The (Big) State of Brazilian Journalism

Pitiful, how the Estado de S. Paulo metro daily has taken to the production of quasi-fake news of late, in the form of topical coverage of conference events produced by the newspaper itself for its various clients and then reported on as if objectively newsworthy. 

São Paulo | The Triumvirate of Transport

Topic: Who runs the São Paulo bus system?

by  Guilherme Boulos

Source: Viomundo

Originally published in the Folha de S. Paulo.

Translated excerpt by C. Brayton

The predominant force in the city bus service is José Ruas Vaz, also known as “The Baron of the Asphalt” or “The Pope of the Turnstyles.” He is the founder of the Ruas Group, which controls no less than 53% of the rolling stock and receives 56% of the public funding. He also controls bus transport in Guarulhos and other cities in the greater metro area.

Vaz is a man of many enterprises, all of them oddly interrelated. He is, for example, a partner in the consortium that manages advertising at bus stops and the owner of Caio Induscar, which supplies bus chassis to its own sister companies as well as to competitors. If a sector as monopolistic as this can be said to have competitors, that is.

Ruas Group is also known for filing for the bankruptcy of debt-laden companies and then refounding them in order to make it difficult to collect its debts. In 2013 it faced 242 cases of execution for debt. Its pension plan contribution to the INSS reached R$ 750,000.

This is the gang that rules supreme over public transport in the largest city in Brazil.

Another major player in this area is Belarmino Marta, owner of the Belarmino Group, which comprises more than 20 companies that control public transport in various cities, as well as a portion of the capital city.

Along with Ruas Group, Belarmino is owner and partner in a number of Mercedes Benz concession-holders. Mercedes furnishes 65% of city buses.

A Mercedes sales director, testifying to the parliamentary inquiry (CPI) into the transport scriminalityector, produced the following pearl of wisdom: “They sell the bus and microbus chassis to themselves.” Clever, is it not?

The level of cartelization and criminality in the sector has become self-evident. Zero transparency. They have turned a public concession into a means to extort society.

Fares can and should be cut. But where to cut? The profits of the concessionaires, together with a thorough-going reform in the management of urban transportation. The creation of a public transportation company that would manage the system directly is an urgent and necessary measure.

Profitablity does not combine well with quality. A for-profit transport system means that riders must cope with overcrowding and expensive fares. An example of this is the bizzare practice of paying the buses according to the number of passengers carried rather than distance covered. In other words, it is a matter of carrying more people at a lower cost. The result is overcrowding.

Popular demonstrations and the new round of auctions for transport contracts scheduled for March represent an opportunity to question this logic, to begin treating public transport as a right.

What remains to be seen is whether anyone will have the courage.

Car Wash Witness | Contrary to Fact Conditional Parole?

“They knew everything”

I was leafing idly through the news coverage of Operation Car Wash — a megascandal with dozens of suspects of operating illegally inside Petrobras — thinking of doing a coverage timeline of the scandal,  when I came across a surprising statement.

TV Globo said that its sources did not confirm the version published by Veja, and described the Folha article as “distorted.”

It is very rare to see these particular establishment media outlets criticizing one another in this way.  Normally, stories like this are handled as a three-man tag-team match.

According to Valor, however, the naming of politicians involved in the case will not occur until February — Ash Wednesday, when people finally get back to work.

A tropical W$J or FT in incubation, Valor has published as a joint venture with O Globo and the Folha de S. Paulo — odd bedfellows — since May 2000. With the demise of the Gazeta Mercantil, it represents a relative concentration of the market shared with Brasil Econômico — a cousin to the Rio daily O Dia — and the business pages of the Estado de S. Paulo, along with the weekly Exame (Abril).

Bloomberg, Reuters. AFP, Yahoo News and others add a foreign flavor to the mix. The flow of information from various sources cannot but encourage the market observer.

Rumor and leakage in the Petrobras case do appear to have died down since mid-December as defendants — and officers of the court, including the federal police  — honor the gag order, in the case of defendants on pain of losing their plea deal, and leaky civil servants suffering administrative punishment.

