Brazil: The Minas Maracutaia Emerges!


Marco Valério Fernandes de Souza: Kojak fan, mineiro, ad man and indicted slush-fund facilitation defendant. The hand gesture pictured in this Wikipedia portrait, in Brazil, by the way, means “shove it up your ass” rather than “okay.” A little Brazilian Wikihumor by the poster.

Time will tell whether the emergence of the quasi government is to be viewed as a symptom of decline in our democratic government, or a harbinger of a new, creative management era where the purportedly artificial barriers between the governmental and private sectors are breached as a matter of principle. — Kevin R. Kosar, “The Quasi Government: Hybrid Organizations with Both Government and Private Sector Legal Characteristics” (Congressional Research Service, February 13, 2007)

In the next few days, the federal attorney, Souza, will present the Supreme Court with a case apt to provoke a political earthquake just as devastating as the “big monthly” scandal. … The document puts an end to a political battle between government and opposition that has dragged on for two years, ever since the congressional panel investigating the financial scheme in the federal government refused to investigate the slush fund used by Azeredo.

Claudio Julio Tognolli reports for Consultor Jurídico on new information in the “Belo Horizonte Baldy” money-laundering case down here in Brazil.

The case involves laundering public and undeclared private money into political slush funds — illegal, undeclared campaign funds, stored offshore — through the budgets for outsourced advertising and other services related to public events and programs.

Such as Rock in Rio, as I think I read, and a motocross championship.

The current minister of institutional relations, Walfrido dos Mares Guia of the PTB, was the allegedly the de factor campaign manager of one of the politicians who used, or benefited from, or masterminded the scheme, Eduardo Azeredo of Minas Gerais. I believe he has addressed his role in this case before, but since Tognolli does not bother gisting that for me, I guess I am going to have to try to google that up for myself.

(Okay, IstoÉ magazine reports that he denies it, but it points to evidence to the contrary.)

Azeredo stepped down as president of the PSDB and co-chair of the “For a Decent Brazil” presidential coalition during last year’s elections over the affair. My impression is that his defense is going to be that he was shocked! shocked! to discover that such sleazy tactics were being used on his behalf.

The Agência Estado, by the way, mentions all the principal figures named in the report, not just the one described as a “minister of Lula,” as the CJ does in its headline:

SÃO PAULO – A revista IstoÉ desta semana publicou reportagem sobre o chamado “mensalão mineiro”, que incriminaria o senador Eduardo Azeredo (PSDB-MG), o ministro das Relações Institucionais, Walfrido dos Mares Guia, e o governador de Minas Gerais, Aécio Neves, em um esquema de arrecadação de dinheiro muito semelhante ao do PT, descoberto em 2005.

IstoÉ magazine this week published a report on the so-called “big monthly of Minas Gerais,” a case is says may incriminate Sen. Azeredo as well as the current minister of institutional relations, dos Mares, and the current governor of Minas Gerais, Aecio Neves, in a scheme very similar to that used by the PT, discovered in 2005.

Neves? The current governor? Touted as a reform-minded serious adult working to clean up the state?

Talked about as a possible PSDB presidential candidate in 2010?

Now why did CJ use this gist of somebody else’s gist of leaked report to tell me about one new suspect, and not the other, I wonder?

These scandal stories get really convoluted.

Especially with the constant barrage of leaks, released in dribs and drabs with maximum rhetorical hysteria in order to try and fry people in the press.

Sounds like I should just go to the horse’s mouth and read what IstoÉ published.

I just picked up a copy, in fact, along with Carta Capital and the Estadão. And a rack of ribs that you would not believe, BBQ fans. With roasted new potatoes. Those little sausages. My standard Saturday afternoon hammock fare. Throwing the bones on the floor and staining the pages with grease and beer. I am Fred Flintstone, basically.

IstoÉ’s lede graf:

Nos próximos dias, o procurador-geral da República, Antonio Fernando de Souza, apresentará ao Supremo Tribunal Federal (STF) uma peça jurídica capaz de provocar um terremoto político tão devastador quanto o do Escândalo do Mensalão. É a denúncia contra os políticos envolvidos no inquérito policial 2245-4/140-STF, que investiga o chamado “tucanoduto” – o caixa 2 da malsucedida campanha do senador Eduardo Azeredo ao governo de Minas Gerais, em 1998. Com mais de cinco mil páginas, o inquérito tem num relatório da Polícia Federal a completa radiografia de como foi montado o esquema e quem se beneficiou com ele.

