Lost In Translation: The Future of the Raw Materials Negotiating Committee

“G. Edward Griffin exposes the most blatant scam of all history. It’s all here: the cause of wars, boom-bust cycles, inflation, depression, prosperity. It’s just exactly what every American needs to know about the power of the central bank.”

Plano prevê fortalecimento da SEC nos EUA: The Paulson plan “will strengthen the U.S. Securities and Exchange Commission,” reports Exame magazine (Editora Abril), passing along a wire-service report from the Agência Estado (Brazil), which cribs its coverage in turn from the Dow Jones Newswires.

Which is an odd analysis. Something may have gotten lost in translation here.

I have not been following the matter closely, but the prevailing wisdom seems to be that the Federal Reserve will centralize regulatory authority under this plan, relegating the SEC to the regulatory backwaters.

Embittered SEC watchers having been heard to complain that the agency sent up by the Exchange Act of 1933 to prevent catastrophic market meltdowns after the Crash of 1929 has a long and undistinguished history of egregiously failing to do precisely that.

O plano do Tesouro dos Estados Unidos para reformar o sistema regulatório financeiro dos EUA prevê a fusão do órgão regulador do mercado de capitais (Securities and Exchange Commission, SEC) com a Comissão de Negociação Futura de Commodities (matérias-primas), trazendo as obrigações de supervisão das ações e dos mercados futuros para um único guarda-chuva, revelou o secretário do Tesouro dos EUA, Henry Paulson.

The plan submitted by the U.S. Treasury Dept. for reforming the financial regulatory system provides for a merger of the SEC with the [CFTC], bringing securities and futures under a single umbrella, Paulson revealed.

There is, of course, no U.S. regulatory agency called the Comissão de Negociação Futura de Commodities (the “commision on the future trading of raw materials,” as the Estadão would have us understand.)

If a Brazilian reader wanted to look the agency up after reading this story, there would not be able to.

The standard solution for this sort of situation might be to refer to it as

… a Commodities Futures Trading Commission (Comissão de negociação futura de commodities, ou CFTC, pela sigla em inglês)

Imagine if I were to write about the Brazilian presidency as the “High Plains Palace” because it is often referred to as the Palacio do Planalto. Or if you were to decide that my name is not Colin, but, what? Zé Bu?

The AFP wire story on the development follows this common-sense principle:

Entre as outras medidas anunciadas, encontram-se a criação de uma agência de vigilância de empréstimos imobiliários e a fusão da Securities and Exchange Commission (SEC), autoridade regulamentadora dos mercados financeiros norte-americanos, com a Comodity [sic] Futures Trading Commission, autoridade de regulação dos mercados de matérias-primas.

Also peculiar, to my ear, is the information that the word “commodities” means the same thing as matérias-primas (raw materials.) The usual dictionary translation is

mercadoria

The Brazilian commodities exchange is known, for that reason as the Bolsa de Mercadorias e Futuros (“the commodities and futures exchange.”) By extension, the CFTC would be, what, the Commissão [Sobre a Negociação] de Mercadorias e Futuros?

No discurso preparado para divulgação do programa de reformas regulatórias do Tesouro, Paulson disse que tal fusão iria eliminar o caráter federal das poupanças, desdobrando a Agência de Supervisão de Instituições de Poupança ao órgão regulador bancário nacional, a Autoridade Controladora da Moeda.

In a speech announcing the Treasury’s regulatory reforms, Paulson said this merger would eliminate the federal character of savings accounts, adding the function of the [FDIC] to the national banking regulator, the [Office of the Comptroller of the Currency].

Brazil: “The CFIUS Is a Product of Gringo Insanity!”

Brazilian imports of audiovisual programming, 2004-2007. This may explain why such an impressive portion of Brazilian TV is just bad American TV, badly dubbed.

If Brazil had similar legislation, many of the privatizations that took place during the Cardoso administration … would never have come off, including those in the telecommunications and mining sectors. Likewise, certain government procurement deals would never had been carried out, such as control over the Amazonian airspace and equipment acquired by the air force, for example. It is true, however, that FINSA is a radical measure, inspired by the same insane ideology that has led the U.S. down the road to ruin and crimes against humanity.

Ouch.

The bill was sponsored by my old congressional representative (back when we lived in Fort Greene, which for some weird reason was in the same congressional district as a strip of the Upper East Side of Manhattan. This before we moved to Prospect Heights, Brooklyn, a political chocolate city presided over for 30 years by Major Owens — our local version of Tip O’Neill, for both good and ill, I suppose.)

The online legal affairs magazine Última Instância (Brazil) casts a jaundiced eye on the Foreign Investment and National Security Act of 2007:

A nova lei de investimentos estrangeiros e de segurança nacional dos EUA

“The new U.S. law on foreign investment and national security.”

São Paulo – A Finsa (Lei de Investimentos Estrangeiros e de Segurança Nacional) dos EUA (Estados Unidos da América) entrou em vigor em outubro de 2007 e será regulamentada no próximo mês de abril de 2008. A nova lei dá poderes à administração federal dos EUA para proibir ou suspender qualquer fusão ou aquisição de uma companhia estadunidense que possa ameaçar ou, de qualquer maneira, prejudicar a segurança nacional do país.

Finsa went into effect in October 2007 and will be regulated in April 2008. It gives the federal administration the power to bar or suspend any M&A transaction by a U.S. company that might pose a threat to or in some way harm the national security of the United States.

A Finsa cria mecanismos de consulta prévia para negócios no âmbito de fusões e aquisições a ser formulada ao CFIUS (Comitê de Investimentos Estrangeiros nos Estados Unidos), mas também dota este órgão administrativo de poderes para revisão ex post facto , posterior à concretização das respectivas operações, podendo vetá-las, remetendo-as à situação anterior, status quo ante.

Finsa creates procedures for prior analysis of M&A deals by the CFIUS, but also gives this body powers of ex post facto review of done deals, with the ability to veto those deals and return them to the status quo ante.

O principal objetivo da Finsa é o de impedir qualquer entidade controlada direta ou indiretamente por um governo estrangeiro de adquirir obras ou operações de infra-estrutura crítica no país, como telecomunicações, portos, aeroportos, produção de energia e transporte, dentre outros. De fato, bens de “infra-estrutura crítica” são definidos como “sistemas ou ativos, quer físicos ou virtuais, tão vitais para os EUA que a incapacidade ou destruição de tais sistemas ou ativos teriam um impacto debilitante sobre a segurança nacional” (sic).

The principal objective of Finsa is to prevent any organization controlled directly or indirectly by a foreign government from operating or acquiring critical infrastructure such as telecoms, ports, airports, energy production and transportation, among others.

I say we should apply this rationale to the FOX Network and Murdoch’s acquisition of the Wall Street Journal.

Nassif: Veja’s Deep Throats

Veja’s Mainardi on Globo’s late-night Jô Xô repeats the unsubstantiated rumor that senior government officials have bribe-stuffed offshore bank accounts — defending the exercise in logic-chopping gibberish with a gibbering tautology.

Brazilian political and economic commentators perform their analyses before the fact. Before they know that it actually happened, they have an explanation for it. They present opinion divorced from information. –Ricardo Kaufmann (O Globo: “Chávez Won the Referendum Because He Manipulated the System!”)

A “senior adviser to Bush,” Suskind reports, says to him that “guys like me were ‘in what we call the reality-based community,’ which he defined as people who ‘believe that solutions emerge from your judicious study of discernible reality.’ I nodded and murmured something about enlightenment principles and empiricism. He cut me off. ‘That’s not the way the world really works anymore,’ he continued. ‘We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality — judiciously, as you will — we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors . . . and you, all of you, will be left to just study what we do.’

Rumor is both a process of information dissemination and a process of interpretation and commentary. Shibutani conceives of rumor as a collective activity that tries to make sense of unexplained events, but insists that it depends on two necessary conditions: The importance of the information and its ambiguity. —“Rumors: Voices That Insinuate”

O araponga e o repórter: “The Spy and the Reporter.”

Brazilian business journalist Luis Nassif publishes another installment in his series on the type of “journalism” practiced by Veja magazine (Editora Abril).

My wife and I laughed last week to see the leader of the opposition in the lower house of Congress, deputy Vergilio of Amapá, repeatedly telling the TV cameras that Veja is a “serious and responsible” news publication.

It demonstrably is not. Quite the contrary But as Nassif has pointed out in a number of cases, the ethos argument is an integral part of its “toxic sludge is good for you” marketing strategy.

If you tend to report a lot of nonexistent facts and otherwise perpetrate acts of heinous journalistic incompetence or bad faith, it does not matter. You just keep repeating, “We are excellent journalists,” and get your cronies to repeat it as well. Ad nauseam.

Nassif has made some perceptive comments on the magazine as an importer of what he calls “the neocon style.”

I hope that when he polishes up this series into a book that he will include a chapter that traces the history and characteristics of that “neocon style.”

The infamous remarks of an anonymous White House staffer to Ron Suskind of the New York Times Magazine (above) are perhaps the most succinct state of principles of this contempt for critical collaborative knowledge-seeking, according to which, despite what Sen. Moynihan famously said, one is entitled to one’s own facts, or even to form opinions in the absence of facts.

At any rate, I continue to translate pra inglês ver as I find time. This episode highlights a crucial difference between Brazilian Deep Throats and the Deep Throat source used by Woodstein in Watergate.

Woodstein checked out what their Deep Throat was telling them. The usual procedure: If you cannot corroborate, you cannot vouch for it, and if you cannot vouch for it, you cannot print it in the paper.

Brazilian Deep Throats, on the other hand, are given full editorial control. No fact-checking involved. Fax it in and we will run it. Hillary Clinton performed oral sex with Fidel Castro? Really? Well, okay, if you say so …

A matéria foi bombástica e ajudou a deflagrar a crise do “mensalão”. Uma reportagem de 18 de maio de 2005, de Policarpo Jr., da sucursal da Veja em Brasília, mostrava o flagrante de um funcionários dos Correios – Mauricio Maurinho – recebendo R$ 3 mil de propina (clique aqui)

It was a bombshell of an article and helped unleash the “big monthly allowance” scandal. A report published May 18, 2005 by Policarpo Jr. of the Brasília bureau of Veja showed how Maurinho, an employee of the federal postal service, was caught in the act taking a R$3,000 bribe [URL].

A abertura seguia o estilo didático-indagativo da revista:

The lead graf was typical of the magazine’s [pedantic and moralizing] style:

(…) Por quê? Por que os políticos fazem tanta questão de ter cargos no governo? Para uns, o cargo é uma forma de ganhar visibilidade diante do eleitor e, assim, facilitar o caminho para as urnas. Para outros, é um instrumento eficaz para tirar do papel uma idéia, um projeto, uma determinada política pública. Esses são os políticos bem-intencionados. Há, porém, uma terceira categoria formada por políticos desonestos que querem cargos apenas para fazer negócios escusos – cobrar comissões, beneficiar amigos, embolsar propinas, fazer caixa dois, enriquecer ilicitamente.

“Why? Why are politicians so eager to get appointed to government posts. For some of them, the post provides them with visibility that helps them with their election campaigns. For others, it is an efficient way of getting an idea, a project, a specific public policy, off the drawing board. These are the well-intentioned politicians. But there is a third category composed of dishonest politicians who seek government appointments merely in order to do dirty deals — charge commissions, benefit their cronies, pocket bribes, launder money into slush funds, get rich quick.”

A revista informava que tinha conseguido dar um flagrante em um desses casos na semana anterior:

The magazine reported that it had managed to catch one of the dishonest politicians in the act the previous week:

“Raro, mesmo, é flagrar um deles em pleno vôo. Foi o que VEJA conseguiu na semana passada.’

‘It is a rare thing, indeed, to catch this sort of bird on the wing. But that is what VEJA managed to do last week.”

Ecce Veja: “Scandal of the Blackmail Dossier!”

The Editora Abril: A media monopoly dedicated to the art of the gabbling ratfink. “The Authoritarian Temptation: The PT’s attempts to monitor and control the press, television and culture.” Translation: “Dilma could decide those zero-down spectrum concessions we got were the fruit of a skeevy plundering of the commonwealth! Bork her with all you’ve got!

Blog do Desemprego Zero notes that Veja magazine (Brazil) had run a story this week charging that the governing party prepared a “dossier” on the previous government in order to “blackmail” a congressional probe that is (not very energetically) looking into the use (and alleged abuse) of corporate credit cards by government employees to pay their per diem allowances.

See

• Brazil: The Great Credit Card Audit Trail Massacre of 2008!

A huge tempest in a teapot has ensued. Veja’s standard shtick is a martyrdom narrative about the Stalinist tyranny of the Lulo-petista supermajority! (Recent polls show 73% approval for the stumpy lawn-gnome with the missing finger who runs the show here.)

