Eletrobras paid R$ 400 million to American lobbyist linked to the Wilson Center

This photo is one of my favorites. From left to right: Paulo Sotero, director of the Brazil Institute and commentator for Globonews and CBN, Anthony Harrington, president of the Brazil Institute, president of the Board of Directors of Albright Stonebridge and ex-senior partner at the Hogan Lovells law firm,Jane Harman, president of the Wilson Center and adviser to the highest US intelligence services, Sergio Moro, mercenary for Globo and US agent, judge Peter Jo Messitte, a mediocre person with no biography, who the Wilson Center hired to participate in all the Brazil Institute seminars, and it was he that keeps repeating praises to Brazilian “democracy”, especially the judiciary, and… Joaquim Levy, the neoliberal who Dilma nominated to the Ministry of Finance, pressured by the “market”.

By Miguel do Rosario

The article in the magazine Época reproduced below is superficial, denouncing excessive spending by Eletrobras of more than US$ 127 million with a US firm called Hogan Lovells. The most important thing is left out: Hogan Lovells is listed as one of the principal firms specialized in lobbying in the United States, with many clients in the oil and gas, mining, energy and aviation sectors.

Lawyers at Lovells provide legal and lobbying services regularly to giants such as Exxon Mobil, the largest oil company in the world. Lovells also works for nuclear power companies such as Lightbridge.

Hogan Lovells was contracted by Eletrobras to investigate our nuclear program, among other things.

However, there is an even more interesting point in this story – and which also was not touched on in the article in Época: Anthony S. Harrington, president of the Brazil Institute, a body belonging to the Wilson Center, is an ex-senior legal partner at Hogan Lovells. His daughter, Michele S. Harrington, still works there.

Harrington, ambassador to Brazil from 1999 to 2001, is a distinguished member of the US intelligence community, having been an advisor to the White House in this area. This information is on the site of the Wilson Center.

Harrington is now president of the Board of Directors of Albright Stonebridge, another powerful lobbying firm specializing in “international strategies”. The company slogan is “unlocking global markets”. On their site, she explains that one of their specialties is doing “business with foreign governments”, and that “if there are improper governmental procedures, she can help to find the best course of action and the most effective means for correcting them”.

An article on the Huffington Post in July 2016 also showed the obscure links between the White House through the then Secretary of State, Hillary Clinton and Albright Stonebridge on the question of … oil. According to the Huffington, Stonebridge, which has important investments in companies exploring the so-called “schist oil”, and was on a committee of the Democratic Party which analyzed environmental impacts of this type of activity.

Most of the directors of Stonebridge hold important posts in the White House, including in the intelligence sectors…

Albright Stonebridge and Hogan Lovells have many connections between each other. On Wikipedia itself, there is information about the partnership between the two firms. Several of their executives have worked or still work in both.

We call the Wilson Center here at Cafezinho the “CIA think tank” because of the relationship with the White House intelligence community, and due to entirely controlled by the US government, who pays their bills, providing them with their headquarters (in the Ronald Reagan Building), and indicating their directors.

The Wilson Center has organized, ever since the mensalão scandal, seminars to discuss judicial operations underway in Brazil, inviting Supreme Court Justices, lower court judges such as Sergio Moro for example, Attorney-General Janot and judges from the Justice Department. The line of these seminars was always to support judicial operation. During the Car Wash operation (Lava Jato), various seminars of this kind were held at the Wilson Center at which representatives from the Wilson Center stated that Brazilian democracy was a “model for the world”.

Lastly, what a marvelous tidbit: according to this report from CNN, the new US President, Donald Trump, hired the ex-Federal prosecutor Ty Cobb as his “special adviser”. Cobb is also a partner in… Hogan Lovells.

A quick search through the Wikileaks database shows that Lovells is one of the lobbying firms closest to the White House and especially the US intelligence community.

Below are some photos of the authorities who have passed through the Wilson Center recently.

Many indications have led me to believe that the Wilson Center was one of the organizers of the coup in Brazil.

(Carmen Lucia, current Supreme Court presiding judge at the side of Anthony Harrington, ex-Lovells).

***

From Epoca

Eletrobras hired US investigators for US$ 128 million into corruption

Who investigates the investigator? State company spends millions to trace losses from irregularities and seeks services from a company used to whip up Operation Car Wash

VINICIUS SASSINE
01/26/2018 – 19:09 – Updated 01/26/2018 19:22

In one of those bureaucratic communiqués to the market companies are obliged to make, one among dozens issued in 2017, Eletrobras informed shareholders about a contract with a US law firm specialized in corporate investigation of corruption and accounting fraud, called Hogan Lovells. But the text of December 7th was different from the others: it was longer, was in greater detail and was even more transparent.

The investors, however, were not made aware in the 15 topics of the State company’s decision to increase the amount of the contract, nor of the exact amount to be paid to companies specialized in private espionage services, including the controversial Kroll. Eletrobras, a nationalized company in the electrical sector and the largest one of this kind in Latin America, misrepresented the amounts paid to Kroll, to Control Risks and to large Brazilian legal firms, all subcontracted by Hogan Lovells.

