Living in Brasil you become used to the corruption, and the worst distribution of wealth in the world, but what is difficult to get used to, is the complacency of the people, towards the elected officials who steal from them. Sure the citizens curse when driving down roads, lined with opulent houses and marvelous gated communities, when the public streets have pot-holes more easily described as craters. Most people who follow the local news here, realize that road construction money is almost always pilfered before it reaches the holes in the road, and each new politician is able to point a finger at the last one, until the entire charade is just that; "a comic act".
Speaking of comic, the comedy shows on television have had no-end of material lately, and the newspapers are filled with rhetoric and public jabs, lampoons, etc... but underneath it all, the people of Brazil, after 450 years of "same-old, same-old" have just gotten used to being shorted. However, maybe the global embarrassment recently has gone too far, as now there is some serious action taking place in the capital that might just turn off the golden spigot...
Brazil Lawmakers Seek to Tighten Money Laundering Enforcement
Aug. 5 (Bloomberg) --- Brazilian lawmakers are calling on the Finance
Ministry and central bank to tighten enforcement of money laundering
regulations after a probe found President Luiz Inacio Lula da Silva's
Workers' Party used banks to hide illegal campaign contributions.
``The findings so far point to a money-laundering scheme that got
around every existing control, every existing oversight,'' said Rep.
Gustavo Fruet, 42, a member of the congressional committee that is
probing the allegations.
The central bank, reacting to six weeks of hearings into claims that
Lula's party laundered at least $25 million to bribe lawmakers,
pledged July 27 to take steps to limit abuses of financial
transactions. The bank monitors all withdrawals, deposits and
transfers in the country and can report anything suspicious to police,
prosecutors or the Finance Ministry.
The investigation shows regulation by the Finance Ministry, the
central bank and the country's auditing and tax agencies is
inadequate, said Walter Maierovitch, a retired Brazilian judge who
heads an international institute that monitors organized crime.
Brazil's laws, as tough as those in the U.S. and Europe, don't work
because the Finance Ministry's Financial Activities Control Council
and the central bank fail to report suspicious transactions to the
police, he said.
``Brazil has great laws on the books, but they aren't being
enforced,'' Maierovitch, director of Instituto Brasileiro Giovanni
Falcone de Ciencias Criminais, said in an interview in Sao Paulo.
``This scandal reinforces Brazil's image as the international venue of
choice for money laundering.''
Brazil, a country of 180 million, is among 55 countries the U.S.
Secretary of State list as a money-laundering center of ``primary
concern.'' It ranks 59 in a list of 146 of the most corrupt countries,
according to Transparency International, a non-profit organization
based in Berlin.
Influence Peddling
Brazil is known as a haven for criminals on the run such as ``Great
Train Robber'' Ronnie Biggs, who spent almost three decades in Rio de
Janeiro. Biggs was part of a 15-member gang that made off with 2.6
million pounds ($4.6 million) after raiding the Glasgow to London mail
train on Aug. 8 1963.
In 1992, Fernando Collor de Mello stepped down as Brazil's president
after being accused of involvement in an influence- peddling ring.
Last December, congress ended an 18-month probe that documented a $32
billion money laundering scheme involving overseas transfers through a
state bank. Lawmakers didn't recommend any criminal action or changes
to laws. None of 91 politicians named in the final report were indicted.
Bags of Money
As the most recent investigation unfolded, police in July arrested
politicians at airports in Brazil carrying tens of thousands of
dollars of cash stuffed in their clothing and suitcases.
Congress is investigating whether advertising executive Marcos Valerio
Fernandes de Souza laundered illegal contributions to the Workers'
Party via inflated contracts with state companies and other donors,
said Rep. Carlos Sampaio, 39, a member of the investigative committee.
Valerio may have kicked back funds from the contracts to Lula's
Workers' Party through accounts at Banco Rural SA held by an
advertising firm he partly owns, SMP&B Comunicacoes Ltda, according to
Sampaio.
One lawmaker had his secretary withdraw as much as 600,000 reais
($260,000) from the accounts; another deputy's assistant withdrew
320,000 reais, said Rep. Pompeo de Mattos, a member of the
investigative committee, citing documents in a July 19 interview.
Alarms
Among Brazil's anti-money laundering laws is a requirement for banks
to report details of every withdrawal above 10,000 reais to the
Finance Ministry. The central bank has alarms designed to spot
suspicious transfers. It's up to the Finance Ministry to report those
transactions to police or prosecutors.
Congress's investigation makes clear those controls failed, said
Fruet, a member of the opposition Brazilian Social Democracy Party.
``They seemed to have underestimated the size and frequency of all the
transactions,'' Luiz Flavio Gomes, 39, a retired Brazilian judge and
author of ``Organized Crime and Money Laundering in Brazil,'' said in
an interview in Sao Paulo.
Belo Horizonte-based Banco Rural spokesman Caio Vieira said the bank
has complied with laws requiring transactions be reported both to the
Finance Ministry and the central bank. Valerio denied any wrongdoing
July 19 through a spokesman and said the funds funneled through his
firm's accounts were unreported loans to the Workers' Party.
The Workers' Party in a statement Aug. 2 said it is investigating all
allegations of wrongdoing by its members.
Finance Minister Antonio Palocci said this week in Rio that government
agencies have improved cooperation to better spot money laundering
since Lula took office in January 2003.
``It's a systematic effort that has evolved well in Brazil,'' Palocci,
44, said at a news conference Aug. 2.
Lula's Efforts
U.S. Treasury Secretary John Snow, 66, in Brazil this week for
meetings with Lula, Palocci and central bank President Henrique
Meirelles, 59, also praised Lula's efforts.
Lawmakers say they remain concerned.
Investigators are probing a Dec. 16, 2003 e-mail to the manager of
Banco Rural's branch in Brasilia from SMP&B Finance Director Simone
Vasconcelos, according to Fruet.
In the message, Vasconcelos asks for ``good care and prompt
attention'' to four clients, including two lower house deputies, who
planned to take out 350,000 reais the next day, said Fruet, who
allowed Bloomberg to examine the document.
To contact the reporter on this story:
Guillermo Parra-Bernal in Sao Paulo on at
gparra@... Michael Smith in Rio de Janeiro
mssmith@...
