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.

Published by

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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