EPOCA obtained two contracts signed between Eletrobras and Hogan Lovells and two supplements readjusting the initial values, terms and payments. The amount given there for Kroll from January 2016: firstly R$ 36.2 million and in a supplement a further R$ 9 million, totaling R$ 45.2 million. The same occurred with Control Risks, a competitor of Kroll: R$ 35.8 million, with a later increase of R$ 8.9 million, totaling R$ 44.7 million. Large Brazilian legal firms, WFaria, Pinheiro Neto and Torres Falavigna pocketed a further R$ 47.3 million.

The Eletrobras communiqué allocated all this to the Hogan Lovells account and also informed smaller numbers of those paid to subcontractors. Kroll is attributed Just R$ 13.4 million and the Brazilian legal firms are not even detailed. The state company recognized the mistake and said it will “reclassify” the amounts so as to “better demonstrate” the expenses, although without altering the total amount.

The partnership between Eletrobras and Hogan Lovells was established in mid-2015, when the state company was in a terrible situation. Operation Car Wash uncovered the first point of corruption outside of Petrobras, more specifically at Eletronuclear, the subsidiary responsible for the construction of the nuclear power station Angra 3. The accumulated loss to Eletrobras hit R$ 30 billion in all since 2012, and the indebtedness put at risk their capacity to honor their commitments.

The company then decided to sign a contract to investigate practices of corruption in their ventures as a way of showing the market transparency and performance, to avoid further losses in the future. The initial value of the services, R$ 6.4 million, was inoffensive. But later there were the readjustments, in the way of business in the public sector. Eletrobras signed a new contract, 2.956% greater with Hogan Lovells, and also made a supplement to this contract without giving any explanation to the market and hid the fact of the spending with Kroll and other subcontractors.

Thus, the agreement with the legal firm jumped from the initial R$ 6.4 million to R$ 235.5 million. But it did not stop there. New expenses were incurred, and by September of last year the total cost of the internal investigation had reached R$ 340 million – including the honoraria for the members of the Independent Investigation Management Commission set up to supervise the work by Hogan Lovells, which included the ex-president of the Brazilian Supreme Federal Court (STF) Ellen Gracie. At the end of December 2017, Eletrobras informed the signing of a new contract with the American law firm for R$ 42.8 million. The expenses of the internal investigation have thus come close to R$ 400 million.

The principal contract established that the state company would make payments directly to Kroll, to Control Risks, and the Brazilian law firms. The espionage services by Kroll have a controversial history in Brazil. In the years shortly after 2000, the company was accused of carrying out espionage in the dispute between Opportunity Bank and the pension funds. The most recent one involved an offensive from the then president of Congress, Eduardo Cunha (PMDB-RJ), to try and free himself from the Car Wash operation. The House Inquiry into Petrobras, controlled by him, contracted Kroll to investigate whether the informers had hidden assets abroad, as a way of trying to annul collaboration. In this way, Eduardo Cunha used Kroll to intimidate and obscure the investigation. There was secrecy imposed of five years in the contract, and the company received just over R$ 1 million for the services.

The contract between Eletrobras and Hogan Lovells did not detail the role of Kroll in the internal investigation. According to the state company, the purpose was to conduct interviews with staff, to map the management of procurement processes and investments, and to test transactions. But it is an open secret among investigators that the company specializes in tracing hidden bank accounts, property registered in tax havens and property abroad. Kroll in Brazil alleged “questions of confidentiality” for not responding to questions put by EPOCA, as did Control Risks and the legal firms Pinheiro Neto and WFaria. Hogan Lovells made no comment, nor did Torres Falavigna.

One of the supplements signed took into account a letter sent by Hogan Lovells to Eletrobras asking permission to “remanage the hours contracted between the ten projects included within the scope of the investigation”. According to the law firm, “some projects demand substantially more work than had been estimated in the commercial proposal compared with other projects where less hours were involved”. The supplement allowed the allocation of money between listed projects, provided the amount attributed to each subcontractor was maintained. Two months afterwards, a supplement readjusted the amounts and the periods for the services.

Spending on internal investigation has various objectives, including finding ways of avoiding that the diversion of monies is repeated, and even recovering lost money. The expenses on the internal investigation at Eletrobras were already almost 70% of what the company had made in profit in the third quarter of 2017, which was higher than the losses due to corruption for 2014 and 2015 registered by the company with the Securities and Exchange Commission (SEC), the regulatory capital markets body in the United States. The principal contract was terminated in June last year. Hogan Lovells required more money and the new contract to “close the investigation” could last through August. In spite of all the costs, no conclusion has been drawn since the corruption uncovered in Eletrobras and its ventures became public.

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).

 

Dilma on Venezuela: the coup happens in Brazil, not there!

Dilma’s interview for BBC helps to explain the coup in Brazil. The former Brazilian president has a vision totally different from Michel Temer’s on Venezuela crisis.

Dilma also talks about Brazilian current political situation, arguing that the coup is a “process” which is going on yet.

***

On BBC (on the original link there are 2 videos which we couldn’t embeb here. So watch them there)

Dilma Rousseff: Brazil ‘coup’ not over Continue reading Dilma on Venezuela: the coup happens in Brazil, not there!