In the next few days, the federal attorney, Souza, will present the Supreme Court with a case apt to provoke a political earthquake just as devastating as the “big monthly” scandal: his indictment of the politicians involved in Police Inquiry No 225-4/140-STF, investigating the so-called “Toucan pipeline” — the political slush fund from the unsuccessful gubernatorial campaign of Eduardo Azeredo in Minas Gerais in 1998. With more than 5,000 pages, the indictment contains a federal police report [that is] a complete X-ray of how the scheme was set up and who benefited from it.

The report says that 159 candidates from 17 parties got money from the scheme.

The Estadão plays the story the straightest, I think, simply naming the names of the most prominent persons likely to be named. On the other hand, there is this caveat about the current governor of Minas:

Com exceção dos 82 deputados federais ou estaduais que receberam, em nome próprio ou de assessores, depósitos feitos diretamente pelas empresas de Marcos Valério, não é possível por enquanto assegurar que os repasses ao restante dos 159 políticos, incluindo o então candidato a deputado federal Aécio Neves, tiveram origem no caixa 2 operado pelo publicitário e pelo núcleo central da campanha de Eduardo Azeredo.

Except for the 82 federal and state legislators who received deposits, in their own name or in the name of aides, from the companies controlled by the Bald Man, it is not yet possible to state with confidence that the money provided the other 159 elected officials, including then congressional candidate Aécio Neves, came from the slush fund operated by the ad man and the inner circle of Azeredo’s campaign.

Good. Because I would actually kind of like to be able to think well of some of these Toucans.

The ones who do not go around calling their political opponents “Nazis,” and otherwise practice the art of the gabbling screaming meme.

It’s better to have a choice between two responsible adults with different views than between a responsible adult with only one set of views and a gabbling antidemocratic Moonie.

The cover of IstoÉ shows the three names named by the Estadão as aces in a deck of cards, borrowing a metaphor from the hunt for Saddam and his henchman.

But it seems from the body of the report that we do not know for sure yet who the alleged aces are and who may have merely been knaves.

Look, for the life of me, I still say I simply cannot understand why Brazilians are being treated to the trial of the PT 3, followed by the trial of the Minas 159+, rather than one big systematic borking of everyone who ever used the Belo Horizonte Baldy cash pipeline.

It really looks an awful lot like it was exactly the same scheme, even though the Estadão refers to it as “similar.”

It was run by the same people using the same banks and the same methods.

It seems like it was “similar” only in the sense that identity is the perfect degree of similarity.

No one is more similar to me than I am, in other words. Because I am me.

Actually, though, the one point of contrast that IstoÉ mentions is that the use of public money in the Minas phase of the scheme was much more pronounced, according to the leaked assessment by the cops.

Recall that the PT 3, for example, were pointedly not indicted on improper use of public funds. Which leaves improper private donations to be accounted for in their trial.

But that there was no credible evidence that they ripped off taxpayers is quite a significant factoid, given the folklore surrounding the case.

Still, I really do think that honest, public-minded coverage of the case would stick to calling this case the valeriodúto — “The Bald One’s Funny-Money Pipeline.”

Would treat it as one continuous matter, centered on the Bald Man.

Would make an effort to measure the volumes of cash that pumped through it in each and every year it operated.

Because some claim the booming heyday of the scheme was when the head of the national Toucans ran it.

Is that true?

Give me some dollar figures, please.

Would try to keep careful score of which politicians and parties used it and which ones did not.

How much money did Baldy launder, and when was it laundered? Who was it laundered from, and to? To be spent on what?

That, to me, is the proper way to frame this running story.

Otherwise, the current government’s constant complaint — that coverage of the case is viciously slanted and partisan — tends to look awfully credible. See

A acusação versa sobre a campanha eleitoral à reeleição, em 1998, do ex-governador de Minas Gerais, hoje senador, Eduardo Azeredo (PSDB), e descreve o esquema apelidado de “mensalão mineiro”. Obtido pela revista Consultor Jurídico, o documento, assinado pelo delegado federal Luiz Flávio Zampronha e que tem trechos divulgados pela revista IstoÉ deste fim de semana, aponta o ministro Walfrido dos Mares Guia como uma das partes atuantes de “uma complexa organização criminosa”. O delegado pede a quebra dos sigilos da empresa do ministro Walfrido, a Samos Participações Ltda.

The charges relate to the 1998 reelection campaign of former Minas Gerais governor (and sitting senator) Eduardo Azeredo (PSDB), and describes the scheme that has been nicknamed “the big monthly of Minas Gerais.”