A drunk friend of ours — not a voter for the governing party here, either — goes into an inspired rant the other evening over a table full of drained Itaipavas.

The rant concerned how Congress wastes all its time on bullshit parliamentary commissions of inquiry (CPIs) into bullshit “scandals,” based on bullshit — Veja magazine is a something of a perpetual bullshit factory — out of purely bullshit political motives, instead of actually getting things done.

Hard not to sympathize with that point of view.

Our poor friend is so drunk and angry because Brazil’s anachronistic labor laws turned a simple work-related temporary disability into a Kafkaesque nightmare. There are legislative proposals on the table to improve the situation, but — our friend again — no one is debating and voting on them because they are too busy with their bullshit CPIs!

The Veja story is illustrated, I gather, with three printouts from a highly confidential, password-protected executive branch database on spending by government officials. The President’s expenses are not published for security reasons, I understand.

Veja did not reveal the source of the leak. Veja never reveals its sources on anything it prints, it seems like.

Veja did not think it needed to tell us, for example, that it source on the sex scandal involving a certain Sen. Calheiros of Alagoas (what is it about Alagoas, anyway?) was the palimony attorney of the senator’s baby mom — who also negotiated the baby mom’s tasteful, er, spread in Playboy Brasil, Veja’s sister publication …

Rule of thumb: Anonymously sourced stories, where no good reason is given for granting anonymity, have a way of turning out to be, ahem, not so trustworthy. Wake when someone is willing to go on the record.

Just ask the “former Hill aide” who told Judy Miller about the aluminum tubes and Bob Novak about Valerie Plame. He got jail time.

A Veja desta semana faz uma denúncia gravíssima: o Palácio do Planalto está querendo quebrar o monopólio da Veja de preparar dossiê. A Veja pode grampear divulgar dados sigilosos, divulgar grampos, chantagear. Aliás, uma regra de ouro que deve ser aprendida é: quando a denúncia contra os tucanos e “democratas” é dossiê e o que importa é a (i) legalidade e a “(má) intenção da obtenção e da divulgação do dossiê, quando é favorável ao PSDB/PFL, é relevante apenas o conteúdo da denúncia, não é importante nem mesmo se a denúncia verdadeira ou não.

Veja magazine has made a very serious charge: That the federal presidency wants to break up Veja‘s monopoly on ginning up dossiers. Veja can bug people, publish confidential information, publish wiretap transcripts, blackmail. But there is a golden rule that must be learned: When the charges weigh against the [PSDB] and [ex-PFL], what matters is the (il)legality of the dossier and the (evil) intentions behind publishing it. When it is favorable to the PSDB/PFL, what matters is the content of the dossier alone, whether the charge made in the dossier is true or not.

Black Gold, Tupi Tea: Petrobras Announces the Carioca Field

No jokes about the Bacia de Pelotas, please.

And then one day he was shootin’ at some food
When up through the ground came a’bubblin’ crude
Oil, that is. Black gold. Tupi tea.
–“The Ballad of Jed Clampett”

Petrobras descobre outro poço na Bacia de Santos: “Petrobras discovers another hydrocarbon reserve in the Santos Basin.”

Will Paulo Maluf take credit for having the vision to go looking for this one as well?

The, ahem, colorful and reputedly larcenous on a mass scale local politician ran TV ads after the first Santos Basin discovery trying to link the deepwater discoveries to his infamous dictatorship-era (inland) drilling boondoggle, Paulipetro.

My wife laughed until milk shot of her nose when that came on the TV during the mandatory political advertising slot.

A Petrobras encontrou mais um reservatório de petróleo e gás abaixo da camada de sal, em área ultraprofunda, na Bacia de Santos. Foi no bloco BM-S-8, ao sul das reservas gigantes de Tupi, considerada um megacampo de petróleo, com um volume estimado entre 5 bilhões e 8 bilhões de barris.

Petrobras has found another gas and oil reserve below the salt layer in very deep waters in the Santos Basin. It was in Block BM-S-8, south of the giant Tupi reserves, which are considered a megareserve with volume estimated at between 5 billion and 8 billion barrels.

Current Content Downloads: Getting Down To Business

Remember I said I had a client who said they maybe wanted me to work as a local stringer, scouting debt and equity issuance, restructuring, changes of control, buybacks, and all those sorts of signals that companies might be for sale, or looking to go on a shopping spree?

Sure, I said. I am perfectly happy to spend my days scouring CVM disclosures and other official sources of corporate actions, the forward calendar of the competition regulator, the Official Diaries, the local business press (which mostly all cover the same exact stories: Pick a decent one and you have pretty much read them all, with only marginal exceptions). And what have you.

Now, this client thinks it might want me to actively pursue such leads rather than just digging them up. Produce “forward-looking deal intelligence.”

Reality-test market rumors.

Get acquisitive companies to point at their targets. Beard sovereign funds at the luggage carrel at the airport and ask them, “So, what are you going to spend all those yummy petrodollars on?”

Which sounds like a lot of fun, although I warned this client: I am not someone who brings a fat Rolodex to this beat. I would have to spend months handing out business cards to in order to build one.

And besides, the subscription newsletter Relatorio Reservado (Brazil) is already doing a pretty bang-up job of “forward-looking deal intelligence” here, I find. Today, for example, it reports:

Mal desembarcou no Gávea Investimentos, o Harvard Management Company já pensa em reduzir à metade sua parte na empresa de Armínio Fraga, em torno de 12%. A operação está ligada a um reposicionamento internacional do fundo.

Harvard Management Company has scarcely landed at Gavea Investments, the investment management firm of former central bank president Arminio Fraga, and is already thinking of reducing its 12% stake by half. The adjustment is a product of the fund’s international repositioning.

Didn’t I read in the W$J that the vast Harvard endownment — $35 billion, is it? — is now under new management?

Rio: Dancing the Dengue Merengue

Aedes aegypti: metrosexual bloodsucker with a diversified portfolio of disease transmissions.

In Rio, the mortality rate for hemmorhagic dengue is some 20%, while WHO considers a 1% mortality rate acceptable. “It is terrifying. I have never seen such a high mortality rate anywhere, except in the Philippines in the 1950s,” said epidemiologist Boulos of USP.

Dengue is the most important arthropod-borne viral disease of public health significance. Compared to nine reporting countries in the 1950s, today the geographic distribution includes more than 100 countries worldwide. Many of these had not reported dengue for 20 or more years and several have no known history of the disease. The World Health Organization (WHO) estimates that more than 2.5 billion people are at risk of dengue infection. Most will have asymptomatic infections. The disease manifestations range from an influenza-like disease known as dengue fever (DF) to a severe, sometimes fatal disease characterised by haemorrhage and shock, known as dengue hemorrhagic fever/dengue shock syndrome (DHF/DSS), which is on the increase. Dengue fever and dengue haemorrhagic fever/dengue shock syndrome are caused by the four viral serotypes transmitted from viraemic to susceptible humans mainly by bites of Aedes aegypti and Aedes albopictus mosquito species. Recovery from infection by one serotype provides lifelong immunity against that serotype but confers only partial and transient protection against subsequent infection by the other three. First recognised in the 1950s, it has become a leading cause of child mortality in several Asian and South American countries. —Emerging Themes in Epidemiology, 2005, 2:1

CartaCapital magazine (Brazil) has this on the (0ther) public health crisis that has dominated the front pages and nightly newscasts lately here in Brazil: the current dengue outbreak in Rio de Janeiro.

Rio mayor Cesar “The Naked (Chairman)” Maia and his administration suffered some public derision after being quoted as denying, initially, that the incidence of the disease was as serious as health experts were claiming. See also

Viral Political Marketing Notes: “The Naked Mayor Blogs While Rio Burns With Fever”

The governor of the state of Rio, Mr. Cabral, took the opposite tack (this in an election year, after all), issuing an apology for the inadequate preparation and response by state public health authorities.

Ao contrário do que aconteceu com o surto de febre amarela no ano passado, quando o noticiário exagerou os riscos a que a população estava exposta, a epidemia de dengue que atinge o Rio de Janeiro é mais perigosa do que as anteriores. Pela extensão verificada até o momento – desde o início do ano, 41,9 mil pessoas foram infectadas no estado –, mas principalmente devido à alta taxa de mortalidade nos casos registrados. Mais de cem mortes por suspeita de dengue foram notificadas até agora, das quais 54 foram confirmadas pelas autoridades de saúde. A capital fluminense concentra a maior parcela dos casos – contabiliza 31 mortes e mais de 28,2 mil casos, acima do registrado ao longo do ano passado. Para agravar a situação, desta vez a dengue mata em um ritmo cinco vezes maior do que o verificado na última epidemia. Em 2002, o estado registrou 91 mortes para mais de 255 mil infectados. Em algumas localidades, o índice chegou a ser 20 vezes superior ao limite tolerado pela Organização Mundial da Saúde (OMS). A epidemia atual também marca o retorno de uma variedade de vírus ausente na região desde os anos 90.

Unlike the upsurge in yellow fever last year, when the news media exaggerated the risk to the population, the dengue epimedic in Rio is more dangerous than previous ones. More dangerous because of the extent of the outbreak verified to date — 41,900 persons infected since the beginning of the year — but mainly due to the high mortality rate among the cases recorded. More than 100 deaths suspected of being related to dengue have been reported to date, of which 54 have been confirmed by public health authorities.

On the great yellow fever freak-out of 2008, see also

• The Fever Dream of the Yellow Press: What the Factoid Is Wrong With These People?
• “Brazilian Yellow Jack is Back”: Cyclical or Apocalyptic?
• Moral Panic Notes: Further on the Great Yellow Jack Attack of 2008
• Brazilian Yellow Jack Attack: The Naked Mayor Quacks
• Brazilian FAQ: “Yellow Jack Has Not Come Back”

For what is worth, personally, here in Sao Paulo, dengue is a much bigger worry for us personally, and for friends with children (and cachaça-compromised livers).

Once you fight through all the gibbering bullshit in the news media, the fact is that dengue is solidly urbanized now, while yellow fever (for which there is a vaccine) is only of major concern if you are planning on going tromping through the thick jungles.

Covering the Bases: “Spaniards and Mexicans Race to Complete the Triple Play”

Vigilante consumerdom: angry Argentines spank the Spaniards. Source: Iconoclastas.

DCI: Comércio, Indústria & Serviços (São Paulo, Brazil) reports: Spaniards gird their loins against the Mexicans in Brazil as the Tupi consider whether to create a homegrown telecom behemoth with the proposed merger of Oi and Brasil Telecom.

A Net Serviços, controlada pela Telmex, uma das empresas de Carlos Slim, empresário que também tem controle sobre a Claro e a Embratel, avança sobre o market share do mercado de Internet em banda larga em cima das líderes do segmento, como Telefônica, Brasil Telecom (BrT) e Oi, respectivamente. Ao perceber o avanço da concorrente, a Telefônica se prepara para contra-atacar, e especialistas estimam que ela deverá investir cerca de R$ 700 milhões em banda larga (Sppedy [sic]) este ano, valor superior aos R$ 500 milhões aplicados no serviço ano passado, para manter a liderança.

Net Serviços, controlled by Telmex, one of the companies belonging to Carlos Slim, who also controls Claro and Embratel, is gaining market share in broadband Internet at the expense of the market leaders: Telefônica, BrT and Oi, in that order. Noting that its competitor is gaining on it, Telefônica is preparing a counterattack, and analysts estimate it will invest some R$700 million in Speedy broadband this year, an increase over the R$500 million it invested last year, in order to maintain its leadership position.

The deal aspect of the story is a bit over my head, let me make it clear from the start. The strategic rationale for allowing a Brazilian megaoperator to form is said to be a desire to reassert the balance of power in the Treaty of Tordesilhos-Tordesillos.

Telecom is strategic, and they say Brazil would like to have a homegrown multinational in this sector, generating an international market for homegrown Tupi technology and technological know-how. That is how I vaguely understand the issue. I need to study it more.

Meanwhile, here is a local and personal consumer angle: We have Net cable broadband — Telmex shares the venture with Globo, I understand — at home, as part of a “double-play” package. And we are keeping a careful eye on the developing options for “triple play” — boob tube, VoIP telephony and broadband internet. Portability of our current phone number is a major factor in the decision (which is the kind of decision my wife tends to make, by the way.)
We had the Cablevision triple play back in Brooklyn and were very happy with it. Relative to local wage scales, furthermore, it was about four times cheaper. At least.

My wife used to have Speedy aDSL and, like many users we know, tended to cuss the service endlessly and bitterly. It tended to drop her from the network randomly and often.

Telefônica, the “natural” telephone monopoly here in São Paulo, leads the Procon rankings in consumer complaints.

