Rohter on Maluf: The Blind Eye Misreading the Blind Eye

The reporter in 2001: Eerie likeness to Capt. Beefheart, a reputed failer of the teste da farinha with Fernando Collor’s flack in chief. Grey Lady: your Col. Kurtz seems to have gone off the reservation.

[This just in (August 14, 2007) “Supremes Finally Bork Maluf”]

Brazilian Politician Indicted in New York in Kickback Scheme (Larry Rohter and Anemona Hartocollis, New York Times, March 9, 2007).

Wasn’t Anemona Hartocollis a character in The Crying of Lot 49?

No, I am thinking of Oedipa Maas, wife of psychedelic disc jockey “Mucho” Maas of San Narciso, California.

In a somewhat bizarre entry into foreign affairs by the Manhattan district attorney’s office, prosecutors in New York City announced yesterday the indictment of Paulo Maluf, a major political figure in Brazil, in a construction kickback scheme at the expense of Brazilian taxpayers.

Since when does the New York Times editorialize in the lead paragraph of a news story?

What, I ask you, is so “bizarre” about the chief law enforcement officer of a major world financial center — whose mayor, senator and governor are pushing an elaborate plan to make sure that it remains a major world financial center, emphasizing governance standards and reputational risk — bringing a case related to foreign corrupt practices?

We do have laws against that sort of thing, you know.

We do not live in a banana-republican financial paradise with kinder, gentler extradition laws for the Bebe Rebozos and Augusto Pinochets of the world. Do we?

See also 

• International Thief Thief Indictments: Precedents For Larry Rohter’s Editor to Consider

Invest in our banks and markets. Your money, and your reputation, are safe.

See also “Foreign Bribery Investigations and Possible U.S.-Based Securities Exposure” for a backgrounder from a dead-serious D&O nerd.

And besides, in the era of the Homeland State, banks are supposed to do a better job of knowing their customers, right? As Citi found out in Japan, right? Men with lots and lots of tattoos? To take just one instance.

A topic I follow with great interest myself.

The New York prosecutors accused Mr. Maluf, the former mayor of São Paulo and currently the leader of a rightist party in Brazil’s Congress, of taking part in a scheme to submit inflated and false invoices to contractors involved in building Avenida Agua Espraiada, a giant highway in São Paulo.

Aguas Espraiadas — plural. And it is not a “highway,” it is an avenue. With stop signals and crosswalks and stuff like that. It is in the Brooklin [sic] district, where all the streets have NYC-themed names. It is near the World Trade Center São Paulo, in fact, which is on the Av. Luis Carlos Berrini [sp], which crosses Av. Aguas Espraidas. Not far from the U.S. Consulate, there in the Chácara Santo Antõnio, in fact.

Want the Google Earth coordinates? The really ghastly boondoggle of the Maluf era, however, is the Aguas Espraiadas sanitation and urbanization project, designed incorporate the shantytown of that name into the urban grid. “Half-sunk, a shattered visage lies.” It is a sight to see. The new Governor promises to have it up and running soon, well over a decade after breaking ground and starting that “vast sucking sound” that Ross Perot talked about. See also the Rodoanel project.

Maluf is also the former governor of the state, though he was never elected to that office. Appointed by the more Pinochetist generals during the pre-Geisel days of the April Fools Revolution. Geisel, as it was interesting to hear the Brazilian foreign minister pointing out in a recent interview, was an early proponent of “independence” in the foreign policy area.

If Paulo Maluf remains “a major political figure” in Brazil, I am a monkey’s uncle. (I remember reading that in his last stint as a federal deputy, he attended something like 20 out of 400 sessions — spitball number, but it was on that order.)

And my nieces and nephews are fully human mapuches and curumims, I am quite sure of that. I have counted toes, probed belly buttons with saíra feathers, and checked for tucked-away tails.

“If your mother says she loves you, get another source before you run it.”

Mr. Maluf had just gotten out of jail here when he ran successfully for election, hoping to take shelter in the giant pizza oven being heated up by the Brazilian Supreme Court in the Cardoso-era Sardenberg and Jungmann cases.

See Brazil: Extra-Large Pizza With Everyone On It?

The fire has apparently gone out in that oven, note.

On which see Adventures in the Brazilian Mediasphere; Mendes Forfends.

Maluf’s miniscule PP has no discernible ideology at all, by the way, other than “get Maluf elected so he can be tried in the Supreme Court under a law with no criminal penalties attached.”

