Brazil: “Cisco is Just the Latest in a Long Line of (Sino-Paraguayan) Maracutaias,” Say Tupi Feds

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An enterprising geography teacher reality-tests the litigation-prone Simpsons in Rio episode. Homer’s reading material is a book called “How to Loot Brazil.” The enterprising teacher assigns students to research the question: “Is there anything in Brazil to loot?”

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 will 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 in return. —Vermelho on the Daslu case, August 2005

Maracutaia (PT-Br): “Obscure dealings, illicit maneuvers, especially in politics or management; trafficking, fraud, [obscure and skeevy] wheeling and dealing. Origin uncertain, probably from Tupi-Guarani, as a compound of mara “confusion, disorder” + ku “tongue, faculty of speech” + taya “pepper.” First recorded by Teodoro Sampaio.” –Definition by the Dicionário Houaiss , my creative, draft-quality translation.

PF compara fraude da cisco ao caso Daslu: The Brazilian federal police “compare the Cisco case to the case of Daslu.” The Estado de S. Paulo reports.

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The more I read about the Cisco case in the Brazilian press, the better I think of the Estadão editors and reporters covering the case.

This not really a scandal. This is not a watershed moment, to be rubbed with the sal grosso of the “folklore of the evil multinational” — The Cisco case is another Enron! — and subjected to a thorough grilling, in the local churrasco tradition.

This is merely the latest in a concerted campaign, lasting several years and likely to continue until the Sino-Paraguayan brushfire is under control, to crack down on corruption in the import-export sector.

What the Brazilian feds are saying here stands up well, in fact, to a fairly rigourous reality-testing of the press release.

If Cisco resellers were up to the kinds of things they are accused of, there were not the first, or the only ones. And they had plenty of fair warning.

Reporting this story as “the Cisco scandal” is like referring to the options backdating affair — the W$J broke the story and got the Pulitzer for it — by the name of the latest company to settle with the SEC over the practice.

It is to miss the forest for the trees, as they say. Not unlike the kind of coverage you have seen of the phenomenon of caixa dois here — laundering illegal private donations and embezzled public money into political slush funds. It is a widespread practice of long date, but the press focuses on “poster child” cases and tries to sell you on the notion that it was invented by the current party of government. Which is pretty much an insult to the intelligence of the reading and viewing public, and a bid to make suckers out of us all.

The three Cisco senior executives detained for questioning have been released and gone back to work. One Cisco employee remains in custody, and a “business ecosystem” controlled by the former Cisco Brasil president, MUDE, remains in the spotlight. So far, the corporate parent itself is only charged with “benefiting” from the scheme.

My totally idle bar bet: Cisco near Frisco will probably be characterized in the end as having been negligent, of having failed to adult-supervise South American employees engaged in “innovation governance arbitrage” in order to look good to the home office when bonus time rolled around.

It will get a stern finger wagged in its face about doing so in the future, and will pay its share of the damages to the saloon caused by the riproaring fisticuffs that often characterize tech sector competition down here. (Which can get just just amazingly Hobbesian. “Red in tooth and claw.” Mercenary journos selling their column inches out to the gabbling ratfink artist. Quite something.)

And then I imagine they will. And continue to invest in Brazil. Big tech is needed and welcome here — so long as it remembers that the local sport, under local rules, is the jogo bonito, not the ultimate fighting cage-match to the death.

Let me translate this sidebar and then give you a background briefing on the Daslu case — a thoroughly grotesque affair, that.

Involving lobbying of the state treasurer on its behalf by a senior employee who just happened to be the daughter of the state governor here at the time. This according to sworn testimony by the treasuer to a committee of the state assembly, mind you.

And capped by a astonishing Brook Bros. Riot Squad-style picket-sign protest outside the FIESP building on the Av. Paulista — a spectacle that just made my jaw drop when I watched it on the local boob tube.

São três as principais fraudes investigadas pelo Ministério Público Federal e pela Polícia Federal envolvendo a Cisco Systems. Duas envolvem sonegação de impostos federais e uma tem como alvo a lei de incentivo à instalação de empresas de informática na Bahia.

The federal prosecutor and police are investigating three principal fraud schemes involving Cisco Systems. Two involve evasion of federal taxes and one has to do with the law that creates incentives for IT firms in Bahia.

