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Mexico Stands Up to Its Globo | Conversa Afiada

2000px-Televisa_oficial.svg

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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Globo | Philanthropy = Pilantropia

globopilantropia

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.

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The Big Payola | Globo and Banco Rural

globoxrecord

Source: DoLaDoDeLá

We all know that at the beginning of  the 2000s, Globo Participações was on the brink of  collapse. It had tried to get the federal government to back a financial recuperation plan along the same lines as Proer, a program created by the Cardoso government to rescue banks from what used to be called “contagion” or “systemic risk.”

The proverbial “too big to fail.”

In 2004, an investment fund demanded that Globo file bankruptcy in the United States. It was then that the debt restructuring became an urgent matter. At around the time, the Marinho brothers sold off their shares in a number of repeaters and affiliates.

A supervisor of mine at the time, in an effort to convince me that the bosses were committed to jobs and salaries, said that “the poor guys” had had to give up the family helicopter — as if they had a choice between making this sacrifice or doing away with their human resources. Tell me another one … Continue reading

Brazilian Brokers to Change Exchange?

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Sensitive to the challenging conditions faced by brokerage houses and issuers, the BM&FBovespa is studying a plan to restructure the Brazilian brokerage industry. The rules require intensive changes, says Edemir Pinto, CEO of the BM&FBovespa. “The time has come to review this whole system we have here in Brazil.,” he said.

The stock exchange has formed a working group with Anbima, the association of capital and financial  markets companies, and Ancord, the national association of brokerage houses and distributors.

The group will analyse the market and propose changes to the federal government. The Banco Central and the Brazilian SEC-equivalent CVM) support the study and dispatched personnel to follow the process as auditors.

For a September 2012 interview with Pinto by the CME Group — in PT-Br — see here.

The two discussed a buzz-making remark by  Bill Clinton, «I would bet on Brazil first,” and outlined a partnership with the CME Group to offer S&P 500 e Ibovespa futures through the Globex and PUMA order routing platform.

The global preferred strategic partnership between BM&FBOVESPA and CME Group allows their customers to trade contracts of both exchanges in real time. Continue reading

Risco Brasil | Courts Uphold Derivatives Contracts

The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so  far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are  potentially lethal. –Warren Buffet 2002

“It’s an established fact: corporate governance in Brazil is divided into two periods: before the derivatives scandal and after it.” –Rodrigo Zeidan, Fundação Dom Cabral.

According to research performed for the Folha de S. Paulo — and not, for some reason, by the FSP — courts are tending to uphold the caveat emptor school of thought on the subject of

I translate. Author: Adriana Aguia, Valor Econômico Portal ClippingMP.

The exchange-rate derivative contracts that pressured the finances of such major business groups as Sadia, Aracruz e Votorantim, causing billions of dollars in damage during the panic of 2008, are now being  recognized as valid by the Brazilian judiciary.

During the 15 minutes of fame generated by the Aracruz and Votorantim “too big to fail” derivatives cases, Brazil’s SEC, the CVM created and issued a new accounting form — above — in which derivatives contracts would be reflected on an appendix to the quarterly books.

In 2010, CVM issued Instruction 486/10,

which deals with the execution and clearing of derivatives contracts negotiated or registered in organized trading venues: the stock market, the commodity and futures market, and the organized OTC.  The main objective of Instruction 486/10 is to support information-sharing on derivative transactions conducted in the market or in an OTC by the oversight bodies of the stock, commodities and futures exchanges, in keeping with certain recent and unprecedented tendencies in the Brazilian market. Continue reading

Taking Out A Contract | Waterfall’s São Paulo Dealings

The oppositionist Diário de Manhã  warns Brazilian federal deputies in the government alliance that an investigation of crooked contracting practices in the «Waterfall» case might also hurt the ruling PT and the allied PMDB.

Recently read:

Leandro Fortes, “Cachoeira leaves fingerprints on São Paulo,” Carta Capital(Brazil), 19 September 2012.

I translate a passage or two.

 Technical experts working for the federal parliamentary inquiry into mob boss and lobbyist Carlinhos Cachoeira have just finished a complete survey of all contracts signed by the São Paulo state and municipal governments and Delta, a private contractor linked to the criminal organization headed by the numbers racketeer.

Linked how? That’s the interesting question. Leandro Fortes calls him a “silent partner” of and lobbyist for the engineering firm, one of the largest in Brazil.

In an intriguing sidelight, the scheme apparently used journalists, both witting and unwitting, to smear, with screaming headlines, rivals and government officials standing in the way of its interests . Fortes cites past negotiations over a report that ran in Globo’s Época magazine, for example:

The revelation of a relationship between Globo and its magazine and the group headed by the numbers boss comes just as Leonardo Gagno, the attorney for Cachoeira right-hand man and black bag operator Dadá, told the congressional commission that Dadá and his colleague were tasked with “feeding stories to the news media,” and that “Cachoeira’s interest in using [information warfare] as a part of doing business was well-known by everyone.”

«informações» = information, intelligence, counterintelligence

But back to CartaCapital and Leandro.

The alleged scheme involves sums in excess of R$ 1.2 billion. The results of the study reveal the relationship of PSDB governments with the parent organization of the Cachoeira conspiracy and cast suspicion on seven-figure contracts negotiated by the Kassab municipal government in São Paulo, supposedly influenced by the former DEM senator for Goias, Demóstenes Torres.

Kassab was a member of the DEM until a year or so ago when he jumped ship to the newly founded PSD.

Delta received the contract for the urban renewal of the Paraisópolis shantytown under the Kassab government.

The project is being used as a model urban renewal project in TV inserts for mayoral candidate José Serra.