The interesting thing to look for now will be whether Brazil’s elections courts — “the time has come to purify the nation” — go after Maluf for practicing caixa dois — money laundering into political slush funds.

Robert M. Morgenthau, the Manhattan district attorney, said that after the inflated invoices were paid by the municipal agency supervising the highway project, the contractors generated kickbacks to Mr. Maluf, his son, Flávio Maluf, and others.

One would assume that Mr. Morgenthau is acting on a request from Brazilian authorities, and relying on facts they provided him.

Does that not belong in the recital of facts here?

Maluf: Not one of Brazil’s favorite or more influential politicians. First appointed to office by pro-U.S. dictator. Lost nearly every election he ever contested. A mere bank-bencher legislator now, and a political pariah. So in what sense is he to be called “prominent”? Because his bald spot is so shiny?

Some of the money was moved to a New York bank account and then to other locations, including Jersey, one of British Channel Islands, Mr. Morgenthau said.

Larry Rohter consistently blows smokescreens out his ass for some really, really skeevy actors down here, it seems to me. Judging from his conduct, he is a player, not a spectator, and proud of it, even though Times reader are supposed to buy him as a kind of international Kurt Gowdy, calling the play by play on Pelé. It really boggles the mind.

The indictment accuses Mr. Maluf and four co-conspirators of stealing more than $11.6 million, the amount that prosecutors said could be directly traced to the kickback scheme. But Mr. Morgenthau said that Mr. Maluf was believed to have stolen more, and that bank records showed that from November 1997 to May 1999, $140 million passed through an account secretly controlled by Mr. Maluf at Safra National Bank in New York.

Will bank regulators jump in next? Treasury? Where’s FINCEN?

He said the account had been opened by Vivaldo Alves, identified by prosecutors as a black-market money transmitter, and maintained under the code name “Chanani.”

Post hoc ergo proper hoc? Magalhães had to visit the emergency room with heart trouble on the day this was announced.

Ultimately, he said, some of the money in the Jersey accounts was repatriated to Brazil and the Malufs through the black market.

This is going to be a fun case to watch.

“This case represents corruption and greed on a colossal scale,” the district attorney said at a news conference in his Manhattan office. “We’re not going to be Grand Cayman on the Hudson.”

As a NYC voter with a living that is linked to the finance business ecosystem, I say amen with Morgy on that sentiment.

A statement issued yesterday by Mr. Maluf’s press office in Brazil said he would welcome a trial in the United States because it would “finally permit Paulo Maluf to defend himself and prove he is innocent of the accusations made against him.”

How about also talking to the Brazilian cops who made the freaking case?

“Paulo Maluf does not have and never had a bank account in New York,” his statement continued. “All of the false accusations made against Paulo Maluf have never been proven and are the fruit of political persecution.”

On old friends of Maluf who cry “political persecution” everytime they get a parking ticket, see

• “In Defense of Amnesty”
• Revanchishmo

The indictment of Mr. Maluf, who is 75, on corruption charges in the United States will surprise Brazilians only for its timing. Mr. Maluf has been investigated and indicted numerous times on corruption charges in São Paulo.

Bullshit. He has been jailed only once, and that to prevent him decamping while awaiting trial, or intimidating witnesses against him.

Maluf has some heavy, heavy friends.

He has never been convicted of anything, however, although he has been ordered to return smallish, in proportional terms, amounts of misallocated, ahem, funds.

Impunity is not suprising to Brazilians.

Watching massive pigf**ing crooks with friends in jackboots going to jail to rot would be something else, however.

Which actually, I would say, makes this something of a pleasant surprise to Brazilians I talk to.

If it pans out. People have been fooled by false prophecies of the impending Apocalypse before.

“Are we finally going to get this grotesque, gargantuan parasite?”

There will be dancing in the streets.

That is my prediction. Check back later and we will see who has to buy the beer, me or Larry.

In 2005 he spent 40 days in jail while awaiting trial on accusations of racketeering, tax evasion and money laundering, winning release because a provision in Brazilian law allows people older than 70 to answer to charges at home.

And to run for office as a form of forum-shopping to avoid a criminal indictment.

Brazilian elections governance at work on behalf of grateful taxpayers. On Brazilian elections authorities, see also Purity of Essence: The Chorus of Hysterical Virgins Swells to a Roar and The People Have Faith in Electronic Voting!