Segundo Julio Püshel, analista sênior do Yankee Group, consultoria voltada a telecomunicações, um dos grandes pontos de a Net ter adquirido musculatura para chamar a atenção da concorrência é ter criado o pacote triple play (3 serviços em 1), que reúne Internet em banda larga, telefone fixo e TV por assinatura. No entanto, Püshel aponta que no final do ano passado, a Telefônica percebeu o potencial do negócio e passou a oferecer um pacote parecido, o Trio, com os mesmos serviços.

Nova Bolsa: Brazilian Bourses Joining Forces

Pregão: Where the grana changes hands.

Gazeta Mercantil (Brazil) puts the story on the wire before we early risers have even had our café da manhã:

SÃO PAULO, 26 de março de 2008 – A Bovespa Holding anunciou hoje a fusão com a Bolsa de Mercadorias e Futuros (BM&F), que resultará na formação de uma entidade provisoriamente denominada de Nova Bolsa. A companhia será uma empresa aberta, registrada na Comissão de Valores Mobiliários, e cujas ações serão negociadas no Novo Mercado.

Bovespa Holding, [which owns and operates the Stock Exchange of São Paulo, Brazil’s principal trading venue] announced today a merger with the BM&F (commodities and futures exchange) that will result in a new entity provisionally known as the Nova Bolsa [ the “new bourse”]. The merged company will be publicly traded, registered with the Brazilian securities regulator and with shares traded on the Novo Mercado.

The NM is a tiered listing segment for shares of companies that voluntary agree to meet corporate governance standards exceeding local legal requirements.

Serão procedidas operações de reorganização societária que resultarão na emissão de ações ordinárias da Nova Bolsa para os acionistas da BM&F e da Bovespa Holding, na proporção de 50% para cada companhia. Adicionalmente, os acionistas da Bovespa Holding receberão pagamento de R$ 1,24 bilhão.

Share restructuring transactions will be carried out whereby shareholders of the two bourses will both receive 50% of the common shares in the Nova Bolsa. Bovespa Holding shareholders will receive an additional R$1.24 billion in cash. 

Electrical Shocker II: “CESP Generation Privatization Falls Through”

AES Eletropaulo distribution grid

Empresas não depositam garantias e leilão da Cesp fracassa: “Bidders don’t post bond and CESP privatization auction falls through.”

SÃO PAULO – As empresas pré-qualificadas para o leilão de privatização da Cesp não depositaram as garantias financeiras dentro do prazo estipulado pela Companhia Brasileira de Liquidação e Custódia (CBLC), que ia até o meio-dia de hoje. Com isso, o leilão, marcado para amanhã na Bovespa a partir de um preço mínimo de R$ 6,6 bilhões, fracassou.

The companies that prequalified for the privatization auction of the State Electrical Co. of São Paulo did not deposit financial sureties by the deadline specified by the CBLC (clearning and settlement bank), which was noon today. With that, the auction, scheduled for tomorrow at the Bovespa with a minimum price of R$6.6 billion, fell through.

Estavam pré-qualificadas as empresas Alcoa, Tractebel, CPFL Energia, Neoenergia e Energias do Brasil. As ações da Cesp têm a maior queda do Ibovespa, despencando 16,73%, para R$ 32,30.

The prequalified bidders were Alcoa, Tractebel, CPFL Energy, Neoenergia and Energias do Brasil. CESP shares were the leading loser on the Ibovespa index, plummeting 16.73% to R$32.30.

Ouch.

So what now?

Brazil: “Businesses Run on the Medici Model Are Better!”

“Surprise! Family businesses are better. More profitable, better share price, growing productivity — no one can beat the financial health of family-controlled enterprises, reveals an exclusive study.” Source: IstoÉ Dinheiro, October 10, 2007.

Empresa familiar tem desempenho superior às companhias de capital aberto: Época Negócios (Editora Globo) reprises a cover story from several months ago in the rival IstoÉ Dinheiro.

“Family businesses outperform public companies!”

Reprises it almost word-for-word, it seems to me, in terms of its basic argument, though with different business cases (personagens, as they say here) to illustrate the thesis.

Different business cases as in: The two cases it discusses are not case studies about Brazilian firms.

Which is peculiar thing to run across.

You buy a Brazilian business magazine hoping to learn more about Brazilian businesses, but you wind up learning about Dutch and Swiss businesses instead.

I still have a lot to learn about this place, but there is one thing I can tell you for sure: This here ain’t freaking Holland. (Holland has better flood control, for one thing.)

Época apparently has a contract with Swiss B-school IMD to provide it with all its analytical articles, as is the case here.

This is striking, when you look at their story lists on the Web site. Straight news is locally gisted from local press releases, basically. News analysis is produced by some blond guy sipping hot chocolate in an Alpine chalet, après ski.

Empresas familiares têm sua própria complexidade: além de lidar com questões relativas ao negócio, têm também de lidar com a questão da propriedade e com questões familiares. Essa complexidade dá a elas uma força tremenda — as famílias têm valores e se preocupam com as futuras gerações e com a sustentabilidade da empresa. A propriedade do negócio é de caráter independente e de longo prazo; além do mais, a empresa pode recorrer a modelos de negócios não convencionais. Por causa disso, as empresas familiares têm, muitas vezes, desempenho superior às companhias de capital aberto.

Family-run businesses have their own complexity: Beside having to deal with business issues, they also have to deal with questions of ownership rights and family issues. This complexity gives them tremendous strength — families have values and worry about future generations and the company’s sustainability.

There was an interesting counterpoint to this thesis this week in the papers here in Brazil:

The story of a family-owned Minas Gerais iron mining company with an 82-year-old patriarch, a humble, simple mineiro who had walked to work at his modest offices every day since the day Getúlio Vargas shot himself.

It received a billion-dollar offer it could not — and did not — refuse. The heirs and scions of the patriarch were reportedly screaming loudly, “Pops, take the money and run!”

More on that in a bit.

Ownership of the business is independent and long-term; what is more, the business can use unconventional business models. For that reason, family business often outperform public companies.

On family businesses with unconvential business models, see also

• TV Globo: An “Insurmountable Anachronism”?

Globo’s affiliate in Bahia, for example, is owned and operated by a squabbling clan of persons all named Magalhães.

As in the current Senator Magalhães Jr. and Congressman Magalhães III.

Keep that unconventional business model in mind as the Jarndyce v. Jarndyce-like dispute over the estate of the “King of Bahia” plays out.

Electrical Shocker: “Light Gives Up On CESP Fight”

Call options on São Paulo’s state electricity generator. Source: Bovespa. Click to zoom.

Light desistiu de leilão da Cesp devido a risco do fim de concessões em 2015, diz executivo: “Light gives up on CESP privatization auction due to risk of concession nonrenewal in 2015, executive says.” Valor (Brazil) reports.

I have not had time to really study this deal — my job at the moment is to study other things — but I can note that CESP’s share price sank 10% yesterday on the eve of the privatization auction on doubts that the state government of São Paulo will get a decent price for its electrical generator.

And the Mrs. reported heavy pamphleting by unions against the privatization on the streets (she is taking classes at USP). They argue that because other state-controlled firms, such as SABESP (the state sanitation company) own most of CESP, the deal requires legislative approval.

Again: I am not well-informed on the deal, and do not quite understand why, assuming I were a Brazilian (which I am not), I should be for or against the deal. The basic idea, I gather, was to liquidate the asset in order to invest in transportation infrastructure without getting the state into debt. Which is not a wholly insane proposition, it seems to me.

And if you complain that state-owned firms are lousy with skeevy political patronage, which is an argument of the opposition — also not without some basis in fact — well, how about getting the state out of the business, then?

RIO – O presidente da distribuidora de energia carioca Light, José Luiz Alquéres, confirmou que a empresa chegou a analisar as condições para participação no leilão da Cesp, marcado para a próxima quarta-feira. O executivo explicou que a companhia não chegou a se qualificar devido ao risco de que a concessão das usinas de Jupiá e Ilha Solteira – que representam 67% da geração da empresa paulista – se encerre em 2015, sem direito a renovação.

The president of Rio energy distributor Light, Mr. Alqúeres, confirmed that his firm has analyzed the conditions for taking part in the CESP auction, scheduled for Wednesday. He explained that Light did not enroll due to the risk that the concessions for Jupiter and Ilha Solteira — which represent 67% of CESP’s generation — will expire in 2015, without the right of renewal.

The Morning Brief: Guido Stripped to Speedo By Credit Remarks

Notable subscription package on offer: 12 months of the Valor Econômico daily + 6 months of the CartaCapital weekly for just R$47 (US$27, or some 10% of a minium salary) a month in parcel payments! I find that offer attractive: I already read both of them religiously. The offer seems to imply that someone thinks there are a lot more people out there like me. In other news, the Gazeta Mercantil signs a content partnership deal with the New York Times. As if the New York Times had anything useful knowledge about the price of sausages, chopp and black-market botijões in Itaim Bibi.

If a rumor comes into your possession, better pass it along to the next guy, and quick: It could be lie. –Millôr Fernandes

The Jornal do Commercio (Rio de Janeiro, Brazil) reports: The federal treasury minister insists that he never said what the press here spent the last few days screaming loudly that he said, or at least implied!

Rumor was that the government was contemplating limiting automobile financing to a period of 36 months.

Guido “Guns and Butter” Mantega says it just ain’t so.

We have heard such sharp exchanges between government and the press before, many times.

The most striking example, perhaps, was the rumor that President Squid would seek a third term, like Uribe and Uncle Hugo. There were and are no credible indications that this was anything but a gibbering fairy tale.

But Veja magazine’s designated blogger, for example, shrieked loudly and hysterically against this sinister but nonexistent factoid-phantasm, summoning patriotic Brazilians to take up arms and join the “counter-coup.”

This was the top story on New World Lusophone Bloomberg today as well, which ran the minister’s remarks in their entirety.

I think the arrival of Bloomberg-style business journalism here is likely to raise the level of the game quite a bit.

Help make the jogo a little more bonito.

O governo quer evitar que o crédito e o consumo cresçam de forma insustentável ao longo dos próximos anos, mas não cogita restringir os prazos dos financiamentos, afirmou o ministro da Fazenda, Guido Mantega. Para garantir que o ritmo atual de crescimento da economia não tenha que ser “abortado”, Mantega disse que serão concedidos estímulos para investimentos a setores-chave, como o automobilístico, aço e cimento. O objetivo é evitar descasamento entre oferta e demanda, que contribua para aceleração da taxa de inflação.

The government wants to avoid having consumer credit grow in an unsustainable manner in the next few years, but is not contemplating restricting the terms of financing contracts, said treasury minister Guido Mantega. To guarantee that the current rate of economic growth is not “aborted,” Mantega said incentives will be conceded to key sectors, such as automobiles, steel and cement. The objective is to avoid a disconnect between supply and demand, which tends to contribute to inflation.

O ministro pretende também reunir-se com representantes dos bancos para obter garantias de que o nível de alavancagem das instituições é seguro. Os financiamentos alongados de veículos preocupam especialmente o governo. Especialistas já alertaram sobre o perigo de bolha nesse tipo de crédito.

The minister also intends to me with representatives of the banking sector to obtain guarantees that the degree of leverage being used is at safe levels. Extended auto financing are of special concern to the government. Experts have already warned of a bubble in this type of credit.

Salvador: From the Files of the Anti-Death Squad Squad

Source: Rede TV News, Bahia.

Correio da Bahia (Salvador, Bahia, Brasil) reports:

Apresentados PMs acusados de matar malabarista

Military police accused of killing circus acrobat are [perp-walked] 

Lotados na 39ª CIPM (Boca do Rio), os policiais são suspeitos de integrar grupo de extermínio

Policemen from the 39th CIPM in Boca do Rio are suspected of being members of a death squad.   

See also

• Salvador: Proactive Debt Collection Comes From the Barrel of a Taxpayer-Funded Gun?
• Salvador: Death-Squad Commission Seated

Reconhecidos por testemunhas como autores do duplo homicídio, que teve como vítimas o artista circense Ricardo Matos dos Santos, 20 anos, e o assaltante Robson de Souza Pinho, conhecido como “Sapo”, 19, fuzilados em janeiro deste ano na Boca do Rio, três policiais militares foram presos ontem pela manhã na 39ª Companhia Independente, onde são lotados. O caso foi noticiado com exclusividade na edição da última terça-feira do Correio da Bahia.Contrariando informação de que o mandante da execução seria um policial da ativa, a delegada Andréa d’Oliveira Cardoso, coordenadora do Grupo Especial de Repressão a Crimes de Extermínio (Gerce), esquiva-se de fornecer detalhes sobre quem teria encomendado o crime e limita-se a dizer que o contratante seria um policial da reserva. Ricardo foi morto por ter sido confundido com um comparsa de “Sapo”, alvo da ação.

