Dantas’ Inferno: Holder Drills a Hole in Kroll?

The image “https://i2.wp.com/i113.photobucket.com/albums/n216/cbrayton/exemplary.png” cannot be displayed, because it contains errors.
“Exemplary reporting:” Veja on its relationship with Daniel Dantas, May 24, 2006. Source: Veja.abril.com.br. Click to zoom. See
Veja (Brazil): Behind the Scenes of an “Exemplary” Investigative Report

PF, MJ E DANTAS: KROLL MENTE ?: “Is Kroll lying?”

Paulo Henrique Amorim asks this on his Web site.

For some recent background on what is at issue here:

Amorim has an anonymous reader who writes in and reports on the contents of the Kroll lawsuit against Frank Holder we have been hearing about.

There is such a lawsuit in a federal court in the Southern District of New York.

1:06-cv-04657-RJH Kroll, Inc. et al v. Holder
Richard J. Holwell, presiding
Date filed: 06/16/2006
Date of last filing: 12/18/2007

Holder is represented by the law firm, Ferrell Law, P.A., that currently employs him as head of its investigations subsidiary. Kroll has applied (December 7, 2007) to add Ferrell to the complaint “for tortious interference with contract and aiding and abetting breach of fiduciary duty.”

UPDATE: See

In a nutshell, in lay terms: Kroll objects to Ferrell representing its employee, Holder, because it contests Ferrell’s right to employ him.

Holder was the gentleman whom Veja magazine says it dealt with over the “dossier” purporting to document Swiss bank accounts, stuffed with bribe money, in the name of senior Brazilian officials.

It is a case that reminded me of the Clearstream II case in France, and local Brazilian observers of the 1998 “Caymans dossier” case against the governing Toucans (Cardoso, Serra, and the recently deceased and widely admired Mario Covas, in particular. Libeling the dead: How low can you go?)

Murky, that case, but the names cited in connection with it are said to have ties to Maluf and Collor. Or so says the Folha. Who knows? It does seem reasonable to conclude, in general terms, that the USC-trained lawyer Donald Segretti, Nixon’s dirty “Trickster makes this world,” is alive and well and living in South America.

Amorim’s anonymous reader reports that one of the claims against Holder is that, while employed as a consultant for Kroll, after his employment contract with them expired in January 2005, he signed a separate, “parallel” contract with Dantas and Brasil Telecom.

And that Kroll terminated its consulting contract with Holder after the Veja article appeared, charging that it was not informed of this conflict of interest.

Something roughly like that. And that is basically what the lawsuit in the Southern District of New York lawsuit reflects.

So presumably, Kroll’s position would be that, if Holder did what Veja said he did, Kroll was not paying him to do it.

The federal prosecutor here had proposed not letting Kroll do business here anymore, I remember reading. I am not sure whatever became of that threat, however.

Kroll Latin America lists both Petrobras and Citibank as client success stories on its Web site. It is interesting to read those case studies to get an idea of what Kroll generally (says it) does. It has received the Homeric epithet of “spy agency” in the Brazilian press, but whether it deserves the epithet is another matter.

Insurance investigation is a legitimate practice, when practiced legitimately, after all.

Go rent Double Indemnity.

If Fred MacMurray had gotten away with that plot with Barbara Stanwyck, it would have come out of your pocket, in the form of higher premiums. Edward G. Robinson saved us money and preserved the integrity of the system.

Holder’s story is that he is Robinson, not MacMurray.

So: Kroll may have forgotten to mention to the Folha that he was an outside consultant, managing a Kroll account, even though he was “not employed” there any longer, according to Amorim’s Deep Throat.

However, Holder claims in this suit — I had to pay $0.88 to the PACER system to access this public information — that

Despite entering into the consulting agreement with Holder, Kroll began a campaign of disparagement against Holder in order to damage his ability to compete with Kroll in the future. Andres Antonius, President for Consulting Services, as well as other Kroll executives, have made baseless defamatory remarks in the public media, insinuating that Holder was involved in the improper production of client documents which are prejudicial to the sitting government of Brazil.

Anyway, since the case is on the public record and can be checked, I think I will go ahead and translate this analysis — even not knowing who its author is. Amorim’s Deep Throat reader seems to have some legal training, maybe.