Os investigadores do caso comparam esse esquema aos que foram descobertos em 2005 envolvendo a loja Daslu, em São Paulo, e em 2002 o fabricante de eletroeletrônicos CCE, em Manaus.

Investigators in the case compared this scheme to those that were uncovered in 2005 at the Daslu luxury boutique, in São Paulo, and in 2002, at the electronics manufacturer CCE, in Manaus.


Daslu House Music CD, export edition, $25

Let’s stop there are review those two cases, shall we?

After coffee.

July 15, 2005, from the Estadão:

O ministro da Justiça, Márcio Thomaz Bastos, defendeu ontem a Operação Narciso, por meio de sua Assessoria de Imprensa. Ele afirmou que o trabalho desenvolvido pela Polícia Federal (PF) é feito de “forma impessoal, republicana, sem proteger ou perseguir qualquer dos investigados, respeitando todos os direitos dos cidadãos”.

Minister of Justice Bastos defended Operation Narcissus [the Daslu raid] through his press office. He stated that the work done by the federal police is done “in an impersonal, democratic manner, without protecting or persecuting any investigation subject, respecting the rights of all citizens.”

The case gave rise to the talking point that the “the federal police are a politicized Gestapo!” The boutique claimed it was the victime of political persecution.

It was charging markups on its goods that made an old-school Brooklyn mafia loan shark look like a freaking Salvation Army bell ringer.

Segundo Thomaz Bastos, os agentes envolvidos na ação de anteontem respeitaram as portarias de 1º de julho, baixadas por ele, que normatizam as operações de busca e apreensão da PF. As portarias definem, entre outras regras, que é proibida a presença de pessoas estranhas ao trabalho, como jornalistas e fotógrafos, e que a intimidade das pessoas investigadas deve ser preservada.

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O ministério reafirmou que a Operação Narciso não foi comandada pela PF, mas pelo Ministério Público Federal (MPF), em conjunto com a Receita Federal. A polícia atuou como suporte do trabalho desenvolvido.

[tktktktk]

A assessoria do ministro informou ainda que essa não é uma medida isolada no combate à sonegação e à corrupção no País. De janeiro de 2003 a 30 de junho deste ano, foram contabilizadas pela Polícia Federal 85 grandes operações com 1.532 pessoas presas.

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Numa manifestação de apoio à Operação Narciso, a Associação dos Juízes Federais do Brasil (Ajufe) atacou ontem a Federação das Indústrias de São Paulo (Fiesp), que, sem citar nomes, saiu em defesa da Daslu e de sua proprietária, Eliana Tranchesi. Por meio de nota oficial, os juízes disseram que a reação da Fiesp é um “resquício do período em que convivíamos com uma distinção entre nobres e servos, estando os nobres acima da lei”.

In a show of support for Operation Narcissus, the Association of Brazilian Federal Judges (AJUFE) attacked the São Paulo Federation of Industries (FIESP), which, without mentioning any names, came out in defense of Daslu and its proprietor, Eliana Tranchesi. In an official statement, the judges said that FIESP’s reaction was “a vestige of a period in which we lived with a distinction between masters and slaves, with the masters being above the law.”

Segundo a Ajufe, a PF age no combate ao crime sempre respeitando os “elementos de probabilidade de existência do crime, como bem destacou o respeitado jurista Dalmo Dallari”. A associação defendeu a operação de busca e apreensão e as prisões feitas pela PF com o argumento de que, nesse tipo de ação, há sempre o risco de eliminação das provas dos supostos crimes. A nota destacou, também, que “a Justiça é para todos e não apenas para os mais aquinhoados da sociedade (…) Não há, nessas operações, nenhuma afronta ao Estado Democrático de Direito, ao contrário, o que existe é o seu reforço, pela comprovação de que ninguém em nosso País está acima da lei”.

According to AJUFE, the feds combat crime while respecting the “elements of probable cause to believe that a crime has been committed, as the respected jurist Dalmo Dallari underscored.” The association defended the search and seizure operation and the arrests, arguing that such cases often present a risk that evidence will be destroyed. The statement also stressed that “Justice is for everyone and not just the [well-heeled] … there is no violation of the democratic rule of law in these operations; on the contrary, they reinforce the rule of law, showing that no one in Brazil is above the law.”

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