Identified by witnesses as the perpetrators of a double homicide that took the lives of circus artist Ricardo Matos dos Santos, 20, and the armed robber Robson “The Toad” de Souza Pinho, 19, who were shot to death in January of this year in Boca do Rio, three policemen from the 39th Independent Military Police Company were arrested yesterday (March 19), a case reported on exclusively by this newspaper last Tuesday. Contradicting reports that the person who ordered the execution was an active-duty policeman, Oliveira Cardoso of GERCE, the [anti-death squad squad of the state judicial police], avoiding providing details, saying only that the person who commissioned the crime may have been a member of the police reserve. Ricardo was killed after being mistaken for a companion of “The Toad,” who was the target of the attack. 

Rio de Janeiro: “The JB Busts a Bingo!”

Bada bingo, bada bicho: Vintage roleta. Source: Musem of the Policia Civil [state judicial police], Rio de Janeiro.

In Campo Grande (Western District), gambling continues full-bore at a location disguised as a concert venue. The owner of the illegal bingo reportedly employes a military police sergeant from Santa Cruz as a security guard. In another location, in Vista Alegre, customers even receive receipts for the purpose of claiming income tax deductions. Other clandestine gambling joints reportedly operate in Penha, Taquara and Del Castilho.

The clipping service of the Brazilian Ministério do Planejamento has this, from the Jornal do Brasil — which seems to be on something of a crusade against the illegal gambling joints of Rio de Janeiro.

Mais um videobingo foi estourado na madrugada de ontem, por volta de 1h, na Rua General Polidoro, número 164, em Botafogo (Zona Sul). Policiais do 2º Batalhão da Polícia Militar fecharam a casa clandestina depois de uma denúncia anônima. Apesar de estar em funcionamento na hora em que a polícia chegou, o responsável pelo estabelecimento não foi identificado. Sete idosos flagrados jogando foram liberados após serem identificados.

Another “videobingo” was shut down last night around 1 a.m. at 164 General Polidoro St. in Botafogo (Southern Zone). Police from the 2nd Military Police Battalion closed the underground gambling house after receiving an anonymous tip. Though it was in full operation when the police arrived, the person in charge of the establishment was not identified. Seven senior citizens caught gambling were released after being identified by police.

Do local, seis máquinas caça-níqueis em funcionamento e três quebradas foram levadas para o depósito da Receita Federal. Na sexta-feira, mais de 400 máquinas de caça-níquel haviam sido apreendidas pela PM no Catete.

Six functioning “nickel-hunter” and three broken ones were taken to a federal tax authority warehouse. On Friday, more than 400 “nickel-hunters” were seized by the state military police in Catete.

The Ecuadoran Border Incident: Smart Bombs And Stone-Age Diplomacy?

SuperTucano: The Piper Cub of death.

Bogotá maintains that its air force used ten conventional bombs in the operation, dropped from Colombian territory by 5 Brazilian-made SuperToucan fighters and three U.S.-made A-37s. … The El Comercio daily of Quito reported than an Ecuadoran air force investigation established that 10 GBU Paveway II 500-lb. bombs, similar to the ones used in Iraq, were used, and “could not have been transported by the planes Colombia has.”

Gazeta Mercantil (Brazil) carries the AFP wire story: Southern Command did help zap the FARC No. 2, who was allegedly negotiating the release of Ingrid Betancourt, only with brains, not brainy bombs.

Your tax dollars at work?

BOGOTA (AFP) – 24/03/2008 – O ataque de 1º de Março da Colômbia a um campo rebelde em território do Equador foi apoiado pela inteligência dos Estados Unidos, mas não foram usadas bombas americanas, contou à AFP um oficial colombiano de alto escalão, confirmando as especulações sobre o assunto.

The March 1 attack on a rebel camp on Ecuadoran soil was supported by U.S. intelligence, but no U.S. bombs were used, a high-ranking Colombian official told AFP, confirming speculations on this issue.

It is really more of a denial than a confirmation.

“Não usamos armas dos Estados Unidos, mas apenas informações que compartilham agora conosco”, disse ele pedindo para não ter o nome divulgado.

“We did not use U.S. weapons, but only the information they now share with us,” the source said, asking that his name not be used.

“Hoje, conseguimos obter dados nítidos de coordenadas (localização), conversas e identificação de redes de apoio”, acrescentou.

“Now, we can get accurate data on coordinates, communications, and the identification of support networks,” he added.

Inside the Fedex of Marching Powder: “The Mules of the Rio Solimões”

Flowing into the biggest muddy of them all: The Solimões meets the Rio Negro, “seen from space.” Source: Wikipedia. Where did Wikipedia get it? Doesn’t seem to feel the need to tell you.

A Tarde (Salvador, Bahia) reports today: “Brazilian feds say drug traffic rules the mighty Amazon.”

A Tarde seems like an awfully decent paper. Goes places, finds stuff out there, and gives it to you straight, no chaser or Rohypnol.

Unlike a lot of crude Brazilian “perp walk” journalism — all the major TV networks practice it sadistically in spades — it does not humiliate or prejudge the criminal suspects, exploiting their image, identity or the pathetic encrenca they find themselves in.

Tabatinga (AM) – Todos os meses, pelo menos 10 pessoas são presas pela Polícia Federal (PF) em Tabatinga (AM) levando pequenas cargas de cocaína pelo Rio Solimões. Com a droga dentro de bagagens, no interior de objetos ou amarradas com fita adesiva junto ao corpo, os “mulas” buscam a sorte no varejo do tráfico, tentando passar a salvo das barreiras policiais ao longo do caminho até Manaus e outras capitais.

Dateline Tabatinga, Amapá: Every month, at least ten persons are arrested by the federal police here carrying small shipments of cocaine along the Solimões river. With the drug hidden in their baggage inside objects or taped to their bodies, the “mules” are trying their luck in the retail drug trade, trying to get past police barriers set up along the roads to Manaus and other regional cities.

Se forem bem sucedidos, podem ganhar de R$ 1,5 mil a R$ 3 mil, dependendo da quantidade levada e do destino final. Mas quando são pegos, seguem para a delegacia da PF, onde são ouvidos, e depois vão para o presídio de Tabatinga, local de moradia pelos próximos três anos ou mais, onde 213 pessoas cumprem pena – 90% por tráfico.

If they succeed, they might make R$1,500 to R$3,000, depending on the quantity and the final destination. But when caught, off they go to the PF, where they are questioned, and then on to the Tabatinga prison for three years or more. There are 213 prisoners there, 90% of them in for trafficking.

Neste sábado (21), dois mulas foram presos pelos policiais federais da Operação Cobra, na Base Anzol, o último e mais temido posto da PF no Solimões, onde todas as embarcações são obrigadas a parar e são revistadas. Uma mulher que havia saído de São Luís (MA) e chegado a Tabatinga de avião levava três quilos de cocaína atadas ao corpo.

On Saturday, March 21, two mules were arrested during Operation Cobra, in Base Anzol, the latest and most feared federal outpost along the Solimôes, where all vessels have to stop and submit to a search. A woman traveling from São Luis in Maranhão who arrived in Tabatinga by air has three kilos of cocaine taped to her body.

Aos 28 anos de idade, bonita e bem vestida, ela poderia não despertar a suspeita dos policiais, mas começou a passar mal, devido ao excesso de aperto da droga junto ao peito, e acabou presa. Na delegacia, disse que era sua primeira viagem e ficou aos prantos, quando deu a notícia por telefone à família.

At 28, pretty and well dressed, she might not have aroused suspicion, but she started to feel unwell because the drugs were squeezing her chest too tightly, and wound up arrested. At the federal precinct, she said this was her first trip and started wailing when she informed her family by phone.

“Se eu pensasse que isso poderia ter acontecido na minha vida, jamais teria entrado nessa. Só entrei pelo dinheiro e porque pensei que seria fácil. Eu precisava terminar a minha casa”, desabafou ela, que é casada e tem uma filha de quatro anos. Pelo serviço, ganharia R$ 3 mil para levar a droga até São Luís.

“If I had thought this could happen in my life, I would never have gotten into it. I only got into it for the money and because I thought it would be easy. I needed to finish building my house,” [blurts] the woman, who is married and has a daughter, 4. She was to get R$3,000 to take the drugs back to the capital city of Maranhão.

I am guessing that is something like a 5% commission on the uncut wholesale price. Maybe less. Just a very rough guess, cannot remember where I saw the numbers on this.

Welcome to the land where risk transfer is an extreme sport.

No mesmo barco, foi pego outro “mula”. Morador de Tabatinga, 21 anos de idade, estudou até a quarta série e trabalhava como mototaxista na cidade. É sua primeira prisão. Levava 1,125 kg de cocaína atado nas pernas e nas coxas. Moreno, estatura média, conta que é descendente de índios kokama e que não tinha nenhum plano específico sobre o que fazer com os R$ 1,5 mil que ganharia para transportar a cocaína até Manaus.

Another mule was captured on the same boat. The Tabatinga resident, 21, attended school through the fourth grade and works at a motorcycle taxi service in the city. It is his first arrest. He was carrying 1.125 kg of cocaine taped to his legs and thighs. Dark, of medium stature, he says he is descended from Kokama Indians and had no specific plans for the R$1,500 he was to earn for transporting the coke to Manaus.

“A situação não estava boa. O trabalho está difícil. Então resolvi fazer esse negócio”, disse ele, na delegacia, enquanto esperava algemado para ser ouvido. “Na hora vale a pena, mas agora vejo que não vale. Estou arrependido, não quero esta vida mais não”, afirmou ele, irmão mais velho de um total de seis.

“It was not a good situation. Work was hard. So I decided to do this deal,” he said at the PF precinct, waiting, handcuffed, to have his statement taken. “It was worth it at the time, but now I see it wasn’t. I am repentant, I don’t want this life any more,” said the man, the oldest of six brothers.

A família mora em uma casa simples, onde só se chega depois de passar por ruas esburacadas e cobertas de lama. Ao saber da prisão, a mãe não demonstrou surpresa. “Já me falaram que tinha uns colegas dele chamando para viajar, para levar bagagem. Ele me perguntou e eu disse não. Mas ele não quer ouvir, prefere o conselho dos amigos. Então é isso o que acontece.”

The family lives in a simple home that can only be reached by traveling along potholed streets covered in mud. Learning of his arrest, the man’s mother did not seem surprised. “They told me he had some buddies of his trying to get him to travel, to carry weight. He asked me and I said no. But he wouldn’t listen, he preferred to listen to his friends. So this is what happens.”

Boys, this may sound like a cliché, but you really probably should listen to your mother.

A mulher contou que recebia o auxílio do Bolsa Família referente a três dos filhos que freqüentam a escola, mas que o benefício foi suspenso, sem nenhuma explicação. Atualmente, sobrevive da venda de curitis (picolés caseiros) de frutas. “Agora, com o filho preso, complica ainda mais para mim.”

The woman said he received the federal Bolsa Familia subsidy for her three school-age children, but that the benefit was suspended without explanation. Currently, she survives selling homemade fruit popsicles. “Now, with my son in jail, this makes things even harder for me.”

The Bolsa program recently expanded to cover kids up to 17, I think.

School attendance is compulsory. The program is often criticized as “populist electioneering,” and news articles often suggest it it rotten with waste, fraud and abuse.

Generally waved around by politicians from states that seem to make the news a lot over cases of “working conditions analogous to slavery.”

And who tend to orate finger-waggingly to the effect that the crackdown on organized criminals who funded their campaigns is a Communist coup d’etat of some sort.

These people are something else. You can argue all you want over the economics of privatization and the “burden the State poses to the market” — and get a sympathetic hearing from me. These questions are thorny. I do not have the answers.

But these people are positively freaking medieval.
The carvoeiros of the region, who do the drudge work of felling the mata and making BBQ charcoal out of it — an eerie site, those beehive-shaped ovens smoking away like little quilombos in the vastness — also cite lack of economic options.

Also an illegal business.

Also being tackled with a fair amount of oomph by the federal police now, especially in Pará. Stay tuned. That situation is already getting interesting.

Ela culpou a falta de trabalho em Tabatinga pelo grande número de jovens envolvidos com as drogas. “Eles não têm emprego. Aí aparece uma ocasião dessas e, quem é meio bobo, vai. Muitas vezes dá certo. Muitas vezes não.”

She blames the lack of work in Tabatinga for the large number of young people involved in drugs. “They have no work. So this comes up and the kind of dumb ones go for it. A lot of times, it works out. A lot of times, it doesn’t.”

