Category Archives: Current events

Leak shows Car Wash operation ‘Depends on the Americans’

Dallagnol messages

Car Wash Prosecutor Dallagnol and the message to Judge Moro revealing link to the US

247 12 June 2019

Car Wash prosecutor Deltan Dallagnol told Judge Moro that certain details of the operation would “depend on the articulation with the Americans”, in a further set of messages published this Wednesday (June 12) by the site The Intercept.

In the message published by the The Intercept Brasil, Moro complained that the operation could not be “stopped” too long”, to which Dallagnol responded – in a scandalous promiscuos and partisan relationship between the judge and the Prosecutor – saying they had to await the articulation with the Americans.

Read the excerpt of the messages published:

“Moro – 18:44:08 – Is it not too long without an operation?
Deltan – 20:05:32 – Yes, it is. The problem is that the operations are with the same people who are working on the charge against Lula. We decided to postpone everything until that charge is brought, except for the taccla  op because of the risk of leaking, but it depends on the articulation with the Americans
Deltan – 20:05:45 – (What is being done)
Deltan – 20:05:59 – We are scheduled to charge on the 14th
Moro – 20:53:39 – OK”

Odebrecht plea bargain also makes Federal Prosecution Service into a millionaire fund manager

Odebrecht
2 April 2019

By Pedro Canario

The plea bargain agreement Odebrecht signed with the Federal Prosecution Service in December 2016 is quite similar to agreement with Petrobras. Both provide for the setting up of a judicial account under the tutelage of the 13th Federal Court of Curitiba, with the money being at the disposal of the  FPS to do with it as they wish.

Odebrecht agreement with the FPS also allows Car Wash prosecutors to manage the fine paid by the engineering company.

In the Odebrecht case, the company undertook to pay $ 2.9 billion as a fine for their misdeeds, to be divided by the FPS amongst themselves, the U.S. Department of Justice (DOJ) and the Prosecutor-General of Switzerland. The part that is to remain in Brazil is to be under the charge of the Car Wash prosecutors in Curitiba.

According to the agreement, this money is to be for reparation of ” material and non- material damages” caused by the corruption at Odebrecht. According to the explanation given by the FPS in Parana to ConJur, 80% of the money will remain in Brazil, 10% with the USA and 10%, in Switzerland. Thus, the FPS will be responsible for managing R$ 6,8 billion.

Of that amount that is to remain in Brazil, 97.5% is to go to “public bodies, companies and foundations and mixed economy companies” damaged by the deeds of the engineering company. In other words, $ 1.71 billion is to be directed at the discretion of the FPS. The other 2.5% is to go to the Federal purse in compensation for having committed administrative impropriety.

The sharing out of the money is set forth in paragraph 3 of clause 7 of the agreement, according to which the “total amount is to go to the Federal Prosecution Service”. In response to questions from ConJur however, the FPS asserts that “the agreement does not give the resources to the Federal Prosecution Service nor place them under management by the Prosecution Service”. According to the official explanation, the money will be paid to the “victims”, wherever the FPS is responsible the administrative impropriety suit adheres to the FPS agreement.

Although the agreement is public and one of its clauses says that the money will be at the disposal of the FPS, its destination is described in a secret clause of the document, “Appendix 5”. This document was not published by the Prosecution Service and is being dealt with carefully by the 13th Federal Court of Curitiba, which was led by the now Minister of Justice Sergio Moro throughout Operation Car Wash. At least three times, Moro denied requests for access to this appendix under the argument that it could harm investigations underway.

The agreement with Odebrecht is dated December 2016 and is therefore older than the Petrobras one signed in September 2018 and published in January this year. But many of the elements that raise suspicions about the intentions of the Car Wash prosecutors and its anti-corruption crusade were already there — and have not been seen.

In the case of Petrobras, annexes of the agreement were published recently and revealed these intentions: the setting up of a foundation in which the money, $ 650 million, is to be directed at interventions to combat corruption. This fund is to be managed by the operation Car Wash prosecutors in Curitiba. Naturally, it will be sent to friendly bodies. This text was suspended by Justice Alexandre de Moraes of the Federal Supreme Court.

The Odebrecht agreement has been better protected. But we do already know, for example, that the money that is to remain in Brazil will not be sent to a Treasury account, as mandated by Supreme Court jurisprudence. It is to be under the control of members of the self-proclaimed Car Wash task force.

Rendering services
In exchange, they undertake to “manage” together with the Comptroller-General of the Union, with the Attorney-General of the Union and the Accounts Court of the Union so that they do not question the amount of the fine nor accuse the company and their directors of administrative impropriety.

Car Wash prosecutors
In exchange for managing the millionaire fine, Car Wash prosecutors undertake to ‘manage’ so that oversight bodies do not interfere in the agreement
Reproduction/YouTube

In bureaucratic jargon, “manage” means articulating and in some cases making non-official requests. In the case of public agents receiving money to do so in the name of private individuals, it is administrative advocacy, explained one specialist who spoke to ConJur on the condition of not being identified.

The U.S. chapter of the agreement has less to do with power and more to do with business. Amongst the various requirements Odebrecht has undertaken to meet is the nomination of an “external monitor of compliance with the agreement” to submit reports every 120 days.

These reports must be shown to the board of directors of the company and to the head of the FCPA division of the U.S. Department of Justice. The last item of the last annex of the agreement with the DoJ explains that the reports expected by the U.S. government will “probably include proprietary, financial, commercial and secret competition information”.

