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

“Did Larry Rohter do good journalism?” Brazilian Press Association, 2004. The government tried to have the Times reporter’s visa cancelled over a [bullshit hit-piece sourced to sleazy hacks, when sourced at all] implying the president of Brazil was a drunken lout. Sponsoring the habeas corpus that allowed him to stay: then-Senator Sérgio Cabral, now governor of Rio de Janeiro.

Attribution to another publication … cannot serve as license to print rumors that would not meet the test of The Times’s own reporting standards. Rumors must satisfy The Times’s standard of newsworthiness, taste and plausibility before publication, even when attributed. And when the need arises to attribute, that is a good cue to consult with the department head about whether publication is warranted at all. –The New York Times, Guidelines on Integrity

I’ve been reading a bit of Raymond Baker’s Capitalism’s Achilles Heel: Dirty Money and How to Renew the Free-Market System (Hoboken, NJ: Wiley, 2005).

One of Mr. Baker’s case studies reminded me of Larry Rohter’s recent story in the New York Times on the indictment of former São Paulo Paulo governor Paulo Maluf by the Manhattan District Attorney.

See Rohter on Maluf: The Blind Eye Misreading the Blind Eye.

Wrote Rohter and Anemona Hartocollis at the time — editorializing in the news hole and attributing their glitteringly general factoids to the usual “local press sources say”:

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.

Larry never explains why the incident is presumably “bizarre.”

So I have been wondering just how “bizarre” it really was for the Manhattan DA to get involved in a foreign criminal investigation.

Especially in the post 9-11 environment, in which money-laundering has become a key part of the GWOT.

It seemed implausible that an international financial center would not take an interest in dirty business being done in its jurisdiction. It is bad for business for cockroaches to be spotted ice skating on the grill of your sandwich shop.

That, presumably, is why the Japanese busted Citi last year for not asking enough questions of men with lots and lots of tattoos, if you remember the case.

Alien Torts. Foreign Corrupt Practices. Extradition treaties. International conventions. KYC.

I am not a freaking lawyer, but I have vaguely heard that there are established legal mechanisms for such cases. Does anyone think the work of Baltasar Garzón is “bizarre”? His methods for claiming jurisdiction are certainly resourceful, but they work, do they not? Just ask the moldering corpse of Generalissimo Pinochet

Still, I have not been able to answer the question that the adjective “bizarre” in that lede invites with respect to the city so nice they named it twice: Are there any precedent cases?

I guess I could just call the Manhattan D.A. and ask, or even go to the library.

But that would be work. This is just a blog.

At any rate, yes, here’s one, from Venezuela: the case of Orlando Castro-Llanes, indicted by the ageless Morgenthau — first elected under Peter Stuyvesant — in 1996.

Some background first:

Another component of the nation’s [Venezuela's] discontent centers upon a major banking crisis that arose in 1994 and played out across the next decade. Carlos Andrés Peréz, president of Venezuela from 1989 to 1993, ran a particularly corrupt administration and was himself accused of misappropriating $17 million of government funds, leading to impeachment, removal from office, and confinement. During his time in power, he gave the nation’s bankers free rein, virtually without regulation, and they responded with risky lending, in many instances to their own affiliated enterprises, frequently cloaked in offshore international business companies (IBCs), often laced with outright fraud and, allegedly, supported by laundering money for drug cartels.

Salinas and the FOBAPROA affair in Mexico is a similar case.

And then what happened?

As Perez’s regime collapsed, his favorite financial supporter, Banco Latino, second largest in the country, collapsed as well. Even Fogade, the country’s federal deposit insurance agency, kept a third of its funds in Banco Latino. And Banco Latino had a Curaçao arm, Latino NV, with a loan portfolio of nearly a billion dollars, a third of which had been given to the bank’s own shareholders, managers, and related entities.

Holy cow! And then what happened?

Faced with such situations, prudent governments will normally reassure depositors that their funds are safe. Perez’s elected successor, Rafael Caldera, about to be installed in office, announced just the opposite: “Banco Latino’s problem does not concern me.”

Curioser and curioser.

With that, the financial contagion spread. Fogade took over 19 commercial banks and 10 mortgage banks. Some $7 billion was pumped into the financial system, while $4 billion in flight capital flew out of the system. Foreign reserves fell, interest rates soared to 65 percent trying to keep money in the country, and inflation, rising to 70 percent, devastated the savings of millions.10 Fearing assault or prosecution, more than 300 bankers hastily left the country, most to the United States where they already had ample resources. Eighty-one arrest warrants were issued, mostly for Banco Latino directors and managers, resulting in five convictions in later years. As an elderly woman reportedly said, “Their daily 30 pieces of silver cannot pay for all the lives that are destroyed by poverty, hunger and crime.”

And now to the Manhattan defendant in question:

Among the discredited bankers in Caracas was Orlando Castro-Llanes, a Cuban-born financier and ex-Fidel Castro supporter, who owned Banco Progreso and a string of other companies. The government seized his bank and the rest of his major investments in 1994, and Castro-Llanes repaired to Miami. In 1996 Robert Morgenthau, Manhattan District Attorney, indicted Castro-Llanes, his son, and his grandson on charges of defrauding depositors of $55 million in Venezuela and in Puerto Rico, where Banco Progresso had a branch. In 1997 they were found guilty on counts relating to the fraud, and each was sentenced to prison. Speaking several years later at a conference I organized in Washington, Morgenthau linked Castro-Llanes to “3,500 offshore corporations in Aruba, Curaçao, and elsewhere.”

