botto wrote that the money was to be used for bribery. … “This is a scheme ‘negociated’ by the former state secretary. It — the finances of the party — covers the state accounting tribunal (TCE) and the Secretary of Energy. The goal was to commit what the Swiss ironically call “the perfect crime.” Part of the money went to politicians, another part to the TCE and another to the Secretary of Energy, which would oversee  the bidding process.

Politicians – The Swiss authorities do not cite any particular party by name, but insist that political participation was a constant element. At that time, São Paulo was governed by PSDB. The initias RM probably stand for Robson Marinho, a member of TCE who, after organizing the Mário Covas campaign in 1994, was city chief of  staff, 1995 to 1997. The Swiss revealed every single transfer from Marinho’s accounts into the Safdie Bank in Geneva. The money arrived through an Uruguayan intermediary, a MCA.

Also cited is Romeu Pinto Junior, accused of having organized the payment of bribes through MCA. The investigation shows that on average, 7,5% of the contract value went to bribe-takers.  “According to these declarations,  7.5% and 1.13% of the contracts went to, MCA, 3.1% to Taltos and 0.6% para a Andros; 1,5% went to Splendore.” These were all fictional corporations.

Another Brazilian company involved was Alcalasser, which is said to have laundered more than R$ 50 million. In a deposition to French authorities, the ex-financial director of Cegelec, Michel Mignot, confirmed that Alcalasser was created to process bribes. “Its purpose was the commissions,” he said. His superior, Yves Barbier de La Serre, former secretary-general of Cegelec, also confirms the existence of a “black box.”

Alstom Case | “Feds Indict 11 in Case from 1998”


A follow-up to

The story names only Matarazzo and Fagali. I assume we are talking about the same story on the indictment of ten that ran yesterday. I could be wrong, this is a little confusing.

The story has few new details to offer. Indeed, the story deals with an early chapter in the novela of the Great Sambodian Carnaval of Bribe, in 1998. The involvement of Societe Generale is one new fact, I think. In any event, Globo is knocking itself out producing infographics on the workings of the scheme (see below).  Continue reading