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Cartel Investigation | Underwhelming, Says FSP


If only all politicians were like this

Source: Folha de S.Paulo

In the parlance of political marketing, “vaccine” is the name given to a publicity campaign or other measures produced with the goal of immunizing the candidate against attacks to which he may later be subject during the political campaign.

Take the example of the PSDB’s TV spot, which aired this week. The clip begins with a presenter saying that authorities should not hide when problems arise. She then states that Governor Geraldo Alckmin “has served as an example of this in the case of the private cartels.”

Next, Alckmin appears, declaring himself interested in getting at the entire truth of the case and, with a firm expression on his face, affirming he will “get to the bottom” of this matter. In conclusion, the presenter, in firm tones, proclaims “If only all elected officials were like this.”

Indeed. But reality, as we know has a habit of diverging from publicity. Between the determination expressed by the PSDB propaganda machine and the investigations finally carried out by the state government there is a considerable lacuna  — filled in, for the time being, with impunity.

Screenshot from 2013-10-18 09:48:32

Minutes and resolutions of the CGA in its five meetings to date : Click image to visit page

The “case of the private cartels” —  the PSDB’s marketing euphemism for the episode — broke three months ago in this newspaper. According to testimony by the German multinational Siemens as part of a plea bargain, this was a scheme to defraud auctions for São Paulo subway and passenger train systems.  Without genuine competition, prices for these services increased as much as 30%.

Evidence shows, however, that the scheme goes back to 2000, during the Covas administration, and continued on under the Toucan (PSDB) administrations of Geraldo Alckmin and José Serra — there is still no proof that authorities were involved.

The damages to the public coffers may have been immense. It is in the highest public interest, then, to clarify the episode and punish the guilty, if any.

The investigation conducted by the state comptroller-general, however, has made no progress after three months of work. In the legislative assembly, dominated by the PSDB and its allies, state deputies are refusing to install a parliamentary commission on this topic.

The Toucan publicity apparatus may have achieved its objective of vaccinating Governor Alckmin, but one soon sees that its TV spot has not been inoculated against the virus of deceptive advertising.

Questions by civil society members of the panel (PDF).

SABESP in Amapá

Screenshot from 2013-10-18 09:45:04

Another surreal Brazilian political practice is the ambiguous use of advertising budgets for state-owned firms — in the following case, the Bovespa-listed SABESP — to promote positive, if nebulous, vibes about the government that pays the bill.

As Helena Sthephanowitz of Rede Brasil Actual commented back in July,

Despite recent street demonstrations demanding the improvement of public services and speaking out against high fares and tolls, Governor Geraldo Alckmin (PSDB/SP) seems to enjoy living dangerously, to the point of defying popular discontent.

Sabesp, a company controlled by the governor, recently completed an auction in which it acquired R$ 87 million to spend on a publicity campaign — in the markets, it have been observed that this year’s PR and advertising budget will cost the company up to R$ 120 million.

The problem is that the company has a captive user base and a monopoly over the area of its concession. That is to say, it does not need to advertise as though it were a beverage company.

Advertisements for Sabesp are useless: they do nothing to help it sell its product, which is treated water and  sewage. For that reason, there is no other budget item best suited to protest than this. It would be more useful and necessary to use this amount to reduce the monthly water bill or invest more on the company’s own network of water supply and sewage treatment.

The siuation reminds one of what José Serra, who preceded Alckmin as governor, did. In the pre-election year of 2009, as now, Serra unleashed a massive TV publicity campaign, with such disrespect for the money of the São Paulo taxpayer that he did not even restrict the airing of the ads to state-owned and -operated broadcasters.

And more, much more. The SABESP campaign covered the whole of Brazil. The TV viewer in Amapá who consumes water from the local utility, CAESA, and lives scandalously far from the SABESP concession, winds up watching advertisements for the São Paulo utility.

In 2009, the case drew the attention of the Regional Electoral Tribunal of Rio de Janeiro  (TER/RJ) as a possible case of advertising outside the regulation period. Because Serra was not yet a presidential candidate at the time, the TER/RJ could not charge him electoral misconduct. The case might have merited an investigation by the state Public Ministry into charges of administrative misconduct.

Alckmin is  now ready to resort once more to this feat.   This time it is unlikely that the money will be spent nationwide, given that his political aspiration is to win reelection in São Paulo.

As a result of the auction, the SABESP advertising budget is to be divided among three agêncies — curiously, one of them is  Duda Propaganda, run by Duda Mendonça, without a doubt a highly regarded publicist whose work includes political campaigns.

As if all of that were not enough, an establishment columnist, Lauro Jardim, announced the winners of the auction before the results were arrived at, leading one to believe that there may have been something irregular about the auction.

Therefore, the youth who took to the streets to protest corruption should also express their anger at the governor and SABESP. Is it possible?

An additional dimension to look into: the Sabesp growth plan, which might take the form of M&A — it merged with CENAD earlier this year — or the sale of technology and services. I am just guessing. It does, after all, trade ADRs in New York.

Screenshot from 2013-10-18 11:12:21

Siemens is not cooperating with the CGA investigation, and despite having received two invitations to provide information and explanation, it failed to attend either. It argues that to do so would violate the confidentiality agreement it celebrated with antitrust regulator CADE.