E mesmo para os “mulas” que não são presos, o ganho com o tráfico acaba não valendo a pena. O mototaxista que levou nossa reportagem até a casa do garoto contou, com naturalidade, que também já havia feito o transporte de oito quilos de cocaína para Belém (PA), há cerca de quatro anos, mas que praticamente nada sobrou dos R$ 3 mil que ganhou. “Com o dinheiro, eu comprei roupas, um aparelho de som e fiz uma casinha de quatro por cinco, mas como não tinha emprego, vendi e fui morar em outro lugar. O meu dinheiro acabou em nada.”

The same goes for the “mules” that escape arrest. What they earn from trafficking is not worth the trouble in the end. The mototaxi man who took us to the young man’s house told us, frankly, that he himself had transported 8 kg to Belém some four years ago, but that hardly anything was left of the R$3,000 he earned. “With that money, I bought clothes, a stereo, and built a little 4m by 5m house, but since I was out of work, I sold it and went to live elsewhere. My money went nowhere.”

Para o delegado federal em Tabatinga Giovanni Vicente Fontes Lopes, os “mulas” são apenas a parte aparente de um grande esquema criminoso. “O ‘mula’ pode ser classificado como a pessoa que é a ponta do iceberg. Ele se forma dependendo da situação social do país, e na cidade de Tabatinga, especificamente, por falta de opção. Talvez seja necessário que se dê mais atenção a esse tipo de ocorrência que vem acontecendo aqui freqüentemente. É um problema social.”

Tabantinga federal police commander Fontes Lopes says the mules are just the visible part of a big criminal enterprise. “The ‘mule’ is the tip of the iceberg. The ‘mule’ is created by the social situation of Brazil, and here, specifically, by lack of options. It may be necessary to pay more attention to this type of case, which is happening more and more often. It is a social problem.”

Brazil: “Interview With The Bandido”

Nana-nana-nana-nana … Batman! Caption: “City councilmember arrested is accused of using the Batman symbol in areas that pay for ’security’ (Photo: TV Globo archives).” Source: G1/Globo (Brazil).

“This is not a war like everyone in Brazil says. The Third Command, the CV, the ADA, and the Militia, which is made up of cops and ex-cops, are not friends, and certainly don’t hold hands, but there are also not enemies. Each has its own role to play. There  are fallings-out sometimes,and when this happens the result is what everyone knows about: Bullets. Lots of bullets,” “Zinho” explains.

24 Horas News (Mato Grosso) interviews “Zinho.” The context is not clear, but apparently the fellow was arrested in Cuiabá. You read more and more about Rio gangsters buying property and trying to live in discrete comfort in other regions of the country.

O homem que trás as marcas de dezenas de tiros pelo corpo, seis balas ainda estão alojadas, uma delas entre a clavícula, Luciano Fernandes, o “Zinho“, começou a conversa mentindo e falando de cabeça baixa. “Só estudei até a sétima séria“. Mentira. Logo em seguida ele levantou a cabeça e rebateu: “Eu completei o segundo grau“, para justificar a fala bem coordenada.

A man with the marks of dozens of bullet wounds on his body, and six bullets still lodged inside him, one of them in his collarbone, Luciano “Zinho” Fernandes began our conversation by lying and talking with his head down. “I only studied up until the seventh grade.” Lie. He soon lifts his head and responds, “I finished high school,” to explain why he is so well-spoken.

Nice lede graf. Simple, yet vivid. Mato Grosso and other regional journalism is a very interesting phenomenon. You read very little about the “thick jungles” in the major metrosexual news agencies — much as you read very little about Brooklyn (a couple of million voters, after all) in the Grey Lady.

“Zinho” conta que teve que matar uma vítima de assalto como se conta uma história qualquer. “Tive que matar. Eu fui apenas asssaltar o cara. Só que ele reagiu e me atingiu seis vezes. Eu escapei e ele morreu. Não gosto de matar inocente, mas foi o jeito. Era ele ou eu“.

“Zinho” recounts how he had to kill a robbery victim as though it were nothing extraordinary. “I had to kill him. I was just going to rob the guy, but he fought back and hit me six times. I got away and he died. I do not like to kill innocent people, but that was the way it was. It was him or me.”

Brazil: “Electric Company Auction Is Generating Steam Heat”

“Cat-yanker in a judge’s robes”: Editorial cartoon, July 27, 2007, Folha de Acre. “Judges Adair José Longuini and Regina Longuini, to the astonishment of Acrean society, are being accused by the Electrical Company of Acre (Eletroacre) of stealing electrical energy at their mansion in the Tropical neighborhood. … Adair won fame for the case of Chico Mendes, who was killed on December 22, 1988, in Xapuri (Acre), sentencing rancher Darli Alves da Silva and his son, Darci Alves Pereira, to 19 years in prison as the parties who ordered and carried out the assassination of the journalist.”

Leilão da Cesp exibe gargalos na energia: TONI SCIARRETTA of the Folha de S. Paulo offers news analysis of the biggest business story in the pipeline at the moment — the auctioning off of CESP, the Electrical Company of São Paulo.

Headline: “CESP shines light on bottlenecks in energy sector.”

There was an interesting analysis of the deal in CartaCapital this week as well. I will to try to clip some more, time permitting. The unions and the PT political party are dead set against it, and shrieking fairly loudly.

The PSDB governor apparently intends to use the proceeds to get a prime objective accomplished without going into debt to do it: Finishing the freaking Rodoanel (“beltway”) highway project, a notoriously eternally rusting “half-sunk, a shatter’d visage lies” Malufian boondoogle in a city that is drowning in automobiles.

(We were walking down the sidewalk the other day by a gas station. A driver wanting to pull into the gas station faster simply drove up onto the sidewalk rather than waiting for the signal to turn so he could move along the roadway. You heard me: The fucker DROVE UP ONTO THE SIDEWALK, proceeding maybe 25 meters along the dedicated foot traffic lane. It was our job to get the hell out of the way or be cut down in the prime of our life.

This is not an exceptional occurrence. The São Paulo pedestrian is fair game. And the game is Grand Theft Auto.)

I cannot claim to be fully informed on this plan, or the long and convoluted history of the debate over privatizations here, but naively speaking, the plan does not seem to be completely insane on the face of it. If it works.

And the federal government (President Squid) is said to support it.

I mean, you can point to privatizations here that seem to have been structured to maximize rent-seeking behavior by the winners of the auctions (Telefreakingfônica). And then there are those theories that you can and should structure privatizations to actually capture those private-sector efficiencies you hear about in a way that would benefit the public.

I just think it would be nice if those theories were correct and this deal produced the intended benefits. Delfim Netto has been making this general point a lot lately, it seems to me.

Me and my patroa are domestic consumers of electrical energy here, after all. And it can be an insane (KAFKAESQUE ATTEMPTS TO CORRECT GROTESQUE BILLING ERRORS!) and sometimes frightening (EXPLODING ELECTRICAL TRANSFORMERS!) experience

Marcado para a próxima quarta-feira, o leilão de privatização da Cesp, a terceira maior geradora brasileira, reabriu as discussões em torno do modelo de comercialização de energia e de regulação do setor no Brasil, país em que um crescimento robusto pode esbarrar na falta de eletricidade.

Scheduled for Wednesday, the auctioning off of CESP, the third largest electrical generation company in Brazil, has reopened debate about the model for marketing energy and regulating the sector in Brazil, a country whose robust growth could come to grief because of electricity shortages.

Subprime End Times: “Why Brazil Is Not Melting Down (Yet)”

Em terra de cruzeiro, quem tem dólar é rei, o que não é vantagem nenhuma em regime presidencialista. (In the land of the cruzeiro, the man with dollars is king … which in a presidentialist regime does him absolutely no good.) –O Grande Livro dos Pensamentos de Casseta e Planeta (Paraguyan edition, publication date unknown)

Brazil is tending to avoid contagion [from the subprime crisis] because it is still in the “mom and pop shop” phase in terms of its derivatives markets. For the same reason, the relatively rapid expansion of credit in Brazil does not represent any sort of bubble, much less anything remotely like the subprime problem.

Brazilian money speaks Portuguese.

I am continuing to take notes on local business journalists who might make useful reading, applying NMM Maxim No. 1: “Separate the signal from the noise, and ignore the noise.”

This is a more complicated task than it may sound. The Brazilian press is noisier than a squadron of Tupolev-95s flying nap of the earth and sorely in need of engine maintenance. See also

• “From Beef on the Hoof To the Cruzado Crusade”: Reading Up on Tupi Biz Writers

José Paulo Kupfer is an Último Segundo Web columnist on economic affairs.

This column turned up during an idle search for sources of information on securitization and debt issuance and scintillating topics like that.

I have some journalistic bucket work to do in this regard. There is nothing remotely sexy or scandalous about it, but I get a mild kick out of doing it, and someone, after all, has got to cover the waterfront.

Kupfer’s CV:

Nasceu no Rio de Janeiro em 1948. Jornalista desde 1967, foi repórter, redator, secretário de redação, editor-chefe e diretor em diversas publicações do Rio, São Paulo e Porto Alegre. Começou na revista Fatos & Fotos e trabalhou no Correio da Manhã, O Globo, Exame, Jornal do Brasil, Veja, Istoé, Estado de S. Paulo, Zero Hora, Gazeta Mercantil e Foco-Economia e Negócios. Foi colunista de economia da Gazeta Mercantil, da Zero Hora e, nos últimos quatro anos e meio, da revista eletrônica NoMinimo, onde manteve, de dezembro de 2006 a junho de 2007, o blog Econominimo. Foi também consultor editorial do Jornal do Commercio, do Recife, e Tribuna do Norte, de Natal. É, atualmente, chefe de redação do Departamento de Jornalismo da TV Gazeta e comentarista de economia do “Jornal da Gazeta”. Graduado em economia pela USP, é membro do Grupo de Conjuntura da Fipe-USP. Radicado em São Paulo, continua torcedor do Fluminense.

Born in Rio in 1948. Journalist since 1967, he has worked as a reporter, editor, [executive editor, editor in chief and publisher] at various publications in Rio, São Paulo and Porto Alegre. He started out at Fatos & Fotos magazine and worked at the [legendary late, lamented] Correio da Manhã, O Globo, Exame (Editora Abril), Jornal do Brasil, Veja, Istoé, Estado de S. Paulo, Zero Hora, Gazeta Mercantil and Revista Foco: Economia e Negócios.

Is Foco any good? Is it still in print? I should pick up a copy.

He was an economics columnist at the Gazeta, at Zero Hora and, for the last four and a half years, at [the late, lamented] no mínimo, where he wrote the Web column “Economínimo” from December 2006 to June 2007. He also worked as consultant to the Jornal do Commercio of Recife [Pernambuco] and the Tribuna do Norte in Natal (RN, right?). He is currently news director at TV Gazeta and economic commentator for the Jornal da Gazeta. With an econ degree from the University f São Paulo, he is a member of FIPE-USP. A São Paulo resident, he considers to root for Fluminense.

Ecce Veja: The Designated Blogger on Dantas’ Inferno

Reinaldo “Mr. Hat” Azeredo Azevedo

DIOGENES: The things you must concentrate on are these: always be bold and reckless and jeer indiscriminately at everything, from kings on down. … Speak in a harsh, rough voice … In word, behave exactly like a wild beast. Forget about shame, propriety, moderation.

BUYER: Get away from me! Everything you’ve said is nauseating. It’s inhuman.

DIOGENES: But, listen. It’s so easy. Anyone can do it. No course of study required, no debates, no nonsense. My road is a short-cut to fame …

– Lucan, “Philosophies for Sale”

If anything characterizes our times, it is a sense of pervading chaos. In every field of human endeavor, the windstorms of change are fast altering the ways we live. Contemporary man is no longer anchored in certainties and thus has lost sight of who he is, where he comes from and where he is going. — The American Society for the Defense of Tradition, Family and Property, quoted in my Spinning the World Backwards.

Senior palace officials pressured the official state bank to sponsor events held by the Rede Vida and the Hallelujah Radio Network. It authorized the buying of monthly ads in Primeira Leitura magazine, a publication created by Mendonça de Barros, Minister of Communications under the Cardoso government who is talked about as an Alckmin economic adviser. Recently, Quest Investments, which belongs to Mendonça de Barros, was chosen to manage a new fund for Nossa Caixa. –Folha de S. Paulo, March 2006

Reinaldo Azevedo, the designated blogger of Veja magazine (Editora Abril, Brazil) recently suffered a stinging critique by journalist Luis Nassif, who has been publishing a series of case studies of the magazine that tend to suggest it is chronically, ahem, factually challenged.

Mostly on purpose, out of sheer gabbling contempt for getting the facts straight.

Which is true, in my observation, often enough that I don’t buy any Abril magazines.
See also

• “The Face of Veja”

Azevedo responds with his characteristic crude, brainless red-baiting and long-winded, self-righteous whining about being a martyr to some sort of vast, murky and diabolical, eternal and world-historical scheme.

