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Adventures in the Black Market


Source: GGN.

A team of half a dozen police agents, together with the political will of Mayor Fernando Haddad, was sufficient to unmask a criminal conspiracy that had operated for a least a decade in the municipal government of São Paulo.

The implicit compliment in the reference to “political will” calls attention to itself. There has been a drought in coverage of City Hall since the Workers Party were handed the keys in the last election. News coverage of local politics is currently written in inverted inverted-pyramid.

From Brasília, Haddad brought in the auditor Mário Spinelli, a civil servant in the federal comptroller general, the CGU (Controladoria Geral da União). An accord was signed that enabled investigation work by five civil servants of the CGU and two from the federal tax authority.


The measures taken, as simple and obvious as they may seem, call attention to the fact that none of these actions had been implemented by prior administrations.

Attention to the fact, please!

Civil servants have a legal obligation to submit their income declaration. This information, however, is usually handed over in envelopes and remain unsealed due to the difficulty of obtaining the data [?].

I think we are talking about the handling of paperwork. There is a lot of that going around.

Later, civil servants were obliged to file their fiscal reports electronically. A database with the financial information of 160,00 public employees was created. Data-sharing agreements were signed with other agencies for the purpose of cross-checking.

Once that step was complete, a risk matrix was created to identify the areas most vulnerable to bribes. So confident were some of the unmasked perpetrators in their own impunity that they did not bother to conceal their wealth or resort to fronts to move their money.

During the administration of Gilberto Kassab, Secovi (the Housing Syndicate) released a report complaining of the shake-downs suffered by the housing sector.

Kassab forwarded the case at the precise moment that the head of the “mafia of the auditors,” Ronilson Bezerra Rodrigues – who, among other things, was responsible for the leaking of  Antônio Palocci’s ISS tax form.

Grupo Abril’s Veja magazine engineered a political blitzkrieg bop against the minister, in a series not unrelated to its present attention to a scandal involving Petrobras, of whom the president is a past CEO and chairman board.

Palocci was given no opportunity to respond to what seemed an obvious set-up. The Finance Secretary lacked even the electronic ID code of the invoices that were subject to the ISS tax in question.


The second stage of oversight consisted of hunting down laranjas — front organizations or phoney IDs. The analysis of the social networks was an important tool at this point.  One Facebook profile, for example, a civil servant was found who owned a Rio de Janeiro inn evaluated at R$ 6 million.


In order to combat corruption on a permanent basis, Mayor Haddad sent a bill to the municipal assembly creating the office of auditor. The bill ground to a halt and only reappeared with accusations involving one of the two assemblymen.


Another difficulty is the political spin imparted by the local print media. This provides members of the group with opportunities to mount effective counterintelligence strategies.

In many reports, the scandals revealed are presented as though they derive from the current  administration and not their own investigations, for instance.

An attempt is also in the offing to incriminate the Mayor’s closest advisor,Antônio Donato, based solely on statements attributed to the head of the conspiracy. Nothing is said about the fact that Donato participated in the operation from the beginning and that the accusation is unsupported by evidence.

Another “Extra! Extra!” story on the “the mafia of the auditors” set up by the conspiracy consisted of exposing Spinnelli, the outside auditor from the CGU, accusing him of receiving an inflated salary, together with information on his personal life, such as the night club he frequents.

Spinelli wasted his breath trying to inform the reporter that he is receiving his CGU salary for the detached duty.  The revelation of personal data, furthermore, exposes the auditor and his family to to the possible vengance of criminal organizations.