December 7, 2021

Guardian UK story in August 2012 on corruption in Brazil has link to Cayman

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brazil corruption trialThe following is the original story

Corruption trial of the century

From The Guardian, Thursday 2 August 2012 20.31 BST

Brazil’s ‘corruption trial of the century’ expected to hurt ruling coalition

Politicians stand accused of involvement in illegal vote-buying scandal

Jonathan Watts in Rio de Janeiro

In what has been billed as Brazil’s “trial of the century”, the supreme court on Thursday started to hear the case of 38 prominent defendants – including former ministers, politicians, bankers and businessmen – who are implicated in a vote-buying case that first hit the government of Luiz Inácio Lula da Silva in 2005.

The Mensalão (big monthly payment) scandal, as it is commonly known, saw millions of dollars siphoned from public funds to pay off politicians and buy support for the coalition. Among the accused is Jose Dirceau, Lula’s chief of staff.

The attorney general, Roberto Gurgel, has said it was “the most daring and outrageous corruption scheme and embezzlement of public funds ever seen in Brazil”.

katia_rabello_1211dozeLula is not in the dock, but he has apologised on behalf of the Workers Party, now led by President Dilma Rousseff, and the case looks likely to hurt the coalition in this autumn’s municipal elections. Rousseff seems unlikely to be directly affected as she has fired ministers who have been implicated in scandals.

Corruption and murder are nothing new in Brazil, but the prominence of the case has prompted some to hope an endemic problem is now being addressed.

“For the first time, corruption is being honestly combated,” said Gilson Caroni Filho, a sociologist at the Hélio Alonso Institute, Rio de Janeiro. “The Brazilian government has been moving forward meaningfully. But we must not have illusions, changes will be molecular and the reaction of those who are targeted will be strong.”

Others warn that without decisive action, the corruption cases may simply increase. “The main impact is still coming. Brazilians always expect that episodes like this are investigated and judged carefully. But there is a tradition in the political class to protect one another,” said João Trajano, a political scientist at Rio State University.

Few analysts expect change in the short term. Noéli Correia de Melo Sobrinho, a political scientist, said the main difference was in transparency. An old, hidden problem is coming the surface, but that does not necessarily mean it will be dealt with “There is a bigger freedom now to talk about these issues,” he said. “I believe Dilma’s government has the will to fight corruption, but that would go against lots of powerful people. Sometimes that’s the reason why corruption can’t be fought: it’s already in the system.”

The Mensalão scandal is not the only big corruption case to hit the headlines in recent weeks, with another raising questions over the probity of the very organisations supposed to be investigating crime.

Police investigator Wilton Tapajós Macedo was killed last month while watering the flowers on his parents’ grave. At close range, two bullets were enough. One went through the temple, the other through the throat.

As his body lay on the ground near where he would later be buried, an undertaker witnessed two killers fleeing the scene. They left behind not just a corpse but a fear that the battle against corruption in Brazil may be entering a dangerous new phase as rival law enforcement agencies fight one another.

Tapajós was investigating the head of an illegal gambling cartel, Carlinos Cachoeira – also known as Charlie Waterfall – and his sprawling web of influence.

The corruption scandal has toppled a senator, disrupted renovation of stadiums for the World Cup and prompted the resignations of judges and prosecutors who said they were threatened and obstructed by police.

No one has been arrested in connection with the killing and detectives stress that the motive remains unclear, but the public prosecutor, Daniel de Resende Salgado, said military police – who operate on a regional rather than national level – had obstructed Tapajós and other federal agents as they attempted to look into the gambling activities run by Cachoeira during the investigation known as Operation Monte Carlo.

“During fieldwork, Tapajós was once intercepted by a military police officer, who may have been protecting the gamblers,” Salgado said. “We are aware of potential infiltration by criminal groups in government sectors. It is an even greater concern when they infiltrate public security organisations. If people who are supposed to fight crime associate with it, how can others react? Society and government are very vulnerable when that happens.”