Might be an interested party to some portion of the Byzantine dispute, even. Who knows? What is the justification for maintaining the source’s anonymity, anyway?

The anonymous reader makes some interesting claims that ought to be fact-checkable by reading the public records referred to. But seems to gloss over some important points.

I do not really expect to be able to contribute anything substantial to this saga of gabbling ratfinks and Amazonian cell phone deals, mind you, so do not get all excited, okay?

I just like to try to puzzle things out for myself, as mental exercise.

A Folha diz: “a assessoria de imprensa da Kroll negou qualquer ato irregular por parte da empresa e informou que o outro acusado, o americano Frank Holder, também indiciado pela Polícia Federal sob a acusação de prática do crime de calúnia, não está mais na empresa desde dezembro de 2004. Naquela época, Frank Holder era diretor-geral de Serviços de Consultoria da Kroll, com ascendência sobre os negócios da companhia de investigação em todo o mundo”.

The Folha reported: “Kroll’s press representative denied any irregular actions by the firm and said that the other defendant, the American Frank Holder, who is also accused by the federal police of criminal libel, is no longer working at the firm, since 2004. At the time, Frank Holder was director of Kroll Consulting Services, with responsibility for the company’s investigative services worldwide.”

Our anonymous Sherlock Holmes writes:

A Kroll disse à Folha que move ação contra Holder. Olhando o processo, que é público (mas eu o anexo, para a comodidade do seu leitor), descobrimos que:

Kroll told the Folha it is suing Holder. Looking at the lawsuit, which is on the public record (but I append it for your reader’s convenience), we discover that:

The Folha had simply reported, I think, that Kroll would not comment on the issues in its suit against Holder.

O espião Frank Holder era formalmente contratado pela Kroll até o dia 28 de janeiro de 2005.

The spy [sic] Frank Holder was formally employed by Kroll until January 28, 2005.

“The spy Frank Holder” is a locution similar to the practice of Brazilian crime columns that refer to criminal suspects routinely as marginais. If Holder was just digging through public information by legal means, as he claims, then he was an investigator, just like he says on his resume. If not, then he is a disgrace to his profession and a serious reputational risk to his former employer. This is basically the fact in dispute. Due process and factual discovery are grinding along.

No dia 1º. de fevereiro de 2005 Frank Holder fecha um contrato de consultor com a Kroll, através do qual prestaria serviços para dois clientes da Kroll, falando em nome da Kroll e respondendo à Kroll. Um desses clientes era a Brasil Telecom (nessa data, sob a gestão de Dantas).

On February 1, 2005, Frank Holder signed a consulting contract with Kroll under which he would provide services to two Kroll clients, in the name of Kroll and responsible to Kroll. One of these clients was Brasil Telecom (at that point, managed by Dantas.)

Curiosamente, a saída de Holder da função de diretor da Kroll para se tornar consultor coincide com a demissão de Dantas pelo Citibank (o que se consumou em 9 de março de 2005).

Curiously, Holder’s departure from Kroll coincides with Citibank’s dismissal of Dantas (consummated on March 9, 2005).

Not so curiously, maybe. See below.

No dia 30 de setembro de 2005 Dantas é finalmente afastado do comando da Brasil Telecom pelos fundos de pensão e pelo Citibank.

On September 30, 2005, Dantas was finally removed from command of Brasil Telecom by the pension funds and Citibank?

No dia 17 de maio de 2006, a revista Veja publica a matéria em que acusa o Presidente Lula, Luiz Gushiken, José Dirceu, Márcio Thomaz Bastos, Antônio Palocci, Romeu Tuma e Paulo Lacerda de ter contas no exterior.

On May 15, 2006, Veja publishes the article that accuses the president, Gushiken, Dirceu, Bastos, Palocci, Tuma and the head of the federal police of having offshore accounts.

A própria Veja diz que recebeu o dossiê de Dantas com as contas em setembro de 2005 e que, posteriormente, teve três encontros com Frank Holder, espião contratado para elaborar o dossiê.

Veja itself says it received the dossier from Dantas with the accounts in September 2005 and that, later, it had three meetings with Frank Holder, the spy hired to prepare the dossier.

No dia 19 de maio de 2006, a Kroll entra com uma ação contra Frank Holder, nos EUA, alegando que ele descumpriu seus deveres como consultor.

