Have American oil refineries sponsored the coup in Brazil?

(Luis Roberto Barroso, judge at Brazilian Supreme Court, speaking at the Wilson Center, on Sep 8th, 2017)

By Miguel do Rosario, Brazilian blogger (editor of Cafezinho)

“Atrás de um homem triste há sempre uma mulher feliz”, said an old song by Chico Buarque, one of the most popular Brazilian musicians in the last 30 years.

Behind a sad man there is always a happy woman.

Latest events in Latin America politics tells us we could change Buarque’s words to: behind a sad country there is always a happy oil refinery.

I spent the last few days researching the US and Brazilian governments’ official trading databases and I found something that can help answer the following question: who benefits from the never-ending Brazilian political crisis?

Whose’s financial interests are behind Operation Car Wash, that magnificent, illustrious and unrivaled battle against corruption?

In recent months, the Wilson Center, a respectable US public-private think-tank, brought several high ranking members of the Brazilian judiciary, such as supreme court judges, the former general prosecutor and the minister of justice to talk about topics related to Brazilian politics. In all these events, their American hosts, such as the Ambassador, Anthony Harrington and judge Peter Messitte, welcomed them by showering the Car Wash Operation with enthusiastic compliments, as did their Brazilian guests.

Luis Roberto Barroso, a supreme court judge, one of the panelists on September 8th this year, said that corruption is everywhere in Brazil.

“These people [I suppose Barroso meant corrupt people] have allies everywhere, in key positions, in the press, in government and in places we would least expect”.

Barroso also praised Sergio Moro, the local 1st instance judge responsible for the Operation Car Wash.

The Wilson Center is part of the Smithsonian Institution, whose board of private and government trustees is appointed by the president of the United States.

ExxonMobil Corporation, Shell, Marathon Oil Corporation and Black Rock are amongst its benefactors*.

According to Wikipedia,

The Center is a public-private partnership. Approximately one-third of the Center’s operating funds come annually from an appropriation from the U.S. government, and the Center itself is housed in a wing of the Ronald Reagan Building, a federal office building where the Center enjoys a 30-year rent-free lease. The remainder of the Center’s funding comes from foundations, grants and contracts, corporations, individuals, endowment income, and subscriptions.

What judge Barroso didn’t say

The Operation Car Wash has been accused by many Brazilian political analysts, law specialists and even other judges of violating the Constitution, human rights charters and even common sense, arresting politicians and high executives without proofs, based only on “conviction”. These persons stood for long periods in prison without being tried and could only dream of liberty after signing a plea bargain with prosecutors.

After three years of Operation, almost all the main Brazilian engineering companies, some with operations in dozens of countries, were heavily affected.

Millions of jobs were destroyed.

Operation Car Wash is also accused of deliberately acting to promote the impeachment of President Dilma Rousseff, or the coup, as many prefer to call it.

For example, judge Sergio Moro directly released secret audios to the corporate media in order to create a public commotion, as he did when Dilma Rousseff wanted to appoint Lula as her minister. On that occasion, Moro provided Globo, Brazil’s largest media company (and main supporter of Operation Car Wash) with illegal recordings of conversations between President Rousseff and former President Lula.

This was absolutely illegal, given that a local judged could never have issued orders against a sitting President, whose actions can only be examined by the supreme court.

Judge Moro, aware that he had committed a crime, apologized to the supreme court.

And apologies accepted, there were no further sanctions.

Moro appears in almost all events he is invited to. He gives frequent interviews and releases sensitive information about the people and companies accused by the prosecutors, always to the same media groups, using it as a weapon to destroy any chances defendants may have of being acquitted.

As he has explained in an article, his method consists in using the media and public opinion to strengthen the operation.

At the Wilson Center, Barroso, the Brazilian supreme court judge, claimed that “Corruption Will Not Prevail”.

Well, after three years of Operation Car Wash, I think Barroso’s prediction seems to be just an empty phrase.

Operation Car Wash can be held responsible for putting Michel Temer and his criminal gang in power. In fact we could even say that corruption did prevail.

Even abroad, eminent legal academics have their doubts over Operation Car Wash. The Italian professor Luigi Ferrajoli, accused Lava Jato of copying methods used during the Inquisition, while Eugenio Raul Zaffaroni, an Argentinian legal expert who was also a former judge of Argentina’s Supreme Court and a celebrated legal author accused Operation Car Wash of being part of a continental ploy to destroy progressive political parties, using new methods to reach the same goals of Operation Condor, a sinister conspiracy led by Latin American military governments to kill left-wing and liberal leaders.

In early August, Sergio Moro convicted former President Luis Inácio Lula da Silva to 9 years in prison on corruption charges. Some days later, over a hundred Brazilian legal experts wrote articles accusing Moro of convicting Lula without proofs. They were published in a book released on August 11th at the National Law College, in Rio de Janeiro, with the presence of hundreds of jurists, lawyers, prosecutors, law students and law academics. All the legal experts present argued that Moro’s decision was blatantly illegal.

