Cultural Reference Lexicon Entry No. 48: Daslu

Daslu House Music CD, export edition, $25

One of the more interesting publicity salvos this week in Brazilian politics lay behind this headline in the Folha de S. Paulo: “Lula orders attack on Alckmin’s family taken down [from campaign Web site].”

The item had to do with the fact that Alckmin’s daughter was an executive [correction, a manager and buyer --Ed.] at the Daslu luxury boutique in São Paulo, and that Alckmin, as governor, had cut the ribbon on the shop’s new 20,000 square meter facility in early 2005 — shortly before the federal police and an army of auditors stormed in and arrested everyone in sight on lurid charges worthy of a Paraguayan Marlboro counterfeiting mafia.

The odd thing, of course, is that one might not have remembered that Alckmin’s daughter was involved there except for that headline.

Naturally, smaller members of the PT’s coalition — particularly the Vermelho news service of the PCdoB — did not take the item down from their Web sites.

I’ll translate this review of the Daslu case by Altamiro Borges so you can add “Daslu” to your lexicon of current cultural terminology, then turn in another entry to what seems to me to be the most substantive broadside from the contender’s camp this week: “Serra says PT confuses party and government.”

This was the focus of a major piece in Veja a week or so ago about the “revolving door” between party offices and government charges under Lula.

My off-the-cuff take is that this is less a scandal than a matter of “politics as usual,” but since the PT has a history of calling for an end to “politics as usual,” it certainly seems like fair play to hammer on this theme, which you will find just as hotly debated on the left.

And naturally, comparisons with Mao and Stalin come up as well.

But that’s bunk. More important is what I call the “great quango fallout” because it essentially has to do with whether or not the PT should govern like the Blair quango state — it has ties to Labour in Britain much as many parties of the Latin American right have ties to the IRI — or draw a sharp line between the public and private sphere, both for the sake of government probity and for the sake of the democratic tradition in the PT’s own party caucus.

The “Shiites” of the left think political wheeling and dealing in complex public-private initiatives and structured-finance deals is slimy and nontransparent. The PSDB is smart to target that discontent. But the riposte would naturally be to point to Alckmin’s style of government in São Paulo.

Hence the following anecdote about the fabulous Daslu raid of 2005.

Possibly because of his puritanical upbringing in Opus Dei, Geraldo Alckmin likes to present himself as chaste and immaculate in the area of ethics. In the debate on TV Bandeirantes, he made a point of showing how “indignant” he was with corruption and criticized Lula for saying repeatedly that he “didn’t know” about misconduct in his government. “Just go ask your friends of 30 years”, needled the soap-opera moralist in a moment of well-rehearsed wrath.

However, in order to keep up appearances and be consistent, Alckmin ought to have made a public apology for having cut the ribbon at the inauguration of Daslu, that temple of consumption for the super-rich that is now on trial for smuggling, tax evasion and other crimes. “I didn’t know”, he could have said. He could also have apologized on behalf of his daughter, Sophia Alckmin, for having been the chief buyer at this smuggling operation. “I did not know”. And he ought to have explained why the board of Daslu, always accompanied by his daughter, used to meet with his state treasurer, Eduardo Guardia. “I didn’t know”. Between proselytizing for Opus Dei and his busy schedule as governor, perhaps he didn’t have time to keep an eye on his daughter’s business activities.

Alckmin arrived by helicopter

Daslu’s new location, a four-story, 20,000 m2 building in a wealthy neighborhood of São Paulo, was opened in June 2005. Columnist Mônica Bérgamo of the Folha de S.Paulo, described the carnival of the ultrarich in ironic tones. “And the violins of the Daslu Orchestra, with its 50 musicians, commenced playing. 12 o’clock on a Saturday. Alckmin, who arrived by helicopter, cut the ribbon. ‘Daslu is the perfect marriage of good taste and job creation’, he said. The family Alckmin itself got two of those jobs: one for the daughter [director for new business] and his sister-in-law, Vera”.

Again from the piquant narration of Mônica Bérgamo, “Sophia pulls her daddy by the arm and the tour of Daslu begins. First floor, women’s imports. Alckmin enters the Chanel section, where a black velvet tuxedo goes for R$ 22,600, a sandal made of pearls, denim and satin and costs R$ 2,900 and a multipocket purse fetches R$14,000. The salesgirls inform the governor that there are 50 names on the waiting list for that last item, which is cheap compared with the Dior crocodile-skin purse, at R$ 39,980, and the more expensive Louis Vuitton, with mink: R$ 23,000″.

“I’m going to slip into some jeans.”

“Sophia takes her daddy up to the second floor. She shows him a helicopter suspended from the celing. ‘Lovely motorcycles, Sô’, says Lu Alckmin to her daughter on catching sight of a Harley Davidson parked near the stairs (R$195,000). Alckmin heads over to Ermenegildo Zegna, passing Ralph Lauren, where a t-shirt can go for R$ 2,460. ‘Everything is so colorful’, he observes. The governor’s attention is drawn by the cars. On show is a R$365,000 Volvo, a $7 million motorboat, and $300,000 plasma TVs”.The governor begins to make his way back. The reporters ask Lu Alckmin: Is that a Chanel bag? It is. And the blouse? Burberry’, Lu responds. ‘I like the classics’. The governor, who says he wants to buy ‘just a few shirts’ at Daslu, picks up the pace. He’s still got to get to Carapicuíba today. And Lu has to run back to Bandeirantes Palace. She has to change, ’slip into some jeans’, for another engagement: an event in Água Branca in which trucks from various neighborhood will deliver warm clothing so that poor children can get through the winter that now looms”, Mônica Bérgamo writes, with consummate sarcasm.