This followed the resignation from the case by a judge, Paulo Augusto Moreva Lina, who said his family had been threatened by police in Goiás — the regional base of Cachoeira’s operation. A public prosecutor, Léa Batista de Souza, also quit after receiving a message saying: “Bitch, we will get you.”

“I can’t affirm Cachoeira ordered these threats, but I am sure these emails were because of the discomfort that Monte Carlo operation caused,” de Souza told the Guardian. “The operation shows that organised crime has infiltrated the state, especially public security.”

The effort to intimidate investigators – and the apparent involvement of military police – has prompted calls for Brazil’s justice ministry to declare an emergency. But it also shows that the inquiry has started to hurt some powerful vested interests.

A vast wire-tapping operation has revealed Cachoeira’s close ties to several influential politicians and businessmen. Demóstenes Torres – who had a reputation as one of Brazil’s cleanest politicians until this case – was only the second senator to be impeached since the dictatorship ended in 1985 after claims he took $1.7m (£1.1m) from Cachoeira.

Similarly shady ties also hit one of the country’s biggest construction firms, Delta – which was expelled from a project to renovate the Maracanã stadium for the 2014 World Cup. With Cachoeira now on trial, more cases are expected.

PHOTO: Among the accused is Jose Dirceu, chief of staff of former Brazilian president Luiz Inácio Lula da Silva. Photograph: Mauricio Lima/AFP/Getty Images

For more on this story go to:

Related story:

Mensalão Case Condemns 3 More

By Lucy Jordan The Rio Times

BRASÍLIA, BRAZIL – A majority in the Supreme Court has found three of the four mensalão defendants connected to the Banco Rural (Rural Bank) guilty of mismanagement of a financial institution, Agencia Brasil reported. The president of the court, Justice Carlos Ayres Britto, was the last to deliver his vote, condemning Katia Rabello, José Roberto Salgado and Vinícius Samarane, all former directors of the bank.

Ayanna Tenorio, the fourth of the Banco Rural defendants, was acquitted by nine votes to one. Samarane received eight votes for and two against conviction, for having covered up irregularities in financial reports.

Rabello, chief shareholder and former president of the bank and Salgado, a former vice-president, were convicted unanimously.

The Banco Rural defendants are four of 37 accused in the huge corruption case known as the mensalão, or big monthly payment, in reference to the bribes that some coalition members allegedly received to ensure their support for the PT.

Globo calculated the amount of money allegedly siphoned off may be as much as R$100 million.

The bank is accused of giving the Partido dos Trabalhadores (Workers’ Party, PT) preferential treatment, including the authorization of loans without guarantees. Mismanagement is categorized as a law of crimes against the financial system and can result in a prison sentence of between three and twelve years.

So far in the mensalão trial, eight of the 37 defendants have been found guilty by a majority; three within the Banco Rural and five regarding the misuse of public resources.

Ministers are able to change their votes up until the final result is announced at the end of the trial.

For more on this story go to:

UPDATE: The Caymanian Compass has reported on a lawsuit that has uncovered a link to the above “Corruption trial of the century” story.

“A former Brazilian banker, who is serving a 16-year prison sentence in her home country for conspiracy to commit crime, money laundering, tax evasion and mismanagement, is suing law firm Walkers in the Cayman Islands,” the Compass story says. “Ms. Rabello is a plaintiff in the case, together with Cayman-registered firms Arnage Holdings Ltd., Brooklands Holdings Ltd., and East Farthing Holdings Ltd., and Fernando Toledo, a former representative of Cayman-based Trade Link Bank.”

In a writ filed in the Grand Court on Feb. 4, the plaintiffs say they engaged Walkers as their attorneys from 1985 to 2010. They claim that Walkers had failed to carry out conflict of interest searches before the firm acted for “a new client with interests directly adverse to the plaintiffs.”

PHOTO: Katia Rabello From Offshore Edge (


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