World Goes to the Polls in Brazil

At the 2016 Summer Olympics in Rio de Janeiro, a reporter went up into the hills to interview young boys flying kites. A translator conveyed the false notion that people living in the crowded makeshift homes above Rio preferred their friendly communities to the lonely confines of the modern homes in the city below. Those flying the kites told a different story. They saw the kites as a symbol of their dreams to escape.

     By a margin of 55% to 45%, Jair Bolsonaro was elected Brazil's new President on October 28, 2018. His concern for money laundering, financing of terrorist groups, and other suspicious transactions in Brazil led to granting more power to the country's Financial Activities Control Council (COAF). Promoted as a way to speed investigations and integrate the functions of various government agencies, others view this bureaucratic reorganization as a threat to traditional guarantees of bank and financial secrecy.

     Brazil's most popular politician was not running in the first round of voting for president on Sunday, October 7, 2018. An independent judiciary found Luis Inacio Lula da Silva, Brazil's president from 2003 to 2010, guilty of corruption and sentenced him to prison. Like others in Brazil's political elite, Lula, as he is known, was charged with taking bribes from construction companies looking for contracts from Brazil's state-controlled Petrobras oil company. Since the Odebrecht construction company was not satisfied only to bribe itself into Brazil's political process, the world has an opportunity to prosecute its corrupt tentacles in at least ten Latin American countries, the United States, and Switzerland. (See the latest news about Odebrecht's bribery case in Colombia in the post, "Cut Off the Head and the Colombia Snake Dies?") In the United States, Petrobras itself, which trades in the US market, was fined $853 million for corruption under the Foreign Corrupt Practices Act.

       Fernando Haddad, the former Sao Paulo mayor with degrees in economics, law, and philosophy, represented Lula's Workers Party (PT) in the first round voting of the presidential election. The PT, which once brought prosperity to Brazil under Lula from 2003 ti 2011, gave way to the mismanaged economy, recession, and bribery of his successors: Dilma Rousseff, who was impeached for hiding the country's budget deficit, and Michel Temer, who fought a charge of corruption . Haddad is tainted with his association to PT's past sins and a suspected willingness to end an investigation into corruption.

      The Brazilian rainforest, considered the world's lungs for its ability to absorb carbon dioxide and combat rising temperatures, drought, and fires, is endangered by Jair Bolsonaro, a former army captain who belonged to nine different political parties during his 28-year congressional career. As expected, Bolsonaro and Haddad met again in the second round of voting. In the first round,  Bolsonaro nearly won half the vote needed to avoid a runoff

     Bolsonaro is the hero of Brazil's soybean farmers and cattle ranchers, because he would withdraw Brazil from the Paris Climate Accord and open the way to finance unlimited deforestation of the rainforest. With his running mate, General Hamilton Mourao, he shares an authoritarian approach to reversing the effects of Brazil's lingering 2014 recession: unemployment, reduced personal income, and a lack of education, health, and other government services. It also should be noted, Brazil's National Museum of historic treasures, housed in a once beautiful Portuguese palace, burned down on September 2, 2018, despite warnings about a lack of maintenance. Mourao claims the army has the ability to solve Brazil's problems, including drug-related violence, the way Brazil's military dictatorship did from 1964 to 1985.

     Bolsonaro's supporters like his outspoken attacks on indigenous rainforest communities, women, blacks, and homosexuals. During the first round of voting, Bolsonaro was in the hospital while recovering from being stabbed in the stomach at a campaign event. He claims to be Brazil's President Trump, when one is more than enough for the world.

     Brazil, once one of the promising emerging markets known collectively as the BRICs (Brazil, Russia, India, and China), has fallen on hard times, but the country is too important for the world to ignore. There will be as many as 30 different political parties in Brazil's new congress. The Brazilian Democratic Movement (MDB) that dominates congressional coalitions has to deal with members used to receiving pay-offs in jobs, funds for pet projects, and graft in return for passing necessary reforms.

     The world's multinational corporations are in a position to exploit Brazil's political, economic, and social woes or to dream up win-win solutions for their stockholders and the country's kite flyers.

     Local farmers complain that the Brazilian Agricultural Research Corporation (Embrapa) that developed maize, soybeans, eucalyptus trees, and zebu cattle to thrive in the tropical heat and acidic soils on the savanna that covers 5% of Brazil's farmland no longer helps them. Biotechnology, now in the hands of Bayer, which just acquired Monsanto, and Syngenta, a Swiss pesticide producer, serves their agribusiness interests. Meanwhile, Munduruku tribe members, who formed the COOPAVAM cooperative, watch farms press toward the patch of forest where they harvest the wild Brazil nuts they press into oil for eco-friendly Natura cosmetics and school lunch food. At the very least, multinationals could abide by government regulations requiring only 20% of forest areas should be cleared for farming.

     Boeing is in a position to honor or undercut the interests of Brazil's Embraer aircraft company employees and its metalworkers union. Young engineers are used to moving from projects on commercial aircraft to executive jets to defense projects. Since Boeing is only interested in acquiring the company's short-range, 70- to 130-seat commercial jet business in order to compete with Canada's Bombardier, Inc. and Airbus, excess employees rightly fear they would lose their jobs. Couldn't Boeing's worldwide operations offer them employment elsewhere?