“A criminal organization”

A few months after the governor cut the ribbon at Daslu, an old lawsuit against the owners of the deluxe boutique finally got rolling. At the end of December, Judge Maria Isabel do Prado, of the 2a Vara de Justiça Federal in Guarulhos (SP), received the accounting and tax records of the firm. To get access to these records, the judge had to threaten the owner, Eliana Tranchesi, with arrest, along with her brother Antonio Carlos Piva and the shop’s financial officers.

These records proved the charges brought the Federal Public Prosecutor, that Daslu was colluding with importers to replace invoices from foreign brand-name manufacturers with false invoices that overstated the price. Based on the accounting and tax records, Eliana and her brother were charged with racketeering, smuggling and perjury. In the case of the influential businesswoman, the potential penalties for these crimes add up to 21 years in prison. According to Jefferson Dias, a federal prosecutor, Daslu was a racketeering scheme, an organized criminal enterprise. “It satisfies the definition because it had a hierarchy and a division of labor”.

Thanks to her close ties with the social elite and state authorities, the owner of the deluxe shop did not even take the precautions adopted by most tax evaders. “The sense of impunity made them careless, and the situation got out of control”, says Matheus Magnani, another prosecutor involved in the investigation. Eliana Tranchesi participated directly in the illicit scheme, even sending her foreign suppliers a request, written in English, not to send the genuine invoices when the yshipped her orders. The businesswoman still faces charges of tax evasion and perjury.

ACM wept and Bornhausen fumed

Given the gravity of the charges and the attempt to cover up evidence, the Federal Police launched Occupation Narciso on June13, 2006, occupying Daslu with 250 agents and 80 tax auditors. The unprecedented operation was highly regarded by the public, but the ultrarich, the media and various elite politicians made a huge stink. The slimy Veja magazine even stated that the federal police operation was a ploy by Lula to direct attention away from political scandals. Senator Jorge Bornhausen, president of the PFL, called it “an act of retribution”. And Antônio Carlos Magalhães, a frequent customer, wept when he spoke to the ritzy retailer on the phone who had to spend a couple of hours in detention. And the powerful business association FIESP organized a protest march, with pickets.

Note on “retribution” (revanchismo): the term is often used to refer to the amnesty of the 1980s, whereby government was returned to civilian control in exchange for no “retribution” against officials of the dictatorship. Meaning no criminal liability for torturers, among other things. The right is constantly crying revanchismo when it doesn’t like what the government is up to here. –Ed.

The protest leader, PSDB deputy Alberto Goldman, explained the rationale for the protest. According to Goldman, “this arrest could lead to an economic crisis. Businesses wil say: why invest in Brazil if we are going to wind up getting arrested?”. That is: in the Toucan view of the world, the only folks that ought to be in jail in this country are the chicken thieves! The businessman who evades taxes, sends money out of the country illegally or commits other crimes can’t be touched and can even count on the help of certain politicians- who will later get a nice campaign contribution. The Daslu scandal is proof that corruption rules the day in the world of capitalist business.

Meetings with the State Treasurer

Operation Narcissus also raised strong suspicions about Geraldo Alckmin, who had inaugurated the megastore in São Paulo. At the time, the media played up the fact that his daughter, Sophia Alckmin, was a prominent “dasluzete”, responsible for new business at the store. in the wake of the PF investigation, allegations appeared that this influential employee had met with the state treasurer, Eduardo Guardia. The governor denied it and the media was silent on the subject

But summon to testify before the State Assembly, Guardia admitted that the governor’s daughter and the other executives of Daslu had met with him at the Treasury at least twice in the first half of 2005. The visits coincided with a request from Daslu for authorization from the Treasury to implement a single-entry accounting system, little used in Brazil and more vulnerable to fraud. The treasurer denied any “concession of privileges” but stammered while trying to explain the visit of the governor’s daughter A special audit from the Accounting Tribunal was resquesed into the case.

According to Renato Simões, a PT state deputy, no dbout remains about the governor’s ties to Daslu. “The lideres of the PSDB in the Assembly first denied that Alckmin’s daughter had visited the treasurer. But he confirmed the visit. This means that there was an attempt to use the governor’s daughter to ease the way for permission to use single-entry accounting”. The PSDB in the state, who now try to pose as vestal virgins of ethics while dressed in Daslu from head to toe, owe us an explanation. The craven media, which hushed up the affair, does as well. Já o presidenciável Geraldo Alckmin, caso seja acuado, poderá dizer: “Eu não sabia”.

Snide asides aside, that all conforms pretty closely to the reading I did on the case, although the involvement of Alckmin’s daughter I somehow missed reading about.

A friend of mine interpreted for a New Yorker magazine reporter that came down to do a fluffy profile on the fabulousness of Daslu a few years ago, before all this broke out, so I’ve followed it with interest, along with the course of its trademark dispute with a retail clothing line called Daspu (as in das putas) , run by an NGO that serves as a kind of labor union to street prostitutes in Rio de Janeiro and designed by the prostitutes.

Come to São Paulo, take a stroll through the Praça da Sé with me early in the morning, then we’ll lunch at Daslu.

I think you will agree with me and Mino Carta: it’s like freaking Paris in 1789 here.

So when Lula thunders against the “São Paulo elite” and wins elections doing it, these people really have no one but themselves, and their public relations advisers, to blame.

Big topic at the next debate: Public security and the PCC shutdown of the city this summer. Lula will boast of his efforts to crack down on corrupt police, figures about which are just starting to bubble up on the TV screen — along with images of that infamous “mountain of cash.”

If it turns out, as the grapevine is murmuring, that someone in the PSDB paid off Capt. Edmilson to snap and leak the photos — he lied to the custodians of the evidence about being authorized to access it, and is being investigated by internal affairs — you could see a media countercoup with interesting timing.