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Restoring the Media Latifundio: The Bitter End of Argentina’s 678


Sources | Carta Maior, Blue Bus (Brazil)

Restoring the media latifundio in Argentina: This is apparently one of the first priorities of the shock politics the new conservative administration intends to establish in Argentina over the next 100 days, along with other repressive measures in the areas of politics, economics and the administration of justice.

One of the first announcements of the government, even before the swearing in of Mauricio Macri … was that the television program 678, broadcast in prime time by state-owned TV Publica and competing with commercial media groups, would be discontinued.

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Mexico Stands Up to Its Globo | Conversa Afiada


I am not a big fan of the noisy Conversa Afiada –brainchild of TV Record reporter PHA — but I thank it for tipping me off to an important story from Mexico, as reported by the indomitable Carmen Aristegui, ex-CNN Español.

Regulatory agencies are attempting to rein in Televisa and its 75% lock on the Mexican broadcast media market.

Let me present an excerpt from the more technical treatment of the historic trust-busting, rule-changing decrees and resolutions, followed by an analysis by PHA, among whose virtues is an understanding of the parallels between Brazilian Globo and Mexican Televisa — both of them attempted stealers of elections — and of the activities of the Mexican magnate Carlos Slim in Brazil.

Televisa is a “dominant economic agent,” rules Ifetel

“The resolution announced yesterday by the Federal Institue of Telecommunications (IFT) imposes various and significant measures, conditions and restrictions on the broadcasting business of the Televisa Group,” the company recognizes.

IFTel declared Televisa a dominant economic agent in the broadcasting market and will subject it to a series of regulatory measures.

The empire of Emilio Azcárraga Jean will be obliged to share infrastructure, turn over to IFTel the terms and conditions of its advertising broadcasts and will not be allowed to acquire exclusive transmission rights in Mexico.

The company acknowledged that “all of these resolutions and actions of the IFT affect the Televisa Group in many areas related to its broadcasting and pay TV businesses, and we will evaluate the scope and impact in a case by case manner, in terms of its operating results, activities and businesses.

And the company warned: “As a result of the size of the declaration of dominance, with its 650 pages and of the complexity of these resolutions and proclamations, we will closely analyze any measure (of a legal, commercial or other nature) that Televisa must take in implementing them.”

Categorizing Televisa as a dominant economic actor in the telecommunications sector imposes the following conditions on its businesses:

Sharing of Infrastructure: Grupo Televisa will be required to place its broadcasting infrastructure at the disposition of third parties in a non-discriminatory, non-exclusive manner, with the exception of broadcasters broadcasters that have 12 MHz or more of broadcast spectrum in the affected region. This infrastructure includes, among other things, non-electronic components of the transmitters, right of way, towers, masts, energy sources and air conditioning systems. This measure aims to expedite the entry of new broadcasters into the market.

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Car Wash Witness | Contrary to Fact Conditional Parole?

"They knew everything"

“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 bedfellowssince 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.

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Media Blitz 2014: Coffee, Cream and Sugar at Presidential Debates

A report on the current incarnation of the hoary old Café com Leite economic and political movements — a phrase used to describe the ideological dichotomies of the Old Republic of the late XIX Century.

(Milk stands for agricultural Minas Gerais while São Paulo still embraces the ways of  the fantastic, legendary coffee bubble.

The old coffee exchange still stands in the vicinity of Wall and Pearl Streets, I think. I just remember being surprised to come across an almost identical building in the port of Santos, with the same title.

Northeastern sugarcane completes the picture and I sigh after taking a cautious slurp.

My translation, with minor corrections to preserve the flow.

During the second round of elections,  (PSDB) will rely on support that far exceeds the numbers of its campaign supporters and militants.

According to the  Manchetômetro [Headline Watch],  which monitors  election media coverage  on a daily site, in a typical week has yielded a wealth of stories and articles contrary to reelection of Dilma. The group recently counted 79 negative headlines about Dilma and only 10 (ten) about the center-right Toucan candidate, Neves.