The indefatigable Paulo Preto puts in an appearance as well. A federal police telephone wiretap conducted during Operation Monte Carlo captured a conversation between Cachoeira and Cláudio Abreu, Delta’s regional director for the Brazilian Center-West, in which th two men discuss Delta’s contracts with the São Paulo city government.

Dated January 31, 2012, the wiretap captures the numbers and bingo boss asking Abreu about a conversation between Delta’s former CEO, Fernando Cavendish and Mayor Kassab about an as yet unidentified contract.

The Delta director makes a revelation: As a favor to Senator Torres, São Paulo’s mayor supposedly tripled the value of the unidentified contract. The converation runs as follows, transcribed from an audio file to which CartaCapital had access:

— Carlinhos Cachoeira: One other thing, Cláudio, Did you speak to Fernando (Cavendish) about that thing with Kassab?

— Cláudio Abreu: … I am going to meet with him later, I am going over there to give him an answer. But tell me, what’s the deal over there? The contract, right? He did the thing, didn’t he? He did it for the Professor (Demóstenes Torres), right?

— Cachoeira: He (Kassab) said he tripled the contract for him (Demóstenes).

An analysis conducted by the CPI indicates that São Paulo city hall signed three contracts with Delta between 2004 and 2012, worth a total of 307.6 million.

A contract with the Companhia de Limpeza Urbana (Comlurb) – street sweeping and garbage collection — was worth R$ 93.7 million. A contract for the urban renewal of the Paraisópolis shantytown, signed with the city housing authority, was worth R$ 15.4 million. A contract with São Paulo Transporte S.A. (SPTrans) — public transportation — was worth R$ 12.2 million.

Given the timeframe of the police surveillance, it is not yet possible to detect exactly which of the contracts was allegedly tripled, since all three were continued into 2012.

City hall spokesman Emerson Figueiredo said that Mayor Kassab “is unaware of this dialogue and its supposed protagonists and considers its content groundless.”

Relations between Delta and the São Paulo state government involve larger sums, totaling R$ 943 million in today’s reais. The contracts were signed under state governors José Serra (R$ 765 million) and Geraldo Alckmin (R$ 178 million) between 2002 and 2012. The deals were signed at the instance of five state-owned firms: Dersa and DER (highways), Daee (hydroelectric power), Sabesp (water and sewage treatment), and Unicamp (state university).

The most significant project for which the state contracted Delta was as part of the New Tiete Consortium, which undertook to broaden the Tiete beltway for R$ 150 million. The contract ran from June 22, 2009 to April 10, 2012. Based on an analysis of the transfer of consortium funds to Delta’s accounts, the CPI’s technicians concluded that the companies involved have no controls over the allocation of credits and debits to consortium members. In this way, one firm may subcontract another and pay it the entire amount due for the service. Using this subterfuge, and based on the padding of invoices or  falsification of receipts for services rendered, the difference can be returned to the subcontractor with absolutely no oversight or disclosure.

Delta may have mounted a money laundering scheme using such bureaucratic subterfuges. The experts also noted that Delta’s subcontractors enter into contracts with one another … and transfer funds to one another without accounting for the sums transferred.

The congressional inquiry into São Paulo public works contracts coincides with the results of an earlier survey by Conceição Lemes, of the Web log Viomundo, based on data from the Transparência São Paulo Web log, which specializes in the analyis of public spending.

Based on this information, it was possible to detect that the contract with Dersa with respect to the Tiete project (R$ 415 million) was signed by Paulo Vieira de Souza, aka «Paulo Preto», Dersa’s director of engineering until April 2010, and by Dersa CEO and superintendent Delson Amador.

With intimate ties to the PSDB — social democrats — «Black Paulo» was reputedly a fundraiser for party election campaigns and at one point was accused of making off with R$ 4 million supposedly earmarked for the Serra for President campaign.

Black Paulo and Amador also figure in the federal police Operation Sandcastle in which executives of public works contractor Camargo Corrêa were accused of mounting a bribery scheme in public works projects.

In 1997, when Andrea Matarazzo of the PSDB presided over the company, Delson Amador was named CEO of the state-owned electric company (Cesp),which was later privatized.

He was responsible for auditing public works projects involving Camargo Corrêa, such as the Porto Primavera generation plant and the Ponte Pauliceia, a bridge over the Paraná River linking Pauliceia, São Paulo and Brasilândia, Mato Grosso do Sul. Amador was Matarazzo’s chief of staff when Matarazzo headed the Sé subprefecture in metro São Paulo.

A certificate issued by the São Paulo Junta Comercial – the corporations registry – indicates that Heraldo Puccini Neto, Delta’s regional director for São Paulo and the Brazilian South, is also the legal representative of the Nova Tietê consortium.

Federal police wiretaps show that Puccini is one of the closest confidants of Carlinhos Cachoeira. Documents from federal police Operation Monte Carlo point to to Puccini as one of the persons used by the scheme to prepare bids for public works projects.

Todd-Frank and The Risco Brazil

Source: Folha de S. Paulo | 19/02/2012

In an item on financial market regulation in today’s Folha, the São Paulo daily appears to be mistaken or confused about the Dodd-Frank Act of 2011  when it summarizes legal provisions that actually belong to the Foreign Corrupt Practices Act.

Dodd-Frank deals extensively with oversight of trading, banking and lending practices by the SEC and CFTC. The bill establishes an Office of Financial Research and contains provisions for the registration of foreign regulatory bodies — such as Brazil’s CVM.

The terms bribe and suborn appear in the law only once, in a passage governing independence of real estate appraisals.

But this development is news to me, I will have to ponder it. In the meantime, I translate.

A bill passed by the U.S. Congress that punishes bribery of public officials, and pays whistleblowers more than $100,000, has altered the day to day routine of Brazilian companies in the United States. Filipe Coutinho reports ($$$).

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