Gist: “Respect for factual accuracy is a Communist plot!”

Nassif is absolutely right: This is precisely the kind of claptrap we gringos have been hearing from the neocon culture warriors, with their sneering contempt for the “reality-based community’ — “the Iraqs will shower us with rose petals, as Alexander the Great was once greeted” — for over a decade now.

Filibustering while changing the subject — accused of crude, crass pumping and dumping for hire in a bid to influence business disputes and manipulate markets, they invoke, absurdly, the ghosts of Stalin and Trotsky — is the trademark of Veja‘s approach to public debate.

The epigraph to the man’s Web column is a (mild mis)transation of Dylan Thomas’ “In My Craft or Sullen Art.”

Se em meu ofício, ou arte severa,/ Vou labutando, na quietude/ Da noite, enquanto, à luz cantante/ De encapelada lua jazem/ Tantos amantes que entre os braços/ As próprias dores vão estreitando —/ Não é por pão, nem por ambição,/ Nem para em palcos de marfim/ Pavonear-me, trocando encantos,/ Mas pelo simples salário pago/ Pelo secreto coração deles. (Dylan Thomas – Tradução de Mário Faustino)

Whoever Mário Faustino is, in translating the poem, he has converted a simple declarative statement into a conditional — “(protasis=) If in my profession or severe art, I work in the still of the night … (apodosis=) it is not for bread or amibition …” — and manages to take a moon that “rages” (active verb) and make it merely “swollen” (adjective). Like it had a toothache or gout or something.

In my craft or sullen art
Exercised in the still night
When only the moon rages
And the lovers lie abed
With all their griefs in their arms,
I labor by singing light
Not for ambition or bread
Or the strut and trade of charms
On the ivory stages
But for the common wages
Of their most secret heart.

“We are not mercenaries, we are honest, competent working journalists”: Mainardi and Azevedo hit this note often. There is ample evidence to the contrary, but when confronted with it, Veja‘s rumor-mongers tend to resort to empty ethos arguments.

The ethos appeal attempts to persuade by calling attention to the writer’s/speaker’s character. It says in effect: “I’m a great guy so you should believe what I’m telling you.” Ethos does not concern the veracity of the argument, only its appeal.

The volume of nonexistent factoids they promote without factual foundation of any kind tends to suggest that neither honesty, or competence, or both, are part of their job descriptions, however.

The principal rhetorical tactic used in Azevedo’s contribution to this debate is the “straw man” argument: He characterizes the positions of his opponents (whom he does not even mention by name) without citing their words as evidence that their arguments and positions are what he claims they are.

I tend to think of the gambit as “ventriloquism.” Ali Kamelism (Globo) resorts to this device a lot, too.

A nossa moral e a deles

“Our Morality and Theirs”

No livro Moral e Revolução, de Trotsky, o mais inteligente da geração que fez a revolução soviética, há um texto terrível chamado A Nossa Moral e A Deles. Poucas vezes li algo tão diabolicamente justificador do crime como o que vai ali. Trotsky, com efeito, era o mais brilhante da turma, mas esse libelo elimina qualquer suspeita de que o socialismo teria tomado outro rumo se ele tivesse vencido a parada contra Stálin. Talvez tivesse sido ainda pior. Ele era inegavelmente um intelectual. E os intelectuais costumam matar com mais facilidade do que os brutos, já que são capazes de encontrar motivos mais nobres. No texto, Trotsky deixa claro que os revolucionários têm licenças que aos outros são vedadas porque, afinal, são donos da chave do futuro. Se estão na vanguarda da humanidade, os critérios com que são medidos e medem-se a si mesmos não são os mesmos dos homens comuns. Se vocês notarem, esse é o fundo regressivo, humanamente regressivo, da militância esquerdista de qualquer corrente. Eles estão certos de que a “nossa (deles) moral” é superior à moral não-revolucionária.

In the book Morals and Revolution, by Trotsky, the most intelligent man of the generation that made the Soviet revolution, there is a terrible article called “Their Morals and Ours.” Not often have I read so diabolical a justification of crime as the one you find there. Trotsky, basically, was the most brilliant of the bunch, but this little book lays to rest any doubt that socialism would have taken another path had he won his fight with Stalin. It might even been even worse. He was undeniably an intellectual.

Genre Confusion: “Autohagiographical Alger Story Foolscaps the New York Times”

The Imaginary News & Nonsense Agency (Brazil): Its “Danny the Elf” was interviewed by PBS, but no one by that name apparently exists in actual reality.

The Observatório da Imprensa (Brazil) has a nice little section called “the voice of the ombudsman,” in which it covers the art of the public editor as it is practiced (here and there) around the world.

It had this gisting of last Sunday’s column from Clark Hoyt of the New York Times.

Em sua coluna de domingo [16/3/08], o ombudsman do New York Times, Clark Hoyt, conta como descobriu, com alguns cliques no computador e a ajuda de Jack Begg, supervisor do departamento de pesquisa do diário, que o livro autobiográfico Love and Consequences (Amor e Conseqüências, tradução livre), da autora Margaret Jones, não passava de uma farsa. Em apenas cinco minutos, Hoyt tomou conhecimento de que não havia registro de nenhuma Margaret B. Jones em Eugene, Oregon, e que a casa da qual a autora dizia ter sido proprietária foi comprada por Margaret Seltzer em 2000.

In his column on Sunday, March 16, the Times’ public editor, Mr. Hoyt, relates how he discovered, with a few clicks of his mouse and the help of Jack Begg, head of the newspaper’s research department, that the autobiographical book Love and Consequences … by Margaret Jones, was [a complete phony.] In just five minutes, Hoyt learned that there was no one named Margaret B. Jones in Eugene Oregon, and that the house the author said she owned was sold to a Margaret Seltzer in 2000.

On confusing fact with fiction, see also

• “The Ecce Veja Way With the News: How Fiction Came to Replace Journalism”

On the phony autobiography in question, see also

• Memoir of Girl’s Escape from Drugs, Gangs Is Bogus (NPR)

And compare

• Tania Head: Her Good (Pseudonym) Was Her (Phony) Bond

No entanto, esta simples checagem dos fatos não foi feita antes da publicação de uma crítica positiva sobre o livro, assinada por Michiko Kakutani no dia 26/2. Dois dias depois, o diário publicou outra matéria com Margaret e sua filha, em sua casa em Eugene, na seção destinada a artigos sobre o lar, na qual ela mostrava como conseguiu dar a volta por cima de uma vida marcada por violência e drogas.

This simple fact-check was not performed, however, before the publication of a positive review of the book bylined to Michiko Kakutani on February 26.

I like Michiko as a book reviewer.

Two days later, the New York daily published another article about Margaret and her daughter at their home in Eugene, in the section dedicated to articles on home life, showing how she managed to turn around a life once marked by violence and drugs.

New NMM Mission: Fret Over Debt

The bearer the markets, the bearer the bonds.

Data from Brazil’s securities regulator, the CVM, show that debenture (bearer bond) issues so far this year have reached R$32.2 billion, more than two-thirds of issues during all of 2007. It is true, however, that R$30 billion of these new issues representing fundraising by leasing corporations, which means they are not “pure debentures.” Even so, the R$2.2 billion in “pure debentures” raised for surpasses the R$567 million issued in the same period in 2007.

Empresas brasileiras buscam opções com aperto do crédito: “Brazilian companies seek alternatives during credit crunch.” Source: Invertia (Terra Brasil)/Reuters.

I am going to be spending my time chasing down the details of such trends, so I am doing a fair amount of background reading and trying to update my Rolodex with people who know what they are talking about in this area.

My adventures in giving modest advice to an investor relations firm with Brazilian clients on how to communicate effectively in mid-Atlantic financial English have ended.

As empresas brasileiras já consideram alternativas, como financiamento bancário e emissão de papéis apenas no mercado doméstico, para garantir novos recursos em meio à crise global do crédito.

 Brazilian companies are considered alternatives, such as bank financing and debt issues limited to the domestic market, to guarantee their supply of new capital in the midst of a global credit crunch.

Bem capitalizadas, as companhias estão suportando bem o enxugamento das linhas externas, mas têm contemplado diversas opções, inclusive a de simplesmente postergar novas captações até que as taxas retornem aos níveis do ano passado. As alternativas passam também pela busca de recursos em bancos de fomento ou privados internacionais da Europa e Ásia.

With plenty of capital, these companies are holding up well as foreign lines of credit dry up, but have been pondering a number of options, including simply postponing new financing until interest rates return to last year’s levels. Other alternatives include seeking funding from international private banks and venture funds in Europe and Asia.

De acordo com profissionais de bancos de investimentos, esse cenário, bem mais ameno que o enfrentado em crises anteriores, deve-se à combinação de um mercado de capitais vigoroso e da queda continuada do dólar frente ao real, o que permitiu às empresas reduzir e melhorar o perfil de endividamento, além de obter recursos para investimentos.

According to investment bankers, this scenario, which is much more comfortable than during past crises, is attributable to a combination of vigorous capital markets and the continuing decline of the dollar against the Brazilian real, which enables companies to reduce and improve the quality of their debt, as well as to obtain financing for investments.

“Agora, quem tem dívidas para rolar, está preferindo pagar ou buscar outras fontes”, disse José Guilherme Lembi de Faria, diretor-executivo do BBI.

“Then again, those who have debt to roll over are tending to either pay it down or seek other sources,” said José Guilherme Lembi de Faria, CEO of BBI.

Investment banking division of Bradesco.

“UBS Will Dissolve Banco Pactual Partnership”: Report

Luis Nassif relates in Dinheiro Vivo that UBS will dissolve its partnership with Banco Pactual. UBS said it refused to comment on “market rumors.”

Note for future reference: Did Mr. Nassif call the shot successfully?

I note it mainly because I am trying to patiently and systematically compile information on debt and equity issuers here. Boring, but someone has to do it.

I have not looked at the issuance and underwriting league tables yet, but just from scanning the news, I would guess that UBS Pactual is the New York Yankees of that league.

But I note also in passing that Pactual has been involved in some business disputes of the gran guignol variety over the last decade.

As has UBS, apparently. A Swiss banker working here got some rough treatment, he says, from Brazilian federal police and the Brazilian press recently. See

• Brazil: Did iG Piss on the Swiss?

Dentro em breve o UBS (União de Bancos Suiços) entrará com medida judicial visando dissolver a associação que montou com o Banco Pactual no Brasil.

UBS will soon file suit to dissolve its partnership with Banco Pactual in Brazil.

Os jornais e revistas brasileiros, que se cansaram de louvar a “promoção” de André Esteves a um “alto cargo” no UBS suíço, agora se calam. Ele está de volta ao Brasil, três meses depois de ter “assumido” funções no exterior.

Brazilian newspapers and magazines, who have worn themselves out praising André Esteves’ “promotion” to a “senior position” at UBS in Switzerland have now fallen silent. He is back in Brazil, three months after having “taken on new responsibilities” abroad.

Por aqui, o UBS se desmancha. Nove funcionários de carreira do UBS brasileiro pularam fora, depois da associação com o Pactual. Não suportaram o modo de operação dos ex-Pactual.

Here in Brazil, UBS is unraveling. Nine career Brazilian employees jumped ship after the partnership with Pactual was signed. They could not stand the way the former Pactual bankers did business.

“Veja Ratfinked Cardoso’s Karl Rove”

School for scandal remains in session: “Straight-razor to the quick: the blade of the anticorruption federal police operation has already [chopped off the head] of [the owner of Gautama] and [the minister of Mines and Energy] and now is nearing the neck of the President of the Senate.” Violent imagery straight from the media playbook of Mexico’s Gente Nueva. The article did not accuse the Senator of any relationship to Gautama, however. It accused him of accepting money from a big construction firm, Mendes Junior, to pay personal expenses. Those charges, and others later shrieked about by the magazine, were never substantiated. Nothing was revealed. Veja‘s anonymous source: The palimony lawyer of the Senator’s baby mom, who later appeared in Veja’s sister publication, Playboy Brasil. Starkers.

Revista Veja perde ação contra ex-secretário-geral de FHC: Imprensa magazine (Brazil) reports on a civil libel action brought by a former government official against Veja magazine (Editora Abril) and a number of other news organizations.

The man, the former chief of staff [sort of] of the Cardoso presidency, also won defamation suits against O Globo and the Folha de S. Paulo.

This would make a perfect case study for journalist Luis Nassif, who is writing a book on Veja journalism — briefest of summaries: “It stinks!” — in installments and publishing the draft chapters to Google Pages.

Nassif and the Estado de S. Paulo were cited by the plaintiff in the case as exception to the lynch-mob atmosphere surrounding the case (see below).

