“Brazil Will Lead Multilateral Money-Laundering Body”

Click to zoom. The Grupo Abril’s Veja magazine covers the iPhone, January 2007: “It’s like magic!” In June 2007, Steve Jobs calls the iPhone “a magical product.” Photocredit: Fotoagência NMM(-TV)SNB(B)CNN(P)BS-Tabajara. That is to say, I snapped it at the local padaria myself.

The Golden Mountain does not exist –Meinong’s paradox of the existential quantifier

Bribery of the news media in too many countries robs citizens of credible information they need to make personal and collective decisions. International Index of Bribery for News Coverage (2003)

The Brazilian Conselho de Controle de Atividades Financeiras (COAF) announces: BRASIL ASSUME PRESIDÊNCIA DO GAFI/FATF EM 2008.

That is, Brazil will assume the presidency of FATF-GAFI, the Financial Action Task Force, for the 2008-2009 term.

It had chaired the South American regional anti-money laundering body, GAFISUD, in 2006.

Senior federal officials, including the head of the federal police, the Minister of Justice and the Minister of the Treasury, were accused publicly in May 2006 of controlling offshore bank accounts stuffed full of bribe dollars and euros related to turning an alleged blind eye to corrupt dealings by Parmalat.

A Brazilian banker has accused those same officials, and senior members of the judiciary, of being bribed to favor his competitors, and turn his business partners against him — and of leaking disinformation to the media in a bid to discredit him.

The risk management consultant who reportedly authored the “bribe dossier” — reported by Veja — is using the same theory to defend against a breach of contract suit by his employer, Kroll.


Which raises the question: Has FATF appointed the fox to guard the henhouse in the area of international financial crimes enforcement and cooperation?


I was just reading an OECD report on Brazil’s progress toward compliance with obligation it assumed to comply with the OECD convention bribery by foreign corporations in international business transactions, issued on December 7 (PDF).

Brazil’s CGU — something like our GAO, but attached to the executive-branch Treasury ministry and separate from the judicial-branch Tribunal de Contas system — was boasting recently that the OECD gave it reasonably high marks for its efforts to comply with that convention.

One conclusion I found interesting was that private- and “third-sector” efforts at addressing were not found not to be focused on international business transactions at all.

In addition to its website, the CGU reported in the Phase 2 Responses that it had been liaising with the Ethos Institute – Institute of Companies and Social Responsibility 18 to support a “Clean Company” campaign and a Corporate Pact for Integrity against Corruption, as well as with the nongovernmental organisation, Transparencia Brasil, to develop a methodology to map corruption risk. Discussions with participants from these organisations during the on-site visit indicated that these initiatives were targeted at issues of domestic bribery in Brazil.

Anti-corruption NGOs funded by multinational corporations and their philanthropic foundations — in the case of those that reveal their funding sources — do not (fail to) focus on foreign bribery.

Imagine that.

Mainardi on the Jô Xô.
Veja magazine joins the fight against bribery in international financial transactions. The international financial transactions it reports on turn out to be as fictional as Bart Simpson.

Roberto Civita’s principal talking point — that private-sector corruption does not exist in Brazil to any significant extent — continues to rule the policy agenda.

See also

Civita told the Knowledge@Wharton interviewer:

I can’t speak to what goes on in other emerging economies, whether it’s Russia, Índia, or China and so on. What I can say is that in Brazil, the media has dedicated itself above all to exposing corruption in the government. And it’s not just federal corruption, either. Nor is it exclusive to the executive branch. We have been very busy lately shedding light on the corruption that has taken hold of the Executive, the Legislature and, not rarely, the Judiciary as well, at the federal, state and municipal level. It’s a general problem, and is not limited to the federal government. These scandals, revealed by the press and the federal police — the local equivalent of the FBI — generally do have repercussions in the business sector. But it is not primarily a matter of business corruption; it’s mainly a matter of corrupt public-private relationships. As far as I can recall, we have never had any exclusively corporate scandals.

A board member of the Instituto Ethos — an opposition federal lawmaker — had to resign last year, during the election campaign, to face corruption charges. What ever happened to that case?

The Civita empire’s first foray into awakening moral panic over foreign bribery in international business transactions turns out to be a quacking fraud.


And what is more, not even an original quacking fraud, but a quacking fraud plagiarized from somebody else’s quacking fraud:

Alert Kremlinologists might have noted the discussion, in this OECD report by the on-site inspection team, of a series of actions against corruption of government officials by representatives of multinationals that were in the works, and so could not be discussed.

This was before the Cisco affair hit the headlines — and other cases like it, the common element being bribery of tax and customs officials, did not. See also

There has been few awareness raising activities targeted at the private sector. Among government agencies, the CGU has been the most active in disseminating information on the foreign bribery offence, through its website and distribution of its leaflet and booklet. As mentioned above, the website developed by the CGU is also addressed to private sector stakeholders concerned by the entry into force of the law criminalising foreign bribery. On these pages, the CGU recommends to Brazilian companies that they (i) adhere to codes of best corporate practices; (ii) promote the development of internal company controls; (iii) offer training on issues related to corruption; (iv) develop integrity programmes and codes of conduct for employees; and (v) ensure that all employees, as well as representatives, agents or other companies active on their behalf do not engage in foreign bribery. Recommendations are also formulated for accountants and lawyers, notably regarding bookkeeping obligations of companies, sanctioning of false accounting offences, auditor independence, and, more generally, awareness raising and dissemination of information on the foreign bribery offence.

The Editora Abril recently adopted an integrity program and formal code of conduct of its own, with great fanfare and not taking any but softball questions about the measure — including a (ridiculously weak) measure against jabá or jabaculê (payola).

I say “ridiculously weak” because it reportedly limits gifts to Abril employees to accepting R$100 per gift per giver.

Per what: Week? Day? Hour?

Four such gifts represent a statutory minimum monthly salary, with change left over to tip the parking valet when he retrieves your armored black Santana with the smoked bulletproof glass.

Reuters, which has rather weak conflict-of-interest governance, I think, states in its code of conduct:

The Reuters Code of Conduct reminds journalists that they must not accept any payment, gift, service or benefit (whether in cash or in kind) offered by a news source or contact.

Any. As in none. Not any. If forced to accept by circumstances, the gift must be donated to charity.

So I think it is interesting to speculate whether this development over at the Soviet-style poured-concrete bunker on the banks of the (unbelievably foul-smelling) Pinheiros River also counts as a measurable sign of progress toward compliance with the international anti-bribery convention.

Does Abril have, historically, a jabaculê problem, or is it implementing a corporate code of conduct in order to combat the phantom menace that Mr. Civita continues to minimize?

On jabaculê, see also


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