The Lava Jato Operation resorts to methods that are very similar to torture. Defendants are held behind bars with no prospects of coming out or hope of a fair trial, unless they agree to plea bargains and to tell a story that matches the prosecutors’ narrative. Defendants who tell a different story will not be allowed to leave prison.

But if Operation Car Wash is a conspiracy, who is pulling the strings and who is profiting?

Well, watch this graph. It shows that after the coup, the new regime that took over in April 2016, determined that Brazilian refineries hit the brakes.

Some would say this is normal, considering that the Brazilian economy sunk to very low levels in the last two years.

Not exactly.

Since 2016, Brazilian imports of distilled fuel oil, which is the main fuel used for transporting cargo, were rapidly increasing. In the last 12 months, it hit historical records, at almost 9.5 million tons.

But there is something else that’s strange. Guess which corporations are increasing market share in Brazil?

Yes, the very same patrons of the Wilson Center that Brazilian judges so proudly like to attend: American oil corps.

US market share of Brazilian distilled fuel oil reached 84% in the last 12 months.

Consider this: historically, distilled fuel oil is the n. 1 product imported by Brazil. In the last 12 months, Brazil spent US$ 4.5 billion on it, 75% above the amount spent in the previous period.

Note that, in dollars, Brazil spent higher amounts in the past. In 2014, for instance, Brazilian imports of distilled fuel oil totalled almost US$ 8 billion. Nevertheless, as American exporters grabbed a bigger share of Brazilian purchases, their earnings hit a record levels in 2017: US$ 3.7 billion.

It’s worth a coup, isn’t it?

Let’s look at the big picture.

The American oil industry underwent a silent revolution in recent years. The United States became one of the main global oil exporters in the world. US oil trade deficit dropped sharply from almost $ 400 billion in 2008 to $ 70 billion in 2016.

Lower prices, higher domestic production, decreasing consumption and dramatic export growth resulted in the lowest oil trade deficit in decades.

2008 subprime’s crisis forced the US oil industry to alter their strategy. American oil consumption violently declined by more than 5% in 2008 and remaining weak for the following years.

Suddenly, US oil refineries had a rising volume of refined oil in their hands, which they could sell abroad.

Meanwhile, as we’ve seen above, Brazil, historically one of the most important refined oil markets for the US, also started to heavily invest in its own refineries. After discovering new oil reserves, Lula’s government decided that Brazil could increase its refining capacity.  Petrobras made huge investments: in the states of Maranhão, Pernambuco and Rio de Janeiro, the state-owned oil company began to build brand new refineries.

Oops, that posed a real problem!

If Brazil has its own refineries, why would it continue to import distilled fuel oil from America?

 

So now you can understand why American refineries and their sponsored think-tanks such as the Wilson Center, place so much hope on Operation Car Wash.

The traditional American weekly Time magazine listed Sergio Moro as one of the most powerful men in the world.

Bryan Walsh, Time’s international editor, wrote a short piece presenting Moro. Walsh seemed to be well aware of what was taking place in Brazil when he said that

Although she hasn’t been directly linked to any bribery, President Dilma Rousseff now faces impeachment in part because of Moro’s work.

Moro has been accused of ignoring due process, and he seems more than willing to try his cases in the court of public opinion. But most Brazilians feel that his sharp-elbowed tactics are worth the trade-off for a cleaner country.

In August 2015, judge Sergio Moro was one of the speakers in a seminar organized by Veja, an extreme-right weekly magazine, entirely dedicated to the cause of the impeachment.

In his speech, Moro argued that “Abreu e Lima”, a huge refinery built in the state of Pernambuco at the beginning of Lula’s first term, was an unnecessary investment and would never cover its costs.

What were his sources? Some of the defendants hoping to get plea bargains from him.

The impeachment, which if Walsh is to be believed, was “Sergio Moro’s work” brought a happy end to… the ever so clean and uncorrupt… American refineries.

In fact, even before the impeachment, Operation Car Wash had already frozen all construction and investments in the Brazilian oil sector. After the removal of Dilma Rousseff, the very first decision of the newly appointed Petrobras president was to put an end to the Brazilian dream of refining their own oil. New refinery projects were cancelled and domestic refining was abruptly reduced.

The decision meant a massive job destruction, as these construction building projects had been employing thousands of workers.

In May 2017, one year after the coup, the state of Rio de Janeiro saw its unemployment rate rise by 50%, to 1.2 million. In a year, an extra 401,000 people are without a job.

Meanwhile, thanks to Brazil, US oil corporations are experiencing some of their best moments.

Below is a list of the main US (or US based) oil corporations in refining sector, by capacity.

Sources:
Energy Information Agency  – EIA (US)
Alice System – Ministry of Industry (BR)

 

* some links to check this information: Link 1 (donors at 2015); Link 2 (benefactors).

 

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Miguel do Rosário

Miguel do Rosário is a Brazilian political blogger, who lives in Rio de Janeiro and writes in Portuguese on Cafezinho and in English on Slating News.

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1 Comment on "Have American oil refineries sponsored the coup in Brazil?"

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Rita Andreats
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Rita Andreats

This is the very truth in my viewpoint . Car wash operation is a complete farse and a shame

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