     All in all, Brazil's presidential election is a world, not just a national, event worth watching.
   

Cut Off the Head and the Colombian Snake Dies?

 In fact, eliminating the head of a drug cartel can spawn a host of little drug organizations, Jack Devine wrote in his book, Good Hunting. What happened after Osama bin Laden, Saddam Hussein, and Qaddafi were eliminated? What have those who watched the TV version of the successful hunt and death of Pablo Escobar, Colombia's notorious drug lord, witnessed after Colombia's June 17 election? The 2,000-member National Liberation Army (ELN), though smaller than FARC's once 18,000 guerrillas, is demonstrating the challenge separate dedicated cells can present.

During 50 years that resulted in 220,000 deaths, the Marxist Revolutionary Armed Forces of  (FARC) used drugs to finance efforts to overthrow the Colombian government. Coca cultivation for the cocaine trade continues to grow, reaching a new high in 2018 with a 17% increase over 2017. Security forces have failed to stop the violence occurring in former FARC areas where cocaine production continues on the Colombian border.

 President Juan Manuel Santos, who won a Nobel Peace Prize for the 2016 peace accord he negotiated with FARC, could not run for another term. Two potential presidential successors emerged from the May 27 primary this year:
     Ivan Duque, the conservative Democratic Central party candidate mentored by Alvaro Uribe, a     major critic of the Santos peace accord and Colombia's former conservative, authoritarian president, who is now accused of accepting a bribe (a charge he denies) from right wing paramilitary groups,
                                                                 ans
     Gustavo Petro, a pro-peace former guerrilla member and former mayor of Bogota who also           opposed President Santos.

Duque won with 45% of the vote and will take office as President on August 7. Petro may not be the only loser. When FARC controlled as much as 40% of the country, a diverse variety of species was untouched in this wide tropical area. Under Santos, scientists working on the "Colombia BIO" project began a comprehensive systematic survey in the former FARC territory with the idea of transforming biological assets into economic benefits, such as the eco-tourism Chile and Argentina plan to attract with their national park systems featuring biodiversity.  How important the new regime considers funding for "Colombia BIO" is unknown.

What is known is fragmented FARC and ELN guerrilla groups, as well as paramilitary forces, continue to fight for control of the coca fields still being cultivated to supply the demand for cocaine in the US and elsewhere. Infrastructure needed to switch to legal crops and approved funding for former FARC members to set up co-ops have not materialized 

ELN members live without uniforms in towns and villages as civilians who infiltrate political parties, local governments, progressive social movements, and universities. A 5-man central command, headed by Jaime Galvis, that uses encrypted computers to direct attacks has never engaged in serious peace talks.

Despite the problem of even getting ELN to a negotiating table, Duque's supporters continue to consider peace treaty terms with FARC too lenient. His congressional leader, Ernesto Macias, rejects the peace accord's provision that imposes no prison time on disarmed FARC leaders who agree to confess their crimes to a special tribunal based on the model South Africa used after apartheid. Ten non-voting members of FARC; including Sandra Ramirez, the lover of FARC's founder, Manuel Marulanda, now hold seats in Congress. Duque, who studied at Georgetown and worked for the Inter-American Development Bank in Washington, D.C., won election on a vague  plan to foster entrepreneurship, talent, and knowledge that had more appeal to voters than Petro's idea about replacing oil, the country's major export, with a green economy based on agribusiness. Duque needs the cooperation of Macias to pass legislation to reform Colombia's pension system by raising the retirement age, to improve court efficiency, and to reduce corporate taxes.

     In September, 2018, a referendum on seven measures designed to stem corruption was defeated, when only a third of the voters needed to pass it went to the polls. The death of Jorge Enrique Pizano in his home, apparently from cyanide poisoning in November, 2018, finds Colombia involved in one of the Odebrecht bribery cases spilling over from Brazil. Partners, the Odebrecht construction firm and the Grupo Aval financial group owned by Colombia's Luis Carlos Sarmiento, won a $1.6 billion contract to build Ruta del Sol, a road connecting Bogota with the Caribbean beaches. A Grupo Aval auditor, the deceased Mr. Pizano , had discovered $30 million of the $1.6 billion contract was paid for what were listed as consultancies that could have been a cover for what were, at least in part, political bribes. Grupo Aval and Nestor Humberto Martinez, Grupo Aval's attorney, denied prior knowledge about $11 million in bribes Odebrecht admitted to the U.S. Department of Justice it paid to obtain the Ruta del Sol contract. Yet in early 2018, Mr. Pizano had given the Noticias Uno TV program recordings of his secret conversations with Mr. Martinez about the consultancy payments. Mr. Martinez, who is now Colombia's Attorney General, has recused himself from all cases, including Mr. Pizano's death, relating to the Ruta del Sol contract. Public pressure urges his resignation. 