Also involved in the case: An alleged political “fix” — though not an especially juicy one — in the form of illegal campaign contributions. On which more in a minute.

The New York Times Guidelines on Integrity, by the way, are quite clear on the issue of “press sources say”:

When we use facts gathered by any other organization, we attribute them. This policy applies to material from newspapers, magazines, books and broadcasts, as well as news agencies like The Associated Press (for example, “the Senator told The Associated Press”). In other words, even though The AP is a co-op and we are members, we do not treat its reporting as our own. When writing from a pool report, if we have not witnessed the events, we attribute them to the pool reporter. In a roundup, we may use a phrase like “reports from news agencies and New York Times bureaus.”

I would assume that means you have to attribute them by name.

Why would you grant anonymity to a source that publishes tens of thousands of copies or broadcasts to millions? I would tend to call that an implicit waiver of anonymity, wouldn’t you?

I guess all of the stories Larry files are roundups. He can hear the gunfire from his Copacabana condo, but the guy really does seem to crib all his coverage from O Globo and Veja.

When not simply rewriting the press release of the hard men in their hog heaven. See I Told You So: Rohter Simplifies the Plot Pra Inglês Ver.

I have not established that scientifically, mind you, but I do read the Brazilian press, thoroughly and frequently. Often laughing bitterly, although Brazil does have some excellent journalists. If you take the time to pick the baratas out of your media mingau, you can actually learn something.

Our preference, when time and distance permit, is to do our own reporting and verify another organization’s story; in that case, we need not attribute the facts. But even then, as a matter of courtesy and candor, we credit an exclusive to the organization that first broke the news.

Courtesy and candor are not notable Rohter characteristics. And here is the X da questão:

Attribution to another publication, though, cannot serve as license to print rumors that would not meet the test of The Times’s own reporting standards. Rumors must satisfy The Times’s standard of newsworthiness, taste and plausibility before publication, even when attributed. And when the need arises to attribute, that is a good cue to consult with the department head about whether publication is warranted at all.

Does Veja magazine’s “reporting” measure up to the Grey Lady’s standards? I don’t think so. And I think I can think of a few instances where Rohter’s local press sources are rather obviously Veja magazine. Most notably the “Lula is a Communist drunk” story.

So there’s a little project for a rainy day. Stay tuned.

More brief on the Castro-Llanes case:

Born in Cuba, Castro Llanes was head of a wing of that nation’s communist party until fleeing the island in 1959 following an alleged dispute with Fidel Castro. After landing in Haiti, Castro Llanes went to Miami, and in 1961 or 1962, depending on the account, arrived in Caracas, Venezuela with just $150 in his pocket. By the 1980s, Castro Llanes had become an influential businessman in Venezuela, earning a fortune in the insurance business. He began aggressively expanding his financial empire, becoming active in banking, real estate, finance companies, radio stations and newspapers. Ultimately, his Grupo Impresas Latinamericanos included among its holdings, the Banco Progreso in Venezuela, the Banco Progreso de Internacional de Puerto Rico, and the Banco Latinamericano in the Dominican Republic.

In March of 1991, following allegations of money laundering, U.S. Customs inspectors ordered the Banco Progreso accounts at New York’s Bank America International frozen, along with those of a number of other banks. Castro Llanes turned to his long-time legal advisor and business associate, Charles Intriago, for assistance. Mr. Intriago had known Castro Llanes for over a decade, and had acted as his principal legal advisor on matters related to the United States. In fact, they were so close that Castro Llanes provided $80,000 in start-up capital for Intriago’s Money Laundering Alert newsletter. In addition, Castro Llanes was reportedly seeking to have Intriago appointed U.S. ambassador to Venezuela. Intriago also organized a defense team for the Banco Progreso matter which ultimately convinced U.S. Customs to release the accounts.

Cheap irony alert.

In 1994, following the collapse of the Venezuelan banking system, Castro fled to the United States and settled in Miami. Venezuelan banking regulators seized Banco Progreso that December. Castro was later charged in absentia with bank fraud, embezzlement, and conspiracy by the Venezuelan government.

On April 4, 1996, Castro Llanes was indicted in New York along with his son and grandson on charges of a scheme to defraud in the first degree. He was convicted on grand larceny charges on February 19, 1997, and in April of that year sentenced to a term of one to three years in prison. The larceny involved defrauding depositors of the Banco Progreso International de Puerto Rico of as much as $55 million. His crime also cost the government of Venezuela more than $8 million.

It was the son who reportedly plotted to funnel illegal contributions from Panama to the Democrats:

After his family contributed $50,000 to the Democratic Party, Castro Llanes received red carpet treatment from the Clinton Administration over the coming year. Immeditaely after Bill Clinton’s election in 1992, Castro Llanes told Castro Barredo that they were hopeful that Intriago would be appointed as ambassador to Venezuela. While this goal did not come to fruition, Intriago did give the Castro family increased access to Washington, D.C., after President Clinton’s election. Castro Llanes, Intriago and Castro Barredo all attended the January 1993 inauguration of President Clinton. In October 1993, Castro Llanes, Intriago, Castro Barredo and Castro Castro returned to the United States. The first day that the group was in Washington, Castro Llanes and Intriago went to the White House for a reception for DNC donors. At this event, Castro Llanes had a picture taken with President Clinton. Castro Barredo was not invited to this event, even though it was he, not Castro Llanes, who had contributed $25,000 to the DNC.

In a non-banana republic, even friends of the big cacique can get indicted — even when the DA is from the same poltical party.

That seems to surprise Larry Rohter.

The man has apparently been out running fences for too long now.