Backgrounders [+]:

1. Car Wash | Big Brother Is Watching
2. Nassif on Car Wash | The Tipping Point?
3. Watergate Braziliense: The Leaky Police on the Leaky Police

Source: CartaCapital (October 30, 2014):

Correction to Youssef deposition is a “lie,” attorney says.

Nassif on Car Wash | The Tipping Point?

Operation Car Wash is on its way to becoming a pivotal moment in the political history of Brazil, decisively dismantling a political, judicial and economic model that flourished over the past four decades.

Starting with the financial liberalization of the 1970s, an enormous gray zone of banks in fiscal paradises sprouted up, fed with the proceeds of financial crimes, narcotraffic, the trafficking of persons, political corruption — an enormous archipelago of corruption from which investment banks, currency traders and offshore funds pontificated [on matters financial].

***

In this period, various forms of public corruption germinated, the crudest of which had always to do with tenders for public works and government spending.

More sophisticated schemes were practiced during the era of privatization, with the manipulation of municipal bonds, the exchange of privileged information on currency and tax rates as part of [“pump and dump”] operations in  the stock market.

An ecosystem flourished in which all the political and governmental groups could feed their appetites. Denouncing these schemes only made the headlines in the service of opportunistic political games — all in all, a vast spectacle of hypocrisy.

***

The reaction to this trend had its beginnings in the central nations, with their anti-money laundering (AML) and corporate corruption laws.

In order to arrive at our own Operation Car Wash, we had to run a veritable obstacle course, with previous operations that were aborted by the powerful influence of special interests in all branches of the government — the executive, the judiciary, the legislative and the establishment media.

The congressional inquiry (CPI) of the Municipal Bonds ended in a cozy deal, as did the CPIs of Banestado,  Satiagraha and Sand Castles, because they would have exposed politicians of all political parties, powerful corporate lobbies, and financiers.

***

The status quo changed little with the inauguration of Lula in 2003.

Major investment banks continued profiting from their participation in municipal fixed-income contracts, betting on new world champions, while the strategy of the PT was to assign its best operators to negotiate with the underworld behind the grandest business groups which, to date, had only opened its wallets for the PSDB.

***

Whether the needs of governability really required this strategy, future historians will have to say.

What is important is that Car Wash has broken the cycle of impunity under the current way of doing politics.

None of the major parties will escape this web of corruption. There is no room for opportunistic maneuvers. The leading figures of the PSDB are just as involved as the operators of the PT. The advent of the social networks has put an end to the heavy armor the party has reliably provided it.

I was shocked when I read that a Supreme Court Justice criticized by Nassif and the staff of Carta Capital had taken the time out of the official reading of his decision in the ratification of campaign accounts to personally assail Nassif.

I am an occasional Web interlocutor of Nassif — I have read his “The Spreadsheet Heads” and his series on the corruption of journalistic ethics at Veja magazine — but I have to say it: His site is a little unsightly and does not look like an A-list blog. It is mostly just another Ning community of the kind your local children’s soccer team might set up in 15 minutes. But it works.

And so it is a grand day here in Sambodia when the little boy tells his mother that the emperor wears no clothes. Your character, the character of your enemy, that sort of thing.

***

Here, then, some complex paradoxes arise.

If it is partial (partisan) and not complete, and if it permits opportunism, the results of the operation will be less trusted.

If it heats up the iron and investigates everyone, no matter who gets hurt, it will shut down national politics.

***

It is not up to prosecutors and police officials to define the limits of the Car Wash affair. It is the prerogative of political actors to offer ways out of the grandest political impasse in the democratic history of Brazil.

It is urgent that these proceedings result in radical proposals in election law, the criminal code, and the Constitution itself.

May the gods of wisdom guide attorney-general Geral Rodrigo Janot and his courageous team through the Car Wash case.

You can also read about Watch Dog Journalism in South America for a much more reasonable price.

Deep Float | Petrobras Underwater, Fire

A back of the napkin outline of the Pasadena scheme

Item.