Colombia has seen an influx of as many as 1.5 million immigrants fleeing dire political and economic conditions in neighboring Venezuela. Work permits, health benefits, and study opportunities have been provided for at least 442,000 as a return favor for the hospitality Venezuela offered those fleeing FARC's reign of terror. To cover Colombia's growing need for revenue, Duque considered expanding the value-added-tax to include staples, including some foods, that are now excluded, but Duque is likely to find his approval rating drop the way Santos' did to 14%, when he raised taxes. In fact, Duque's approval rating in November already is half the 54% it was a month after he took office.


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Warning to Students: Don't Cheat

Children who are motivated to cheat by copying another student's work, paying someone to write their papers, or hiring another student to take a standardized test for them could learn a few lessons from those who have avoided corruption or engaged in it around the world.

Even if the current business culture in a country sanctions corruption, the honesty espoused by Bulent Celebi's AirTies firm in Turkey offers a promising example. When Celebi established his WiFi company, which does not rely on phone lines or fiber optic cables to transmit data, he had six founding values. Besides customer satisfaction and engaged employees, he stated AirTies would be ethical. Therefore, he did not rely on bribes but, according to Elmira Bayrasli's book, From the Other Side of the World, he launched his business by working through the laborious process of dealing with Turkey's bureaucracy and paperwork. Shortcuts, he felt, would start AirTies off in the wrong direction.

     While on a visit to Nairobi, Kenya, in November, 2015, Pope Francis told a cheering crowd that corruption was easy and sweet but in the end it makes politics, even in the Vatican, and a country sick. He urged the crowd to keep corruption out of its lives, because corruption takes away joy and robs people of peace in their lives.

     Major European auto and truck maker, VW, will pay at least $15 billion for developing a cheating way to pass emissions tests.

     As a result of bribing doctors and hospitals by giving them kickbacks, the Japanese-based manufacturer, Olympus, paid a $646 million fine.

     By pretending subprime mortgages were sound, Goldman Sachs, one of the US firms that helped bring on the 2008 recession, is expected to pay about $5 billion to resolve state and federal investigations.

     In Brazil, President Dilma Rousseff and House Speaker Eduardo Cunha have been implicated in a corruption scandal involving construction firms that paid bribes to Petrobras, the state energy firm. Marcelo Odebrecht, former head of Brazil's giant construction company, designed the scheme that paid kickbacks to win contracts from senior Petrobras officials and that funded political campaigns. In March, 2016, Odebrecht was sentenced to 19 years in prison. Although Rousseff thus far has been found blameless in the Petrobras scandal, the charge of her involvement has led to a call for her impeachment and hurt the country's economy by stopping building and energy projects. Petrobras has had to stop paying dividends, and the company has cut $32 billion from its 5-year $130 billion investment plan. Now that the Federal Accounts Court has ruled that Rousseff's administration used illegal accounting practices, the prospect of impeachment is even greater. Eventually, Rousseff was out, but in June, 2017, new President Michel Temer was charged with taking $11.5 million in bribes for helping a meatpacker who had tax and loan problems.

     Sigmundur David Gunnlaugsson, Iceland's Prime Minister, was the first victim of a leak of papers from the Panamanian law firm, Mossack Fonseca. In April, 2016, he stepped down, when it was disclosed that he and his wife owned an undeclared off shore account where he concealed millions of dollars from taxes. The papers reveal Mossack Fonseca also has formed off shore shell companies to help other clients launder money, dodge sanctions, and evade taxes.

     Nigerian authorities fined the South African-based MTN multinational mobile telecommunications company $5.2 billion, later reduced to $3.4 billion. Of MTN's 62 million subscribers, the company failed to disconnect 5.1 million unregistered, and therefore unidentified, Sim card accounts. Kidnappers had used an unregistered Sim card from MTN to demand a ransom for Nigeria's former finance minister, Chief Olu Falae.

     A November, 2015 report from the World Anti Doping Agency alleging State-sponsored doping of Russia's Olympic athletes could result in banning the country from competing in 2016's Summer Olympics. And the head of the agency that selects the countries that hold World Cup soccer matches had to resign, when winning host countries were found to have bribed their way into the honor.

     In Indonesia, the government's failure to keep an up-to-date land registry results in an inability to assign blame for the devastating forest fires on the islands of Sumatra and Borneo that also have spread a thick haze of smoke to Malaysia, Singapore, and southern Thailand. All together, the smoke has caused an estimated 500,000 respiratory tract infections, and 100,000 premature deaths are a possibility. Fires are set by cheap slash and burn methods used to clear for new planting by both small scale farmers and corporate palm oil, timber (used for paper), and other agricultural corporations. Standards for the hiring and working conditions of migrant labor in the palm oil industry have failed to remedy abuses. When an investigation by the Roundtable on Sustainable Palm Oil found the Malaysian palm oil company, IOI, failed to correct deforestation violations in its concessions, Unilever and 9 other major companies cancelled their contracts with IOI.

     You can read about charges of corruption Russia faces in the earlier blog post, "Hearing Voices." And Communist Party officials throughout China have been severely punished as reported in the earlier blog post, "China's Corruption Crackdown, New Bank Backing, and Release of PR Activists."