The nickname tends to prejudge the outcome of the PT 3 case, I think. See also

Note that the newsweekly also refers to the other nickname for the case: “the Toucan cash pipeline.” The big-billed bird is the mascot of the PSDB, or Brazilian Social Democratic Party.

Obtained by [“leaked to?” how did they get it and why can’t they tell us? –Ed] this magazine, the document, signed by federal police investigator Zampronha, passages from which were published in IstoÉ magazine this weekend, point to dos Mares as one of the parties to “a complex criminal organization.” The fed is requesting access to the private records of the minister’s company, Samos.

Segundo a PF, o comitê da campanha montou uma estratégia “para legitimar (lavar) os recursos que seriam empregados durante a dispendiosa campanha, tendo por base a utilização das empresas de publicidade de Marcos Valério no desenvolvimento da sofisticada técnica conhecida por commingling (mescla)”. Ainda de acordo com o relato do delegado, a mescla consiste “na utilização de estruturas empresariais legítimas para a reunião de recursos obtidos licitamente, a partir de atividades comerciais normais, com outros obtidos ilicitamente”.

According to the feds, the campaign committee devised a strategy for “legitimizing (laundering) money to be spent on an expensive campaign, using the advertising agencies of Marcos Valério as the basis for a sophisticated technique known as commingling.” Also according to the report, this commingling consists in “the use of legitimate business organizations to mingle funds obtained legally, through normal business activities, with others obtained illegally.”

Zampronha afirma que, no caso da campanha de Azeredo, “tratavam-se de fundos públicos desviados das administrações direta e indireta do Estado de Minas Gerais e de valores repassados à coligação eleitoral por empresários, empreiteiros e banqueiros com interesses econômicos junto ao poder público daquela unidade da Federação”.

Zampronha says that in the Azeredo campaign, “These were public funds misappropriated from direct and indirect state agencies as well as money donated to the campaign coalition by business owners, public contractors and bankers with economic interests related to public officials in that state.”

Pelas mãos da Agência Brasileira de Inteligência (Abin), o relatório foi bater no Planalto, onde é guardado a sete chaves como uma das jóias da coroa. Mas o documento está nas mãos do ministro Joaquim Barbosa, relator do caso, e do procurador-geral da República, Antonio Fernando Souza.

After passing through the hands of the Brazilian Intelligence Agency (ABIN), the report wound up at the office of the federal presidency, which it is as closely guarded as one of the jewels in the crown. But the document is also in the hands of Justice Barbosa, who is supervising the case, and the federal attorney, Souza.

Datado de 4 de julho de 2007, o relatório traz documentos comprometedores para o ministro Walfrido: um deles tem o carimbo “Confidencial”, com a chancela lustrosa da Receita Federal. Datado de 15 de maio de 2006, o extrato da Receita indica que Walfrido teria feito movimentações financeiras “até 20 vezes maiores do que as declaradas ao Fisco”. Exemplo: em 2002 Walfrido declara que sua empresa teve a receita de R$ 1,1 milhão. Mas a movimentação dela, segundo o documento, teria sido R$ 22,2 milhões. No ano fiscal de 2004 a receita declarada da Samos era de R$ 648 mil. Mas as movimentações financeiras, ainda de acordo com o relatório, passaram de R$ 3,1 milhões. Não fica claro se o volume da movimentação foi a soma de entradas e saídas ou se este foi, ao final do ano, o saldo constante na conta.

Dated July 4, 2007, the report contains documents that compromise the minister, one of them stamped “confidential” and bearing the seal of the federal tax authority. Dated May 15, 2006, the records show Walfrido making financial transactions “up to 20 times greater in value than declared.” Example: in 2002, he declared his firm had revenues of R$22.2 million. In 2004, Samos declared revenue of R$648,000. But the amount of money moved, according to the report was more than R$3.1 million. It is not clear whether that figure represents the some of all deposits and withdrawals or the balance of the account at year end.

Seems like it might be somewhat important to clarify that.

O inquérito sobre o caso no Supremo nasceu das investigações do mensalão. Walfrido era coordenador político da campanha de Azeredo. Na época, o pai espiritual do mensalão, publicitário Marcos Valério Fernandes de Souza, montou o que seria a ante-sala do esquema denunciado sob o governo Lula. Azeredo não se reelegeu. Perdeu para Itamar Franco (PMDB).

The Supreme Court inquiry into the matter was born out of investigations into the “big monthly” scandal.