•  Estado de S. Paulo | Fausto Macedo

There is curiosity today as to the identity of a “deep throat” witness in the Petrobras corruption megascandal.

One month after Operation Car Wash was carried out, in the middle of this year, a career public servant with 30 years of service approached federal agents in charge of the task force and denounced Petrobras for ignoring “signs of criminal behavior” and “intentional mismanagement” inside the state-run petroleum giant “in order to divert funds without awakening the suspicions of auditors and inspectors.”

Together with the acquisition of the Pasadena Refinery in the U.S. – the most emblematic of the charges involving the case — the witness named former Mines and Energy minister Edson Lobão as the “godfather” of one of the suspects and [alleged that] current Petrobras CEO Graça Foster was responsible for the nomination of two other senior executives in the foreign trade division, supposedly responsible for a sale of assets to Nigeria that had led to losses for the company.

Was it a note with awful grammar from some General Nigeriano Ubuntu offering you a handsome sum for laundering some huge amount of cash through your account?

This is the Nigerian Third World Corruption scam. Purge it from your e-mail client. A variant is the wealthy but oppressed damsel in distress, for those more responsive to an emotional stimulus, and might be called the Rwandan Woman in Fear for her Life gambit.

During a four-hour closed session held on April 28 in Rio de Janeiro, – the transcript was appended to the Car Wash case file on Tuesday — the «informant», whose name will not be released during continuing investigations, described six cases of alleged criminal misconduct, chief among them the acquisition of  Pasadena, initiated in 2005. The deal, valued at US$ 359 million at the outset, wound up cost US$ 1,2 bilhão, causing Petrobras to suffer a US$ 793 million, according to the federal accounting tribunal (TCU).

[ … translation to come …]

Globo | Philanthropy = Pilantropia

Source: DoLaDoDeLá |  Diario do Centro do Mundo (Paulo Nogueira)

Topic: Pilantropia

Derived from the term “phIlantropy” and associated with dishonest acts by persons who are pilantras —  low-down liars and shameless villains.

Globopar and the Virgins | Material Events

Source: Blog da Cidadania

Between 2001 and 2002,  Globo Comunicações e Participações Ltda. (Globopar) organized a financial scheme to acquire the transmission rights to the World Cup of 2002. The federal tax authority found the scheme to be fraudulent and criminal. The company was punished  with heavy fines and other penalties.

Globopar had acquired a company in the Virgin Islands that was dissolved just one year later. The funds traced to this company by the tax authority were used by the Marinho family holding company to pay for the transmission rights.

The tax authority brought charges against the company, finding that the transaction had resulted in the evasion of the Income Tax for Corporations [IRPJ] and demanding the payment of the principal, together with adjustment for inflation and a fine. In all, the company was presented with a bill for some R$ 600 million.

All of this took place at a time when news of Globo’s financial problems were widely reported in Brazil and around the world.

In October 2002,  Globopar, a shareholder and operator of the NET cable TV network — an asset it would later sell to the Mexican group Telmex — announced it would renegotiate the deadlines for settling the debt generated by its participation in NET.

At the time, market experts viewed the manuever as a sort of  [“blank  settlement”] by Globo.

São Paulo | New Songs About Buildings and Food

Source: Artur Rodrigues | O Estado de S.Paulo

To expedite procedures and reduce corruption, Haddad disbands Aprov

Change. The agency, which became known for the scandal involving its former manager, Hussain Aref Saab, was retired yesterday, together with Contru, by the new city Secretary of Licenses, which faces the task of catching up on 25,000 applications.

Whatever happened to Hussain Aref Saab? I thought it was remarkable how little coverage was devoted to his ties with Mayor Kassab and his party.  Then I thought again.

Six months into his mandate, Fernando Haddad (PT) has instituted the Municipal Secretary of Licenses and given it the mission of acting on a backlog of at least 25,000 applications. The first official act of the new agency, headed by architect Paula Maria Motta Lara, is to put an end to Aprov, the Building Approvals office, and Contru, a zoning authority, both of which have suffered  accusations of corruption over the  years.