Press freedom watchers have expressed (to some extent justifiable) concern about the extreme litigiousness of the relationship between the Brazilian news media and the public figures it covers, but often fail, I think, to draw a distinction between

1. SLAPP suits designed to punish those who publish inconvenient but corroborated facts — which do seem to be thick on the ground here (Bishop Macedo v. Elvira Lobato of he Folha may be such a case, for example), and
2. Genuine cases of what we refer to here at NMM as “the gabbling ratfink” — vicious, unbridled, mendacious, moral panic-driven, rumor-mongering, gabbling, quacking, flimsy, alarmist claptrap, perpetrated with “actual malice” or the journalistic equivalent of reckless disregard for the Reality Principle.

Conducting a public information service while giddily intoxicated with the power of monopolizing the gazillion-jigawatt megaphone.

Brazil needs something like a New York Times Co. v. Sullivan to help it conceptualize this difference.

News coverage and activism around this issue, meanwhile, needs to engage in the lost art of fact-checking to shine light on the difference between freedom of expression and the screaming of vicious lies — “The Tutsi have already massacred 300,000 Hutu!” — into the gazillion-jigawatt megaphone.

Here, for example, no summary of the case in all the (scant) news coverage I have read bothers to summarize what nonexistent facts were allegedly alleged.

It is impossible to judge whether the judges judged correctly — whether Veja was a victim of oppression or a perpetrator of the gabbling ratfink — without knowing what factoids it was found to have misstated for fun and profit.

The plaintiff in the case also applied for sanctions against the federal prosecutors in his case — and won suspensions for both of them. He published an indignant letter in the Observátorio da Imprensa in 2002 about the “lynch mob” journalism to which he was subjected. I translate that below.

Revista Veja foi condenada a pagar indenização de R$ 150 mil por danos morais ao ex-secretário-geral da Presidência no governo Fernando Henrique Cardoso, Eduardo Jorge Caldas Pereira.

Veja magazine was sentenced to pay damages of R$150,000 for defamation to the former secretary-general of the federal presidency under the Cardoso administration, Eduardo Jorge Caldas Pereira.

Em votação unânime na tarde da última terça-feira (18), a 4ª Turma do Superior Tribunal de Justiça – formada pelos ministros Aldir Passarinho Junior, Fernando Gonçalves, Massami Uyeda e João Otávio de Noronha – confirmou a condenação da revista.

In an unanimous vote, the 4th Chamber of the [local equivalent of the Circuit Court of Appeals, in terms of hierarchy] — Passarinho, Gonçalves, Uyeda and Noronha — upheld the condemnation of the magazine.

De acordo com informações do site Consultor Jurídico, esta é a quarta decisão que Eduardo Jorge vence. Ele já recebeu indenizações do jornal O Globo e Correio Braziliense. Já o diário Folha de S.Paulo também foi condenado a pagar indenização e já fez o depósito do dinheiro. A revista Isto É também foi condenada, mas tem recurso no STJ.

According to Consultor Jurídico, this is the fourth case Caldas Perreira has won. He has already been paid damages by O Globo and the Correio Braziliense. The Folha de S. Paulo was also ordered to pay damages, and has deposited the amount in escrow. IstoÉ magazine was also ordered to pay damages, but an appeal is pending.

Current Content Downloads: Studies in the Reliability of New World Lusophone First-Person Narrators

Violão by Torres, a local luthier. If I had to save anything from a house fire, that and the Linux-powered laptop would top the list.

Between projects at the moment, I had a chance yesterday to do some sebo– (secondhand bookstore) diving yesterday here in São Paulo, acquiring some new bedside-table reading material in the process.

Mario Sergio Conti’s Noticias do Planalto: A Imprensa e Fernando Collor (“News from the Federal District: The Press and President Collor”) is a wild Dickensian romp by a former editor of Veja magazine.

A book whose reputation precedes it: A number of the journalists whose names appear in the index at the back question the factual accuracy of statements made about their professional activities in the book.

The book reports, for example, that when Veja founder Mino Carta was editor of IstoÉ (and the failed Jornal da República), he and the magazine supported Orestes Quercia for governor of São Paulo and were rewarded, when Quercia was elected, with advertising contracts from state-owned firms and private-sector fat-cat political allies on the man with the truck-driver sideburns.

Which Mr. Carta has hotly denied on a number of occasions, I think.

The preface acknowledges Diogo Mainardi as having rendered invaluable assistance to the author, which may explain a few things. See also

• Mainardi Muzzled

One of the most notable features of the book: The wealth of intimate, firsthand detail — details only an eyewitness with a prodigious memory could provide — and not a single sourcing statement, much less a footnote.

Also on the shelf in the sebo where I found the book: A collection of essays by Paulo Francis with (an inane) preface by Mainardi. On whom see also

• “I Am a Cheap Imitator of Paulo Francis”: In Search of the Sun Records Mainardi

Still, the Collor era is a primal scene of unspeakable trauma for Brazilians of my wife’s generation, and one that I have needed to try to understand better.

To the extent that any of it is comprehensible.

Rio: Brokerage and Jokerage at the Junta Comercial?

Vintage roleta with bichos. Source: Musem of the Policia Civil, Rio de Janeiro

The DRACO commander said the scheme counted on the participation of forwarding agents (customs brokers), business owners, and accounting and law firms, which paid bribes to JC employees, some of them allegedly aides to the president of the agency, in order to alter registration information on companies.

Polícia prende 21 suspeitos de fraudes na Junta Comercial do Rio: The anti-organized crime unit of the Rio de Janeiro state judicial police raid the Rio de Janeiro Junta Comercial — equivalent to the corporations registry of an American state, more or less.

A Draco Delegacia de Repressão às Ações Criminosas Organizadas, da Polícia Civil do Rio de Janeiro, prendeu nesta quarta-feira 21 pessoas acusadas de fraudes na Junta Comercial do Rio.

DRACO arrested 21 persons today accused of fraud at the Junta Comercial.

A operação, batizada de Rio Branco, cumpre 36 mandados de prisão e 36 de busca e apreensão.

Dubbed Operation Rio Branco, it involved the serving of 36 arrest warrants and 36 search warrants.

Segundo informações da delegacia, a quadrilha atuava há pelo menos 10 anos e o esquema funcionava com a ajuda de cartórios.

DRACO said the criminal conspiracy had operated for at least 10 years and functioned with the help of public notaries and registry offices.

Memories of Madeleine: “Grotesque Nonsense”

Sorry.

The Brazilian news media gives a blank check to the international news agencies with respect to credbility. If these agencies commit an error, the reporting of Brazilian news organizations collapses along with it. —Ricardo Kaufmann

Jornais pedem desculpas aos pais de Madeleine: the G1/Globo news portal — which as of last week has a new editor, I noticed — picks up a story we saw on the BBC last night: unprecedented front-page admissions by two British tabloids that they simply invented defamatory fictions out of whole cloth in mass quantities.

The next question is how much of that fictional, defamatory bullshit Globo itself picked up off the wires and passed along to its readers. (It now seems to have moved on to the Brazilian madame who rustled up hookers for Eliot Spitzer.)

Someone should do a thorough postmortem on Globo’s blanket coverage of this story to see how much toxic sludge it failed to filter as it flowed down the content pipeline.

The benchmark for this sort of hysteria in Brazil was the Escola Base case in the last decade — shrieking lynch-mob journalism in a case of alleged systematic sexual abuse at a preschool, not dissimilar to the McMartin case in the States.

Dois jornais britânicos pediram nesta quarta-feira (19) desculpas em suas capas aos pais de Madeleine McCann, a menina que desapareceu no dia 3 de maio de 2007 em Portugal, informou a “BBC”.

Two British newspapers apologized today on their front pages to the parents of Madeleine McCann, the little girl who disappeared in Portugual on May 3, 2007, the BBC reports.

Lusophone Debt Instruments: Adult-Supervised When Securitized

New Lusophone concept of the day.

A exigência de registro prévio de CCBs na CVM: The Brazilian securities regulator (the CVM) is requiring issuers of CCBs — bank letters of credit, basically — to register them prior to issuance under some circumstances. A local legal eagle offers readers of Valor (Brazil) an analysis of the decision, which has to pass through the rule-making phase before taking effect.

A CCB is a

título de crédito emitido, por pessoa física ou jurídica, em favor de instituição financeira ou de entidade a esta equiparada, representando promessa de pagamento em dinheiro, decorrente de operação de crédito, de qualquer modalidade.

a credit instrument, issued by an individual or corporation in favor of a financial institution or comparable entity, that represents a promise to pay cash as part of a credit transaction of any kind.

In other words, the CVM is now officially worried about the risks of securitizing funky debts, I guess you could say. Seems like a timely and topical decision.

I am noting it just because I am studying up on the CVM, and praticing my Lusophone legalese at the same time.

Através de ata de reunião de seu colegiado de número 3, de 22 de janeiro de 2008, a Comissão de Valores Mobiliários (CVM) decidiu, de forma unânime, que as cédulas de crédito bancário (CCBs) “serão valores mobiliários, caso a instituição financeira em favor das quais elas foram emitidas (1) realize uma oferta pública de CCBs; e (2) exclua sua responsabilidade nos títulos”, entendendo o órgão regulador que as CCBs, em qualquer destas circunstâncias, estariam sujeitas a registro prévio na CVM.

In the minutes of its January 22, 2008 meeting, the CVM resolved, unanimously, that [bank letters of credit] “will be deemed securities in the event that the financial institution in favor of which they were issued (1) offers the CCBs for public sale; and (2) [divests] its interest in these instruments.” The CVM ruled that CCBs, in either of these circumstances, must be registered as securities with the CVM prior to issuance.

Ecce Veja: “The Ultimate Factoid”

FEAR AT THE SUPREME COURT. “It is intolerable, this atmosphere we live in, with the abusive conduct of federal agents or agencies deeply enmeshed with the machinery of the State. Generalized wiretapping is an indicator of, and an exercise in, authoritarian politics,” says Justice Celso de Mello. “Supreme Court justices react to the suspicion of wiretaps in the highest court in the land.” Another justice pictured here, Mendes, was roundly criticized for not recusing himself from a vote that would have resulted in the quashing of charges of administrative improbity against himself.

factoid (something resembling a fact; unverified (often invented) information that is given credibility because it appeared in print)

No, I have no reason to believe in wiretapping [of the Supreme Court] –Justice Pertence, to Terra Magazine

The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane. –Marcus Aurelius

O último factóide: Brazilian journalist Luis Nassif continues his series of case studies of the (mal)practice of journalism at Veja magazine.

I keep translating, as I have time, because this is something that I have noticed, too. And it really bothers me. Magazines are very expensive here. And these people want me to pay them good money to be crudely bullshitted, week in and week out? I don’t think so.

This installment, titled “the ultimate factoid,” looks at a case that was amply commented at the time (a fair amount of which commenary I translated): A bizarre cover story on “suspicions that Supreme Court justices are being wiretapped.”

See

• Veja Só: “Panic in the Palace of Maximum Justice!”
• Veja Só: Marcus Aurelius on Christians and Lions
• Veja Só: Minister of Justice on “The Shadow of the Police State”
• Nassif on Veja and the Leaky Police
• Brazil: “Feds Bork Veja Back”
• Veja Só: More Reactions to “Terror at the Supreme Court”
• Brazil: “The Chief of the Politicized Gestapo Speaks”

What was so bizarre about it?

Among other things, one of the magazine’s principal sources, Justice Mello, went on the radio the next day and confirmed that these “suspicions” were based on a hoax e-mail that the federal police had already proven was a (crude and gabbling) fraud.

The author was charged with making false accusations.

Justice Mello had earlier charged that the Supreme Electoral Tribunal (TSE), over which he presides was being wiretapped. A private consultant hired by the TSE reported finding wiretaps.

The federal police checked their work, decided the private security consultant was lying, and indicted it for making false statements as well. Whatever happened to that case?

Colombia: EL TIEMPO Regrets The Leak Journalism

The photo in question: Not the Ecuadoran security minister.

EL TIEMPO (Bogotá) runs a photo it claims shows the Ecuadoran minister of internal and external security with “Raúl Reyes” of FARC, supposedly captured from the laptop of the FARC commander during the raid that killed him and other members of FARC party camped in the Ecuadoran jungle.

It then retracts that statement, saying its anonymous source inside the National Police disinformed it. The photo is not of the Ecuadoran official.

Ecuador now refuses to resume diplomatic relations with Uribeland — “the other Bolivarian republic” — citing this story as an instance of what it calls a government-sponsored, media-driven “smear campaign.”

EL TIEMPO belongs to the Santos family, which recently sold a substantial stake to a Spanish media group with promises that its editorial independence would be respected. The vice-president and defense minister of Colombia are both named Santos.