On May 19, 2006, Kroll sues Frank Holder in the U.S., alleging breach of his consulting contract.

Nessa ação, que corre em Nova York, a Kroll acusa Frank Holder de ter acertado com a Brasil Telecom, no começo de 2005, um contrato paralelo para serviços de investigação.

In this suit, Kroll accuses Holder of signing a parallel contract with Brasil Telecom for investigation services.

A Kroll, também nesta ação, diz que Frank Holder recebeu, em setembro de 2005 (mês em que Dantas foi definitivamente defenestrado do comando da Brasil Telecom) US$ 800 mil pelos serviços de consultoria, sobre os quais ele nunca informou a Kroll, apesar de manter o contrato de consultor.

Kroll, in the same suit, says Holder received US$800,000 in September 2005 (the month Dantas was definitively removed from Brasil Telecom), but never informed Kroll of this, despite having a consulting contract with it.

Did the contract specify no outside clients?

No dia 23 de maio de 2006 a Kroll notificou Frank Holder, formalmente, do fim do acordo de consultoria.

On May 23, 2006, Kroll notified Frank Holder formally that the contract was terminated.

Holder nega as acusações feitas pela Kroll na Justiça dos EUA, sem, contudo, dar maiores explicações.

Holder denies the accusations in the Kroll suit, but does not elaborate.

Ah, but he does elaborate, though.

He gives a general version of why he resigned his post that you Baker St. Irregulars really need to be aware of.

He charges, in his counterclaim:

During his tenure at Kroll, Holder became aware of various practices and circumstances that compromised his integrity and the integrity of Kroll. Holder immediately alerted the heads of Kroll to the conduct in question.

Do tell! What were these practices?

One of Kroll’s subcontractors had taken confidential client information and provided it to parties adverse to Kroll’s client. Kroll’s computer systems had been repeatedly compromised and the work stations of one or more of Kroll’s managers had been used to provide large amounts of confidential client work product to an adversary.

A Kroll subcontractor had leaked confidential work product to an adversary of the client?

What subcontractor?

Cross-reference to the general heading of “outsourcing, risks of” along with the Risco Cisco case.

There is a similar claim in Dantas’ defense: That Citibank employees, who viewed Kroll investigations on Telecom Italia, tipped Telecom Italia to their contents.

See

Are we talking about the same alleged leak of the week here?

Despite Kroll’s improper disclosures of its client’s confidential information, and despite requests by Kroll’s injured client, Kroll refused to take action against the adverse party to seek return of the confidential information that was disclosed as a result of Kroll’s improper conduct.

Holder says he resigned over this matter:

Holder felt compelled to leave Kroll based on its breaches of client confidentiality and Kroll’s refusal to acknowledge and undertake to correct these improprieties. Accordingly, on or about December 20, 2004, Holder submitted his letter of resignation which was to be effective January 7, 2005. As per their agreement, Holder continued as an employee of Kroll up until January 31, 2005.

Hence the date Kroll reported to the Folha, I guess: It was the date of his resignation letter, although his actual termination date was later.

Holder also claims here that Kroll owes him $800,000 in back compensation.

He says he agreed to consult for Kroll when they assured him the problems he was complaining about with respect to the client in question would not recur.

Back to our anonymous Sherlock Holmes:

Há uma estranha coincidência de datas entre o afastamento de Holder dos quadros formais da Kroll e a demissão de Dantas do controle da Brasil Telecom.

There is a strange coincidence of dates between Holder’s leaving the ranks of Kroll employees and Dantas’ dismissal from Brasil Telecom.

Cue spooky theremin music.

If Dantas was the aggrieved client whom Holder thought Kroll had treated improperly, it would not be so strange at all. That seems very likely, even. A bit of phony melodramatic build-up here.

Back to our anonymous correspondent:

Ainda assim, ao longo de 2005, a Kroll continuou prestando serviços à Brasil Telecom e Holder continuou responsável por este contrato. Até setembro de 2005, a Brasil Telecom estava sob o comando de Dantas.

Even so, Kroll continued to provide services to Brasil Telecom, and Holder continued to manage the contract. Up until September 2005, Brasil Telecom was under Dantas’ command.

Who acted on behalf of the shareholders, which included the pension funds, the Citi private equity fund that Dantas represented, and TI.