The closing of these offices comes as part of a restructuring program that plans to staff up with civil servants from two underused city departments, Parsolo (…) and Cadastro Setorial (…), which are also being dismantled.

The objective is to divide these human resources among specialized coordinating agencies: Residential Use (Resid), Institutional Services and Uses (Servin), Industrial and Commercial Usage (Comin), Public Housing (Parhis) and Special Activities and Security of Usage.

Although she explains the changes in terms of operational considerations, the incoming secretary says she is happy to do away with Aprov, which gained fame from the scandal involving its former chief, Hussain Aref Saab, who accumulated a fortune of 125 real properties during his tenure.

“With everything that happened, Aprov became synonymous with the worst possible scenario. Our decision was to say, “There will no more Aprov, forget that story because now there is a new municipal secretary.”

As a weapon against corruption, Paula will rely on reducing procedural delays, and said she had found cases lying around unattended since 2002. “What you saw in the cases (of corruption) we discovered were promises to expedite paperwork. “At present, it is normal to see cases that have waited five years or more. There is a mountain of paperwork. The atmosphere lacks the urgency of an office with people waiting,” she adds. Her goal is to comply with the Código de Obras — The Building Code — which provides for finalization of applications within 90 days.

Regarding the six month delay in establishing the new structure, Paula blamed bureaucratic issues: It was necessary to approve the enabling legislation for the creation of the new office, which was part of a legislative package with 11 other topics. In the meantime, Paula worked out of the office of the housing secretary, with no support except for a driver, and says the number of procedures stuck in the system at Aprov decreated  from 7,500 to 4,600,

With the new coordinators, Paula knows that the mayor will be keeping a sharp eye on the approval of «social interest housing» — the mayor has promised to build 20,000 units. Another bottleneck is the lack of a licensing program for night clubs. On Sunday, the Estado reported that, of 58 party spots  it monitored, 30 were operating without a license.

[…]

Electronic processing. Another mission to accomplish by year’s end is to reactive the electronic system adopted by ex-Mayor Gilberto Kassab, which had many problems and was suspended. For the time being, the process remains a pen and paper affair. The incoming secretary says she is also organizing amendments to the 1992 Building Code. The idea is to assign more responsibility — and punishment — to those responsible for construction projects …

It will be nice it if works out. Earlier administrations, now in the opposition, provided significant bureaucratic relief in some areas with the Poupatempo program. Haddad is an ambitious technocrat with a briefcase full of master plans. We shall see how well he can cope with the fractious municipal assembly and the state, the latter of which belongs to the national opposition.

Globo | Suicide Bomber?

Source: Brasilianas.Org.

By: Amaury Ribeiro Jr. and Rodrigo Lopes | Hoje em Dia

Translation: C. Brayton

Cases against Globo may resurface in the Congress

Facing death threats, a retired accountant promises to deliver to the Congress, in the next several days, the more than 10,000 original volumes of civil and criminal cases against the Globo network, which has been charged with tax evasion, money laundering and crimes against the financial system.

The documents disappeared from the offices of the tax authority on the eve of the second round in the 2006 national elections.

In response to the charges, Globo issued a press release with a detailed time line of the case from its point of view, professing ignorance: I translate, below.

Globo | Shredding the Documents?

Globo’s DARF file, 2002-2013

Source: Revista Fórum.

Brazilian blogger Miguel de Rosário has an interesting project underway: a challenge to Brazil’s leading, privately owned media organization to “publish your DARF” — that is to say, divulge your Documento de Arrecadação de Receitas Federais (Documentation of Federal Tax Revenue).

The case involves Globo’s use of offshore corporations to acquire broadcast rights to the 2002 World Cup without paying taxes on them.

Volunteers pitching in on the project have gained FOIA-like access to the case file and found that it had disappeared from the files of the federal tax authority.  Promoters have set up a Facebook page to organize the blog-in, which has attracted 3,572 RSVPs.