Crime and Impunity

Many in Brazil felt impunity had taken a major hit back in 1992,
when President Fernando Collor de Mello was forced out of office.
Unfortunately, since Collor, far too many cases
have managed to escape unpunished.

Adhemar Altieri

A series of major tests for one of Brazil's key institutions is unfolding. It involves situations Brazilians have seen come and go many times over the years, with predictable results: high-ranking public officials or prominent members of society are exposed for multi-figure backroom embezzlement, the ugly deeds are investigated and described in detail by prosecutors and the media, an outcry follows… but seldom does it all lead to a fitting finale. Something is always missing for the guilty to be confirmed, and invariably it all wraps up with another chapter added to Brazil's lengthy history of impunity. The institution in the spotlight, quite appropriately, is the Judiciary.

Three specific cases have the potential to mark a new beginning, a real change in this undesirable routine for any nation wishing to call itself democratic. On the flipside, if none of these cases result in proper punishment, they will surely contribute to reaffirm the sad reality Brazilians have grown uncomfortably accustomed to. A more dangerous consequence will be the message that yet another round of impunity may deliver: that a "free for all" mentality, which many claim already exists at some levels, is now somehow official—if the law can't reach certain people, no matter how blatant and obvious their misdeeds, why should anyone need to bother with the law at all…

The first ongoing case, and the one drawing the most attention because of its sheer magnitude, hits the Judiciary directly. It involves former Labor Court Judge Nicolau dos Santos Neto, accused of masterminding one of the biggest single acts of corruption ever made public in Brazil: the misappropriation of about $93 million earmarked for construction of a new Labor Courts building in São Paulo. The case has already led to the first-ever expulsion from the Brazilian Senate. Wealthy Brasília entrepreneur Luiz Estevão was ditched by his peers, and stands accused of being the actual owner of the construction company in charge of the ill-fated court-building project. On paper, the company is supposedly owned by two "front men"—both were jailed and released on bail.

The case has become something of a joke because Judge Nicolau has been on the run from police since April of this year. His wife disappeared soon after that. Brazil's Federal Police, the equivalent of the FBI in the U.S., is questioned frequently because of its inability to find a runaway 72-year-old retiree. Pressure for results led to the November 16 dismissal of the force's regional chief in São Paulo, Yokio Oshiro, but what happened to him next left the impression he wasn't exactly punished: Oshiro was assigned to be the new Security Attaché at Brazil's Embassy in Buenos Aires.

The head of the force, Agílio Monteiro Filho, actually uses the FBI to fight off questions about the feds' commitment to arresting the former Judge: "runaway criminals are not exclusive to Brazil, and even the FBI can't capture all its fugitives", he says. It's important to note that Brazil's Federal Police answers directly to the Justice Ministry.

In the past weeks, new documents produced by prosecutors have strengthened the case against Judge Nicolau and former Senator Luiz Estevão. Much of the new evidence surfaced in the United States, and indicates that at least three bank accounts—two in Miami and one in New York, reportedly belonging to Estevão and his wife—were used to siphon money from the courthouse project in Brazil to Judge Nicolau's account in Switzerland. Police surveillance of Estevão has now been increased because of fears he might try to leave the country. The new evidence is reported to be sufficient for a second arrest order to be issued at any moment against the former Senator. His lawyers freed him of the first one in less than 24 hours.

On November 18, several media outlets reported Nicolau was ready to turn himself in. According to his lawyer, he demanded that he not be "publicly humiliated or exhibited as a trophy by police". President Fernando Henrique Cardoso, in Panama at the time to attend the Ibero-American Summit, answered back: "certainly there is to be no deal. Someone being pursued for misappropriation of public funds must simply be arrested. Whether he is found, or turns himself in, is a mere detail." The President should chat with his good friend, Justice Minister José Gregori, who admitted on the same day to having met with Nicolau's lawyer, but insisted no negotiations took place…

The second ongoing case that popped up in the media again in recent days involves former banker Salvatore Cacciola, another runaway charged with fraud and misuse of public funds. Cacciola was actually arrested, in connection with a highly questionable 1999 bailout with public funds supplied to his investment bank, Banco Marka. The arrest was seen with enthusiasm: could it be, at last, that impunity is finally in check? But the letdown came quickly, when a Federal Court judge agreed to let him await trial in freedom. New evidence surfaced shortly after and a new arrest order was issued, but Cacciola had already left Brazil by car to Buenos Aires, and flown to his native Italy.

Cacciola had not been heard from for months, until Brazil's TV Globo located him and aired a story on November 16 about his current routine in Rome. He is said to be spending most of his time in a small apartment surfing the Internet, awaiting a decision by the Italian Judiciary on Brazil's request for his extradition. Because Cacciola holds Brazilian and Italian citizenship, bringing him back to face the music in Brazil is expected to be a difficult negotiation. Cacciola may have hinted that he doesn't expect to be sent back, when he told TV Globo he is planning to move to the outskirts of Rome in December, with his family.

The third situation drives a long, jagged nail into the heart of what is the first love of most Brazilians. The game of football—soccer for our American readers—is being exposed for what most in Brazil have always known or suspected it to be behind the scenes: a cauldron of corrupt activity, with clubs and federations used as power bases by mostly unscrupulous politicians, often with the knowledge, cooperation and involvement of coaches and star players admired around the world for their artistry on the field.