J.J. Rendón reportedly works for them. But see also

• Colombia: “J.J. Rendon Does Not Work For Me”

Another instance of what looks to have been a disinformation gambit in the Rendón-Segretti-Mainardi style:

• Colombia: “Defense Acknowledges That Guardian Article Was Phonier Than a Paraguayan Marlboro”

See also

• “FARC Sought Romanian Uranium from Russian Mobster With Israeli Passport”
• “Hooker Scandal Topples Bolivian Government!”: El Mundo (Bolivia) Regrets the Errors
• “Rumors: Voices That Insinuate”
• Colombia: Hookers, Book Cookers and the Zen of the Poison Pen

Given that sensational initial reports tend to stick in the memory more than corrections do, I imagine the idea here is that the rumor of an Ecuador in cahoots with the narco-FARC will persist in the popular imagination despite the correction.

We saw a case of this in Brazil recently (where rumors that the current government is in cahoots with the narco-FARC are thick upon the ground as well.)

An opposition senator screamed that the Brazilian government was secretely shipping weapons to Venezuela, taking sides in the diplomatic crisis and helping to militarize it!

The defense minister here explained that this was some sort of routine transaction involving a modest consignment of police revolvers or something.

The senator quietly said he accepted that explanation.

The hysterical screaming got a lot more play, of course.

La Dirección General de la Policía Nacional emitió un comunicado en el que asume que el documento gráfico fue suministrado por una fuente de esa institución. EL TIEMPO ofreció disculpas al ministro.

The National Police  issued a press release in which it admits that the photo was handed over by a National Police source. EL TIEMPO has apologized to the minister.

La institución ordenó una investigación interna para establecer quienes fueron los responsables de la entrega de la fotografía y de la información sobre la misma.

The National Police has ordered an internal investigation to establish who was responsible for leaking the photo and the information about it.

El personaje que apareció en la fotografía es en realidad el dirigente comunista argentino Patricio Etchegaray.

The person who appeared in the photo is in fact the Argentine communist leader Patricio Etchegaray.

Sampa Diary: Beto’s Via Crucis

El Baño del Papa: My wife and I finally manage to steal a few hours to hunt through a second-hand bookstore or two and go see a current movie in (an egregiously overpriced São Paulo cinema — the one near the Sujinho and the bar where Juvenal the waiter once held court — with substandard projection and sound quality and torture-chamber seating.)

In this case, “The Pope’s Bathroom,” a Uruguayan product (with some help from Brazil’s Ancine because it is set partially on the other side of the Brasil-Uruguayan border, having to do with petty bicycle smugglers).

You know what it reminded me strongly of? The Gods Must Be Crazy. A wholly sympathetic, even Chaplinesque, hero who, though utterly clueless and at the mercy of forces he does not comprehend, persists heroically in an absurd quest.

Synopsis.

Es el año 1988 y el Papa Juan Pablo II visitará Melo. Se calcula que 50.000 personas asistirán a verlo. Los pobladores más humildes creen que vendiéndole comida y bebida a esa multitud se harán casi ricos. Beto, un contrabandista en bicicleta, decide en cambio construir un excusado en el frente de su casa y alquilar el servicio. Para lograr su objetivo debe atravesar una serie de dificultades tragicómicas. Finalmente, sólo unos 8.000 fieles concurren. Nadie vende nada y únicamente una anciana hace uso del retrete. El sueño de Beto se hace trizas pero a lo largo de la historia su hija ha llegado a comprenderlo mejor. Quizás incluso a quererlo.

Readers to the Brazilian Dailies: “Check Yourself or to Heck With Yourself”

“Exit polls give victory to Chávez in referendum”: The Folha de S. Paulo front page on the day after. Not as bad as Miriam Leitão of O Globo writing “Chávez Won the Referendum Because He Manipulated the System!” Chávez lost the referendum. Quack.

Readers ‘efforts in support of greater accuracy is one of the most striking developments in contemporary journalism.

Leitores e checagem: “Readers and fact-checking.”

Mario Magalhães, ombudsman of the Folha de S. Paulo, does fine work, waving a banner with the inscription “This newspaper belongs to its readers (who after all are the people who pay our salaries).” More power to the guy.

If you can find the tiny little link to his column, buried way down the newpaper’s Web site, it is well worth bookmarking it and making it the first thing you read in the Folha every day.

File under

• “The Death of Fact-Checking in Brazilian Journalism”

O editor de um excelente diário britânico costuma dizer que os jornalistas estão errados ao pensar que sabem muito mais que os leitores.

The editor of an excellent British daily is wont to say that journalists are wrong to think they they know a lot more than their readers do.

Em minha opinião, o raciocínio fica no meio do caminho: os jornalistas se equivocam ao ignorar que, sobre os assuntos a respeito dos quais informam, há sempre algum leitor que sabe mais do que eles (nós).

In my opinion, this line of reasoning does not go far enough. Journalists are wrong to ignore the fact that, regarding the subjects they cover, there is always some reader who knows more than they (we) do.

Mexico: “Is SEGOB a Dead Man Walking?”

In the Midnight Hour: Harvard’s favorite son and his Brooks Bros. Riot Brigade as the oath is administered at 3 minutes after midnight. Not shown: batallion of Marines required to get him into the building. Fox, left: Sangre de Coca-Cola. 

Writing in the Diario de Yucatán (Mexico), Eduardo Huchim summarizes the Mouriño scandal under the heading “A Zombie [Dead Man Walking?] in Government Affairs?”

I have chosen the op-ed/news analysis more or less at random. Trying to catch up on the basic facts in the case.  See also

• Mexico: “The Party of God is the Party of Fraud”

on Mexican versions of the famous Italian Mani Puliti campaign.

Es difícil analizar en sus estrictos méritos un escándalo como el que tiene en su centro al todavía secretario de Gobernación, Juan Camilo Mouriño Terrazo, y en su génesis a Andrés Manuel López Obrador. El hecho de que éste haya dado a conocer el presunto tráfico de influencias basta para tenerlo como verdad revelada para unos y como mentira dolosamente inventada para otros, así de polarizadas continúan grandes porciones de la sociedad. Sin embargo, conviene intentar ese análisis, y una buena manera de hacerlo es examinar los datos duros. Veamos:.

It is difficult to analyze a scandal like the one with Secretary of the Interior Mouriño at its center strictly on the merits, or the origins of the scandal with [former presidential candidate and federal district governor] López Obrador. The fact that it was López who publicized alleged influence-peddling by the cabinet secretary is enough for some people to accept the charges as gospel truth and for others to treat it as a fraudulent lie, because broad sectors Mexican society remain polarized. However, it is worthwhile to at least attempt  such an analysis, looking at the hard facts. Let’s look:

1) En su carácter de apoderado de Ivancar, Mouriño firmó con Pemex contratos que beneficiaban a una empresa de su familia, y cuando lo hizo era, simultáneamente, presidente de la Comisión de Energía de la Cámara de Diputados o asesor del entonces secretario de Energía, Felipe Calderón Hinojosa. La autenticidad de los contratos está fuera de duda porque el propio Mouriño la reconoció públicamente.

1. In his capapcity as legal representative of Ivancar, Mouriño signed contracts with Pemex that benefited a firm belonging to his own family, at a time when he was also president of the energy committee in the lower house of Congress or an aide to then Energy Secretary Felipe Calderón. These contracts are unquestionably authentic, and Mouriño himself has recognized this publicly.

“Mexican Feds Are Running Around Headless”

“Inside the PFP: Disorganization, inefficiency and corruption.” Secondary coverline: “The [2006 national election] ballots: Evidence in danger.” Proceso‘s attempt to requisition and inspect the ballots from that election under Mexico’s freedom of information act has not succeeded — some information is freer than other information — but has so far stemmed the planned destruction of the documents.

Herrera is a commissioner-general (a rank that requires 25 years’ service, he notes) and up until last January 19 worked as PFP regional security coordinator. That was the day his boss, Millán, fired him, “without cause. The differences between them stemmed, among other things, from Herrera’s refusal to support Covarrubias Hernández, a 25-year-old whom Millán intended to name inspector-general, a post which requires 25 years’ experience.

“There were no air-to-ground communications with our base. These aircraft just added to the problem, because in order to get air support during an emergency while going up against the narco, you had to channel your requests through the chief of staff of the PFP, Luna Valderrábano — Genaro García Luna’s former chauffeur — who lacks experience and is someone you could never seem to locate.”

La guerra antinarco: de la simulación a la inoperancia: Proceso (Mexico) interviews a former Mexican drug warrior on the progress made in the crusade against organized crime in our neighbor to the south.

It is this week’s cover story (above). See also the story in El Economista today: “Narcoexecutions on the rise.”

The disgruntled ex-employee says the Mexican war on drugs is a complete flop and blames the head of the SSP, the federal public safety secretary — who happens to be the son-in-law of Elba Esther Gordillo of the SNTE teachers union. On whom see also

• The Teacher Wields Her Ruler
• Mexico: OECD Pesters Elba Esther
• Mexico: New Book of Esther Features The Teacher
• Teacher’s Fret? Elba Esther Under Investigation
• How Elba Esther Got Her Chips in the Big Game: Proceso
• Elba “The Teacher” Esther: The Rank and File Fester

But wait: Have we not been reading in our Yankee papers lately that the Mexicans are going great guns, making great strides, and are going to lick the Bolivian marching powder industry very soon now if we would only sell them enough Black Hawk helicopters?

Atacada por los mismos vicios que las antiguas corporaciones policiacas, la cúpula de la Secretaría de Seguridad Pública, encabezada por Genaro García Luna, es la causante del fracaso de la “guerra contra el narcotráfico”. Un alto mando de la Policía Federal Preventiva, despedido de esta corporación por oponerse a los “enjuagues”, no sólo denuncia el influyentismo, la corrupción y el desorden, sino su resultado: la ineficacia de los operativos contra el narco…

Suffering from the same vices that afflicted older law-enforcement agencies, the leadership of the Mexican Secretary of Public Security (SSP), headed by Genaro García Luna, is the cause of the failure of the “war on the narcotraffic.” A senior official of the Mexican federal police (PFP), recently fired from the force for opposing [“whitewashes”?] not only denounces patronage schemes, corruption and disorganization, but also their results: The ineffectiveness of federal operations against the narcotraffic …

El titular de la Secretaría de Seguridad Pública (SSP), Genaro García Luna, ha convertido la guerra contra el narco en un gran negocio para sus amigos e incondicionales, por lo que en esa dependencia y en la Policía Federal Preventiva (PFP) privan la corrupción, el dobleteo de viáticos, la compra de aeronaves sin licitación y, peor aún, el desorden que ha ocasionado el fracaso de los operativos contra el narcotráfico iniciados en diciembre de 2007 por el presidente Calderón.

The head of the SSP, Genaro García Luna, has transformed the war on drugs into a big business for his friends and supporters, which is why this agency and the federal police (PFP) are shot through with corruption, inflated salaries, no-bid procurement deals, and worst of all, the sort of disorganization that has led to the failure of the anti-narco operations kicked off by President Calderón in December 2007.

Tal es la evaluación que hace Javier Herrera Valles –recientemente destituido de la Coordinación de Seguridad Regional de la PFP por órdenes de García Luna–, para quien la ineficacia de los operativos contra el crimen organizado –que “a los altos mandos de la PFP nos avergüenza”– ha sido propiciada desde la cúpula de la SSP.

That is the evaluation of Javier Herrera Valles — recently fired as regional security coordinator of the SSP by García Luna — in whose view the ineffectiveness of these operation against organized crime — which “we senior PFP officials are ashamed of” — is the fault of SSP leadership.

En entrevista con Proceso, Herrera Valles cuenta que al tomar conciencia de las presuntas complicidades de García Luna con la delincuencia, decidió enviar una carta al presidente Felipe Calderón, a la cual adjuntó varios documentos que le llegaron por diversas vías.

In an interview with Proceso, Herrera Valles says that when he became aware of García Luna’s alleged ties to criminals, he decided to send a letter to the president, to which he annexed several documents that had come to him from various sources.

En esa carta de siete cuartillas –una copia de la cual tiene Proceso–, Herrera Valles recuerda al presidente Calderón que, en el sexenio pasado, Genaro García Luna creó la AFI, “con la complacencia del entonces presidente Vicente Fox Quesada (posiblemente engañado)”, para combatir a la delincuencia organizada, pero en vez de disminuir, “se fortaleció e incrementó el narcomenudeo en nuestro país, así como el tráfico de drogas y la violencia…”.

In this seven-page letter — a copy of which Proceso has obtained — Herrera reminds Calderón that during the previous administration, García Luna created the AFI, “with the tacit support of then-President Fox (who may have been deceived in the matter),” to combat organized crime, but that instead of diminishing, “the narcoretail business grew and thrived in our nation, as did the narcotraffic and violence.”