Who wanted him out because they accused him and his crew of self-dealing in breach of [the rough Brazilian equivalent of; IANAFL] their fiduciary duty.

Veja diz que recebeu o dossiê com as contas em setembro de 2005.

Veja says it received the dossier on the Swiss bank accounts in September 2005.

Veja se encontra três vezes com Holder depois disso.

Veja met three more times with Holder after this.

“At least” three more times, is how I think they put it. Veja has a hard time counting higher than 3, apparently. What, is it missing a finger, like Django Reinhardt?

Veja só publica o dossiê em maio de 2006.

Veja only publishes the dossier in May 2006.

Imediatamente, a Kroll rompe o relacionamento com Holder e entra com uma ação.

Immediately, Kroll breaks off relations with Holder and files suit.

A Kroll diz que Holder recebeu R$ 800 mil da Brasil Telecom (ou seja, de Dantas) em setembro de 2005.

Kroll says Holder got R$800,000 [sic; it was stated at US$800,000 above] from Brasil Telecom (that is, from Dantas) in September 2005.

That is, from a parallel contract with BrT-Dantas.

What proof do they have, I wonder?

Isso é o que está no processo. Agora, analisemos:

That is what it is in the lawsuit. Let’s analyze this:

And here we enter into the speculative part of the exercise.

I will continue later. Neuza is calling me to come eat.

I don’t know if all that’s true
But baby, you got me and I got you

Okay, the speculative theory of Amorim’s Deep Throat.

De duas, uma: ou a Kroll fala a verdade na ação e Frank Holder foi contratado diretamente pela Brasil Telecom (Dantas), ou a Kroll ajudou a criar um dossiê com as contas de Lula, Gushiken, Paulo Lacerda entre outros.

[It’s either one or the other, and they amount to the same thing]: Either Kroll is telling the truth in its lawsuit and Frank Holder was hired directly by Brasil Telecom, or else Kroll helped to create a dossier “documenting” accounts supposedly held by Lula, Gushiken, Paulo Lacerda and others.

Diogo Mainardi, em seu livro “Lula é Minha Anta”, diz na página 34 que as contas que constam no dossiê foram criadas no Delta Bank. Mainardi diz no livro que os emissários de Dantas comentaram sobre o dossiê com ele. Mainardi entrevistou Dantas e publicou a entrevista no dia em que saiu a denúncia de Veja (URL). A Veja pintou de preto o nome do banco (URL). Banco este com os quais a Polícia Federal não conseguiu confirmar se as contas existiam ou não, segundo a Folha de hoje.

Diogo Mainardi, in his book “Lula is my [proverbially stupid tapirus terrestris and Bugs Bunny to Mainardi’s Elmer Fudd],” says on page 34 that Dantas emissaries commented on the dossier to him. Mainardi interviewed Dantas and published the interview on the day the dossier charges came out in Veja. Veja blacked out the name of the bank. The bank at which the police federal could not confirm the existence of the accounts as charged in the dossier, according to the Folha today.

On Mainardi’s book, see


O Delta Bank, para quem não se lembra, era o banco que o ex-senador Luiz Estevão usava para mandar dinheiro para o Opportunity Fund, como ele mesmo admitiu em entrevista em julho de 2002 ao UOL News, na época ancorado por Paulo Henrique Amorim (URL). A CVM ignorou este caso, mas mesmo assim condenou o Opportunity Fund. O Conselho de Recursos do Sistema Financeiro Nacional (“Conselhinho”) ignorou a CVM e absolveu o Opportunity, sem sequer pedir contraprovas das “perícias” apresentadas por Dantas. A CVM também preferiu não se defender.

Delta Bank, if you do not remember, was the bank that former senator Luiz Estevão used to send money to the Opportunity Fund, as he admitted to UOL News, anchored by Paulo Henrique Amorim, in 2002. The [Brazilizan SEC-equivalent, the CVM] ignored the case, but even so condemned the Opportunity Fund.

See

The National Financial Systems Commission ignored the CVM and absolved Opportunity, without ever requesting counterevidence on the “reports” presented by Dantas. The CVM also preferred not to defend itself.

I have never even heard of this CRSFN. Who are they? (A body inside the central bank, I am gathering.)