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Metrogate | “Marked Cards,” Says Folha


Source: Folha de S.Paulo

An exchange of e-mails among Siemens executives indicate that companies had prior access to the plans of the CPTM for four auctions held by the state government in 2004 — during the second term of Geraldo Alckmin (PSDB) as governor.

A document in the possession of federal antitrust authorities to which the Folha had access show that even before the publication of the conditions for the auction, the companies were already discussing how to divide up the  Boa Viagem program, launched by Alckmin and designed to refurbish, renovate and modernize the trains.

On November 24, and titled “Acquisition Planned by CPTM in Brazil,” an e-mail sent by a Siemens exec detailed how the company wish to divide up the contracts among the major suppliers. The first public announcement of the auctions were not made until two days later.

“The various reforms should go to various suppliers. The main goal of the  CPTM is to assign the complete package to four major suppliers  (Alstom, Siemens, Bombardier and T’Trans). In our case, we can count on  Iesa and  MGE as subcontractors”, the e-mail, signed by executive Marcos Missawa, said.

[Link] The other side: State denies ever discussing project with contractors

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PL39/13 | A Chip Off the FCPA


No problem does more to alienate citizens from their political leaders and institutions,and to undermine political stability and economic development, than endemic corruption among the government, politica l party leaders, judges, and bureaucrats. — USAID Anti-Corruption Strategy

Source Valor Econômico | Portal ClippingMP.

Brazilian attorneys Leonardo Guimarães and Flávia Godinho compare recent anti-corruption legislation in Brazil with congeners in the U.S. and Britain.

Corruption indiscriminately affects citizens, public institutions and private organizations. Brazil as a whole is damaged when  corruption distorts the mechanism of the free markets — undermining fair competition, inspiring uncertainty among business owners, and driving away investors. For this reason,  combating corruption has been the subject of diverse international conventions, such as the Interamerican Anti-Corruption Convention organized by the OAS and signed in 1996; the OCDE Anti-Bribery Convention, from 1997; and the UN Anti-Corruption Convention, approved in 2005.

In response to the various international obligations it assumed, Brazil has passed laws designed to combat corruption, such as the Law of Administrative Impropriety and the “Clean Slate” Law.

Brazilian law still suffers from lacunae in its treatment of active corruption by a corporate entity, the only punishment for which is a restriction on the right to enter into contracts with the government.

Existing  mechanisms must be improved if the new law is not to be just another case of legislative inflation.

In the context of adapting our law according to international standards, we now have before us the PLA, the Anti-Corruption Bill (PL 39/13), which will regulate the civil and administrative responsibility of corporate entities for acts injurious to the public administration, both here and abroad. The law was approved in July 2007.

From the point of view of comparative jurisprudence,  PL 39/13 closely resembles the Foreign Corrupt Practices Act (FCPA), an innovative piece of legislation from the U.S.,in force since 1977, which prohibits the bribing of foreign public officials by U.S. corporations. It bears some  resemblance as well with the  Bribery Act, passed in 2011, a British anti-corruption law.

FCPA: Notable Cases

Although you read that the FCPA is too little used, there are at least two very interesting cases of its application: the Wal-Mart Mexico debacle and the record-setting settlement with SIemens.

An April 2012 article in The New York Times reported that a former executive of Walmart de Mexico alleged in September 2005 that Walmart de Mexico had paid bribes to officials throughout Mexico in order to obtain construction permits, that Walmart investigators found credible evidence that Mexican and American laws had been broken, and that Walmart executives in the United States “hushed up” the allegations. According to an article in Bloomberg, Wal-Mart’s “probe of possible bribery in Mexico may prompt executive departures and steep U.S. government fines if it reveals senior managers knew about the payments and didn’t take strong enough action, corporate governance experts said.”[6] Eduardo Bohorquez, the director of Transparencia Mexicana, a “watchdog” group in Mexico, urged the Mexican government to investigate the allegations.[7] Wal-Mart and the US Chamber of Commerce had participated in a campaign to amend FCPA; according to proponents, the changes would clarify the law, while according to opponents, the changes would weaken the law.

Siemens, in the Brazilian public eye at the moment, figures in this story, too.