The congressional inquiry into the “big monthly” was shut down by opposition lawmakers when it suddenly came to light that the president of their national party had been running the same identical scheme since at least 1998.

At the time, the spiritual father of the scheme, Fernandes [“Belo Horizonte Baldy”] de Souza, mounted what may have been the precursor to the scheme denounced under the Lula government. Azeredo was not reelected. He lost to Itamar Franco (PMDB).

The former president.

Again, there are credible questions to be answered about which was the main building and which was the outhouse.

Only reporting that (1) focuses on the scheme throughout its entire lifecycle and (2) produces reasonably hard numbers on the volume of dirty money pumped through it at different points in time can resolve those questions.

Calling it a “precursor” without offering that kind of carefully researched and beancounting-based backing is slanted and prejudicial.

De acordo com o relatório, as investigações partiram do depoimento do então candidato a vice de Eduardo Azeredo, Clésio Andrade, ex-sócio de Marcos Valério na empresa SMP&B. Sem meias palavras, Clésio atesta que o ministro Walfrido seria a peça-chave de um “núcleo de poder” do governo Azeredo e, por conseguinte, da campanha à reeleição.

According to the report, the investigations began with a statement by Azeredo’s running mate at the time, Clésio Andrade, a former partner of Baldy’s in SMP&B. In no uncertain terms, Clésio testified that Walfrido was the kingpin of a “power nucleus” in the Azeredo administration and, consquently, in his election campaign.

A Polícia Federal, de fato, encontrou anotações manuscritas com estimativas de gastos da campanha, feitas por Walfrido. Em seu depoimento, o ministro revelou que pertencem a ele os rascunhos mal traçados com valores constantes lado a lado de inúmeras abreviaturas. Perguntado sobre qual o significado das iniciais “JM”, o ministro Walfrido afirmou se tratar da candidata ao Senado Júnia Marise, para quem seriam remetidos R$ 500 mil.

The feds, in fact, found handwritten notes with estimates of campaign spending written by dos Mares. In his statement, the minister admitted that the sloppily written figures with innumerable abbreviations were in his handwriting. Asked what the initials JM meant, dos Mares said they denoted Senate candidate Júnia Marise, who was to get R$500,000.

Na investigação, a PF rastreou a pista. Chegou até R$ 200 mil das empresas de Marcos Valério drenados para os assessores de Júnia Marise. Já a sigla HG, ladeada do numeral 280, disse Mares Guia, era uma referência ao candidato a senador Hélio Garcia. Mas Walfrido meteu os pés pelas mãos, num trecho, e não explicou o significado da sigla “TP”, beneficiada com R$ 1,8 milhão. Para o delegado Zampronha, no entanto, seria a soma direcionada ao PT mineiro, com sigla invertida.

In their investigation, the feds followed up on this clue. It found some R$200,000 funneled through Baldy’s companies to aides of Júnia Marise. The abbreviation HG, written beside the figure 280, said dos Mares Guia, was a reference to Sen. Hélio Garcia. But dos Mares …

Walfrido é apontado como o negociador do contrato da campanha publicitária de Azeredo feita por Duda Mendonça. De acordo com depoimento de Cláudio Mourão, o tesoureiro da campanha, os serviços da empresa de Duda custaram R$ 4,5 milhões: “R$ 700 mil entregue em espécie e o restante pago por fora, conforme acordo estabelecido com Walfrido dos Mares Guia”.

[tktktktk]

Consta do relatório que Marcos Valério entregou ao delegado Zampronha o “Projeto Governador e Senador/98 – Minas Gerais”. Ele vem assinado por Duda Mendonça. Foi devidamente encaminhado ao ministro Walfrido por Zilmar Fernandes, sócia de Duda. Consta do inquérito a cópia de missiva endereçada ao “Prezado doutor Walfrido”, com um orçamento entre R$ 500 e R$ 700 mil.

[tktktktk]

Num outro trecho do relatório, consta empréstimo tomado pela Samos, tendo como avalistas Azeredo e Walfrido, liquidado em 2002 no Banque Nationale de Paris Brasil. Aqui, uma contradição: a conta que liquida o valor tem como titular a própria Samos.

[tktktktk]

O delegado federal pede à Receita que aprofunde a devassa fiscal nas contas e na contabilidade da empresa do ministro nos últimos cinco anos. Por fim, recomenda o bloqueio dos bens de todas as pessoas envolvidas com o “mensalão mineiro”.

[tktktktk]

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