O Delta Bank também era escala obrigatória de milhares de remessas que saíram do Banestado, conforme a CPI do Banestado tentou esconder. Muitas vezes os recursos do Delta Bank iam parar no Opportunity Fund, como mostra o famoso “CD do MTB Bank”, que a CPI do Banestado também fez questão de não analisar (URL). Ou seja, Delta Bank e Opportunity têm conhecida relação de origem/destino.

Delta Bank was also a regular stop on the road taken by thousands of transactions coming out of Banestado, as the CPI of Banestado tried to conceal. Often, funds from Delta Bank would wind up in the Opportunity Fund, as demonstrated by the famous “MTB Bank CD” that the CPI of Banestado made a point of not analyzing. That is to say, Delta Bank and Opportunity had a known relationship as [sender and receiver.]

A Suprema Corte de Cayman, em decisão ratificada pelo Privy Council de Londres, condenou Dantas em um processo em que ele aparece fraudando a criação de documentos bancários, incluindo fichas de abertura de contas.

The Supreme Court of the Cayman Islands, in a decision ratified by the Privy Council of London, ruled against Dantas in a lawsuit in which he was found to have forged bank documents, including records of account-openings.

Tem muita peça fora do lugar. Mas juntando as pontas, dá para imaginar quem criou as contas no Delta Bank.

There are a lot of pieces [to this jigsaw puzzle] missing. But connecting the dots, one can imagine who might have created the Delta Bank accounts.

Well, okay, sure. You can imagine a lot of things.

Speculating on the case is an awful lot of fun if you are not personally involved in it.

But it is still an exercise in buzz.

Nevertheless, I have been meaning to slog through that Banestado report (it’s huge) when I get a chance. See

It is true that Dantas and Brasil Telecom were the largest depositors in the account controlled by the ad executive Marcos “Belo Horizonte Baldy” Valério, an audit of which led to the filing of over 700 criminal charges against Baldy and his associates.

But most of that is way over my head.

What I am interested in here is the journalistic malpractice angle.

The question I keep coming back to, as a regular consumer of the Brazilian news media, is

What the hell is wrong with these people? What, are they on drugs or something?

Dantas said that his adversaries hired a PR agency called FSB to run a media-driven ratfink in order to undermine his credibility and damage his business interests. See

I wonder if he will produce a clippings file at some point to substantiate that point?

That would save us all a lot of work.

Holder also says his boss at Kroll engaged in a media-driven ratfink in order to disparage him, undermine his credibility and damage his future business prospects.

His theory is that Kroll was afraid he would walk away with Kroll clients when he left.

A pretty standard business risk; you read about it all the time in the banking world: Bongo Corp. jumps to Bingo Bank when its relationship manager at Banco de Bango, S.A.  gets headhunted by those bastards at Bingo.

(Holder has a new job, by the way, according to an announcement in (the excellent) Crain’s New York Business. He heads Ferrell Investigations & Security as of May 2006. Did any Kroll clients jump ship?)

Holder says he quit Kroll because it betrayed the confidence of a client to its adversaries.

He says he agreed to continue to manage accounts for Kroll, including Brasil Telecom, as a consultant, when it promised not to do it again.

Whatever “it” was.

So, yeah, it seems likely that the falling out between Holder and Kroll had to do with the outing of the Kroll investigation designed to help head off a feared hostile takeover by Telecom Italia.

Kroll lists Citibank as one of its client success stories (in an unrelated matter having to do, apparently, with that whole Argentine bond thing that Italian pensioners were so angry about. Or something to do with that confusing Land of Fire there on the other side of the Triple Frontier.)

So basically, I guess you could say that Kroll and its former employee are arguing about who is responsible for an apparent institutional conflict of interest of mind-bending proportions from which this dossier gambit apparently emerged.

So I tend to think the interesting thing to do would be to try to assemble a florilegium of the news coverage supposedly embodying these ratfinks.

In this case: what did Andres Antonius say to the press about Holder? What did he say, to whom, and who printed what?

That seems like a doable task for the idly curious amateur.

Hell of a lot more doable than slogging through the CPI of Banestado, that’s for sure! That would involve real work, and the risk of losing one’s marbles entirely.

You could start with one of those business news archives offered by your local public library.

If you are lucky enough to live in a place with a kick-ass public library, like Brooklyn.

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