In 2008, Siemens AG paid a $450 million fine for violating the FCPA. This is one of the largest penalties ever collected by the DOJ for an FCPA case

The lede:

In a December 15, 2008 press release, the U.S. Department of Justice (DOJ) revealed the details of a $450 million criminal fine payment made by Siemens AG, a German company, and three of its subsidiaries. The four pleaded guilty of violations related to the Foreign Corrupt Practices Act (FPCA). The three subsidiaries, Siemens S.A. – Argentina; Siemens Bangladesh Limited; and Siemens S.A. – Venezuela pleaded to one-count informations involving conspiracy to violate the anti-bribery and books and records provisions of the FCPA.

Taking One for the Team

Clarifying the line between “physical” and “legal” entities — my physical being and my purely notional translation business, say — is an important objective.

As in the examples just cited, the provisions of  PL 39/13 target the financier of the illegal act and not the receiver of the bribe. This is a completely novel approach with respect to the Brazilian legal system.

Within the spectrum of harmful acts that deserve to be repressed we find the defrauding of contract auctions and administrative contracts, as well as promising, offering or delivering, even if indirectly, an undue advantage to a public official or a third party related to that official.

In addition, it is forbidden to use an intermediary to hide or simulate the real interests or the identity of the beneficiaries of the act in question, or to hamper the work of agencies, institutions or public servants or intervene in their activity.

Administrative sanctions  — including the payment of a fine between 0.1% and 20% of gross income for the previous quarter — are applied independently of whether or not the guilt of a corporate entity is proven.

I read that paragraph carefully, and that is what it says. I suppose it means that if I cheat at poker in my official capacity as VP of Poker, my cheating reflects on my employer, since it was done in his name, even though without his knowledge.

There is a Brazilian legal concept called the domínio do fato that works in a similar manner. It came up frequently during the recent “payola” trial in the Supreme Court, where Zé Dirceu, for example, was not proven to have actively participated in the scheme but who was held responsible for reasons of domínio do fato.

Civil sanctions depend on proof of guilt or guilty intent, excepting the loss of assets and sums of money obtained by means of the infraction. It should be emphasized that the fate of the corporate entity does not let the physical person responsible off the hook — this person may be tried separately and/or simultaneously.

Also worth mentioning is the rule that provides benefits in the application of sentences for companies that adopt corruption prevention practices, such as “internal mechanisms and procedures to preserve integrity, audit carefully, and provide whistleblower incentives, as well as instilling effective ethical codes for the organization as a whole”.

This rule, one of the most beneficial provisions of the bill, stimulates the implementation or updating of “compliance” programs  — the Anglo-Saxon term means to act according to a rule. Compliance programs guarantee the adoption of conduct that conforms with the rules and polices, both internal and external, of the company, as well as fostering a transparent ethical atmosphere conductive to corporate best practices.

This is a major advance in our legislation, which will now take into account the procedures and internal policies of companies as a way of reducing punishments, as has become commonplace in countries like the U.S. and Great Britain.

Observe as well that where there is no regulatory framework to define the pillars of a compliance program, The American guide, A Resource Guide to the U.S. Foreign Corrupt Practices Act (PDF), can be useful. It identifies the “hallmarks” of what are considered to be essential factors in a successful compliance effort.

A integridade e os princípios éticos devem estar presentes em todas as ações realizadas pela empresa, incluindo seu relacionamento com o setor público. A possibilidade de uma mudança de cultura a respeito do relacionamento entre o poder público e o particular, com a incorporação de um compromisso das empresas contra a corrupção, é, certamente, uma boa inovação trazida pelo projeto.

Embora o projeto de lei, de forma geral, represente um avanço no combate à corrupção, principalmente no que se refere ao incentivo da criação de mecanismos internos de controle nas empresas, deve-se ter em mente as vulnerabilidades processuais e investigativas do nosso sistema, cujas leis anticorrupção anteriores não conduziram aos avanços esperados. A melhor resposta que se possa dar à corrupção, antes da criação de mais um aparato formal, é o aprimoramento e a efetivação dos mecanismos já existentes, para que as novas leis não se transformem em mera inflação legislativa, sem qualquer efetividade.

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.

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