Many Brazilians are critical of their own justice system, which they see as permeated by corruption and politics.

You actually read very few criticisms of the justice system in the press. See, for example, my observations on press coverage of the Pertence story, Blackout on Pertence Charge; Mello Also in the Mishegaas?

“Many Brazilians are critical.”

A fine instance of the “glittering generalities are more cost-effective” content managers of the New New York Times applying their “more realistic” Journalism 2.0-based theory on sourcing in news reports: See Flexibilizing Infodensity.

This is just not true, according to the Brazilian judiciary, for example. See The People Have Faith in Electronic Voting! and Brazil’s IBOPE: “Election Skullduggery Triples”.

But see also Brazilian Judges, Lawyers in Corruption Dustup.

If you listen to what the main actors in this debate actually say, you get a better idea of the shape of things.

You could even, what an idea, interview those actors for your world-class newspaper. You are the man on the scene, are you not? The man with the golden Rolodex and the Copacabana condo?

Santos Dumont to Congonhas, culturally, is NYC to LAX, it is true. But physically, every hour on the hour, it is New York to Boston.

Except that the Charles River lacks capyvaras. Too bad. Capyvaras are groovy beasts.

And because of skepticism about the concept of separation of powers, the indictment in New York, even though it comes from a Democrat with no connection to the Bush administration, is likely to be seen by many Brazilians as an expression of the American government’s support for President Luiz Inácio Lula da Silva — a gift on the very night that Mr. Bush landed in São Paulo for meetings with him.

“Is likely to be seen by many Brazilians.”

Wow. As the “mountain of money reporters” here said to Edmilson “Bruno Surfistinha” Bruno, “that is really f***ing sleazy.”

And those, mind you, are the kind of people whom Rohter tends to vouch for under the rubric of “local press sources.”

Putting Mr. Maluf on trial in New York may be difficult, though. Mr. Morgenthau said that the United States did not have an extradition treaty with Brazil covering Brazilian citizens, but that his office would seek to arrest Mr. Maluf if he left Brazil. “That leaves him a prisoner in Brazil,” Daniel Castleman, Mr. Morgenthau’s chief of investigations, said yesterday.

No extradition? That could well explain what Alckmin is doing at Harvard. See Alckmin Goes to Harvard. I mean that semi-seriously.

I am telling you: Much, much stranger and more inexplicable things have happened in recent years than seeing increased international police cooperation on foreign corrupt practices cases.

The indictment accuses Mr. Maluf of using some of the stolen money to pay personal expenses in Brazil and the United States, including the purchase of jeweled antique eyeglasses and watches at Sotheby’s and Christie’s auction houses in New York, as well as campaign expenses.

That latter item refers to what is known here as caixa dois.

See also Belo Horizonte Baldy Bombshell to Burst for a notorious(ly undercovered) pending case involving the president of the PSDB political party.

The other defendants are Flávio Maluf; Simeão Damasceno de Liveira, the finance director of a Brazilian construction company involved in the scheme; Joel Guedes Fernandes, a cashier at the construction company; and Mr. Alves.

He is, in fact, the former finance director of one of the construction firms involved in the Yellow Line Consortium, of “Sampa Subway Smoking Hole Pandemonium” fame.

The indictment charges them with running the kickback scheme while Mr. Maluf was mayor in the mid-1990s, and afterward, when a successor handpicked by Mr. Maluf was in office, with the help of friends and allies in the municipal government.

I remember reading a story in the New York Times a year or so back waxing nostalgic about the heyday of the “Brazillionaire” in the Upper East Side real estate market.

Whatever happened to the penthouse-hungry Brazillionaire? We loved that guy. Great parties! Cut vast checks at the drop of a cangaceiro hat!

We may be about to find out.

Mr. Castleman said that about $26 million had been frozen by the authorities in Jersey and that the authorities in Brazil and New York were trying to have it returned to Brazil.

Earlier reports here in Brazil mentioned $11 million, as I recall — off the top of my head — and accounts maintained in the name of various other members of the Maluf version of the al-Tikriti tribe.

Let me see if I can download the indictment.

See if Larry and, er, Anemona, left out anything that might be of interest to Brooklynites.

You can generally do that where I come from, you know. Which is Brooklyn. Unlike here. Which is Brooklin, out there beyond Moema, with its great German sausages.