Two parliamentary inquiries into football have been launched—one at the Lower House of Congress, the other at the Senate. At first, both were nearly laughed off as pointless investigations, since so many team and league bosses are also elected officials, who have found a way to be directly involved in both inquiries. Nobody seriously expected them to investigate themselves. But it now seems that with two investigations happening simultaneously, a bit of a race between them is taking place, to see which is able to uncover more than the other, and thus appear to be the "serious" one before the public.

While installing these parliamentary inquiries appeared frivolous at first, with many analysts saying Congress surely had more important matters to look into, the facts prove otherwise. For example, studies have shown that Brazilian football ought to be comparable, in terms of its financial strength and ability to retain top players, to that of Spain—one of the better leagues in Europe. Instead, what Brazilians have witnessed over the past few years is the early departure of just about any player that shows some promise, and not always to top leagues elsewhere in the world. In effect, Brazil has become little more than a player supplier, to countries that couldn't dream of ever accomplishing what Brazil has already done on the world football scene. Kind of like the NBA losing its top players to German or Mexican clubs…

Even worse is the spurious way in which these player transfers are carried out. Common features include transaction fees always much lower than those involving players of similar caliber elsewhere in the world, and Brazilian players often re-transferring soon after leaving Brazil. But the amount of that second transfer is always substantially higher—amazing how quickly those Brazilian players increase in value once they're playing elsewhere! What nearly every Brazilian football fan suspects is that most player deals that take stars away to other countries are done mainly under the table. The small transfer fee officially announced is what was put on paper. The "difference" can usually be pinned down when the same player transfers again, for a far more substantial figure.

What it all means is that Brazilian football is being filched relentlessly, because the people who run it are very willing participants, corrupt to a point where even the staunchest football fan in Brazil at times wonders how it was possible for this country to accomplish everything that it did, and establish itself as a world football power over so many years. Football, which has obvious potential to be a healthy, prosperous enterprise in Brazil, generating jobs, economic activity, entertainment and a positive image, currently does all of the opposite: clubs are mostly broke, the best players are gone, crowds are dwindling even for matches between the most traditional clubs, and the quality of matches is nondescript. One of the parliamentary inquiries into football has summoned the transfer documents for thousands of players dealt to other countries over the past eight years—these will now be crosschecked with Central Bank records about each transfer. Plenty should surface from that exercise alone.

Of course, there is also the matter of a multi-million dollar sponsorship contract between sports equipment manufacturer Nike and the Brazilian National Soccer Federation, around which numerous accusations have been made. These range from payoffs to league bosses, to interference by Nike at the 1998 World Cup Final, in which Brazil was defeated by France 3-1. Specifically, Nike is accused of forcing the Brazilian side to field its star striker Ronaldinho—a Nike-sponsored athlete—who had suffered what has been described as something of a nervous breakdown hours before the big match. Ronaldinho played terribly in Brazil's losing effort…

Many in Brazil felt impunity had taken a major hit back in 1992, when President Fernando Collor de Mello, swamped by evidence and accusations of corruption _ even from his own brother _ left office to avoid impeachment. His political rights were taken away for eight years nevertheless, a moment savored by many in Brazil who felt personally responsible for what took place, such was the wave of discontentment that hit the streets and dominated the media. The full force of that civic effort was felt all the way at the top of the power structure, and a President was forced out of power—no coup, no messing with the institutions: everything done by the book. Unfortunately, since Collor, far too many cases have managed to escape unpunished.

To be fair, Brazil's federal legislative—probably because it comes under public and media scrutiny much more easily and directly—has indeed reacted and come a long way in dealing with impunity. Several expulsions have taken place, and even a pair of arrests. There is also far more awareness of wrongdoing in Brazil nowadays, far less tolerance for it from society, and even less from an at times hyperactive media when it comes to sniffing out scandals. Most of this, however, does not apply to the Brazilian Judiciary, which continues to carry on in ways that defy reason, and lead to rather unflattering conclusions about those whose main concern should be upholding the law.

The three cases mentioned here are special because they are so typical, involving high-profile people, large amounts, plenty of media coverage and multiple, serious, damning details exposed. Whether it be Judge Nicolau turning himself in, banker Cacciola sent back to face trial, or big name football players, coaches and bosses eventually indicted over what the inquiries uncover, Brazil's Judiciary is going to get several cracks at very high-profile, heavily exposed and documented situations. Major opportunities to show that it too has had enough, and wants to turn the page on impunity, this most negative chapter of Brazil's contemporary history.

Adhemar Altieri is a veteran with major news outlets in Brazil, Canada and the United States. He holds a Master's Degree in Journalism from Northwestern University in Evanston, Illinois, and spent ten years with CBS News reporting from Canada and Brazil. Altieri is a member of the Virtual Intelligence Community, formed by The Greenfield Consulting Group to identify future trends for Latin America. He is also the editor of InfoBrazil - http://www.infobrazil.com, an English-language weekly e-zine with analysis and opinions on Brazilian politics and economy. You can reach the author at editors@infobrazil.com

Send your
comments to
Brazzil