FCPA is the abbreviation for the U.S. international anti-corruption law. It exists to punish companies abroad that trade on the U.S. stock exchanges or with U.S. companies. But analysts have pointed out that the law has been used as an instrument of expansion of the economic influence of the U.S. government through private companies in other countries.

This analysis is not very popular amongst prosecutors at the DoJ who discredit the argument whenever they can. But the fact is that at the start of operation Car Wash, Odebrecht had 240,000 employees. According to the company, there are now 60,000.

Defence case
The defence for ex-President Lula, made by the lawyer Cristiano Zanin Martins, has been trying to access the documents for the agreement since May 2017, without success. Moro has turned down three requests for access in the space of little more than one year. The first denial was in September 2017, when the then judge said that handing over a copy of the document could harm other investigations underway. On May 24th of the next year, he was more clear: “There is no need for access to the case documents of the plea bargain “. In the third denial, in August 2018, he merely repeated the decision of the previous year.

Lula
Since May 2017, ex-President Lula has tried to obtain access to the case documents of the Odebrecht agreement with the FPS, unsuccessfully
Ricardo Stuckert

In February, Zanin filed a motion with the Supreme Court alleging violation of Binding Ruling 14 of the STF over the denials. The ruling guarantees the defence access to all elements of the inquiry already documented, provided the access does not harm diligences underway — exactly the argument used by Moro.

According to the lawyer, access to the documents could corroborate the defence case that Lula never received any payment for any “service” rendered to Odebrecht, and that the charges made against him have not been repeated in the U.S. They were brought in Brazil to ensure benefits for the Odebrecht family and for ex-executives of the company.

Moro argued that access to the agreement documents is not necessary. But Zanin uses the example of Petrobras: the agreement was signed in September 2018 and was published on January 30th of this year. Only weeks later, details of the setting up of the fund by the FPS were published — and the information was seen to be essential to the process, to the point of a Supreme Court Justice suspending that part until further information becomes available to judge the merits.

There and here
Lula’s defence have spoken of two main reasons for having access to the agreement documents. The first is that, in appendix 5, says the claim, there is information on the destination of the money paid by Odebrecht by way of the fine, and the FPS is arguing that Lula pay a fine in indemnification for the damages caused to the country for his corrupt deeds. But he is charged with receiving an apartment from the construction company. If both he and the company pay fines for the same facts, there would be punishment twice over, argues Zanin, which would harm the ex-President.

Justice Fachin
There was no “flagrant illegality” in Moro’s decisions denying Lula’s defence access to the agreement of Odebrecht with the FPS, says Justice Luiz Edson Fachin
Rosinei Coutinho / SCO STF

Lula also asked to see what there was in the My Web Day system. This concerns a parallel accounts software to control the bribes paid, owed and received, used by the “structured operations sector”, the bribes department, as the newspapers called it. But when the Federal Police obtained access to the system, they reported the lack of integrity of the files, with data deleted or corrupted.

For Lula’s lawyer, the fact of these files being corrupted argue in favour of his client. Odebrecht told different stories in Brazil and in the USA. Here they said hey bribed Lula for him to intercede on behalf of the company at Petrobras. One of these interventions was for the nomination of ex-directors responsible for maintaining the tender fraud scheme functioning.

But to the DoJ, the Odebrecht executives described how the cartel worked that engineering companies set up to defraud Petrobras tenders and over bill for civil construction contracts, but nothing about Lula.

No smoke
At the Supreme Court, Justice Luiz Edson Fachin also denied the request for access. According to him, there was no “flagrant illegality” in Moro’s decisions, and therefore there was no reason to grant the motion. The decision was made on March 15 of this year, and also calls for further information from the self-proclaimed Car Wash task force.

The current head of the 13th Federal Court of Curitiba, Luiz Antonio Bonat, repeated to Fachin the arguments of his predecessor: allowing access to the agreement documents would harm investigations underway. He added that the documents Lula asked to see, “in the main, corresponded to information which had no wider relevance”. “However, there is no obstacle to providing this information”, Bonat concluded in his ruling.

In response, Lula’s defence asked Fachin to reconsider the previous decision and that it would suspend the criminal case against the ex-President in the case of the apartment. “Is it possible to guarantee that the version of facts from Odebrecht in the plea bargain agreement documents is the same as that given in the court cases? Or are there things in the agreement documents approved there not relevant to the petitioner’s defence?”

Click here to read the Odebrecht agreement with the FPS
Click here to read the Odebrecht agreement with the DoJ
Click
here to read the Lula petition to obtain access to the agreement documents
Click
here to read the Justice Fachin ruling on the Lula petition
Click
here to read the judge Luiz Antonio Bonat document to the Supreme Court on the Odebrecht agreement
Click
here to read the request for reconsideration submitted to Justice Fachin

Claim 33.543
Criminal case 5063130-17.2016.4.04.7000, at Federal Justice in Parana

Pedro Canario is chief editor at Consultor Juridico.

Beyond Censorship: Destroying Free Thought Online

Very good analysis of where the Internet is being taken to homogenise Truth and learning in the image of what the powers that be say is truth. Truthstream Media quite rightly say that this is very dangerous.

The Global Economy Is a Time Bomb Waiting to Explode

Financial storm
Marshall Auerback / Independent Media Institute

In the aftermath of the greatest financial calamity since the Great Depression, then–chief of staff for the Obama administration Rahm Emanuel made the call for aggressive action to prevent a recurrence of the meltdown of 2008.

Although the U.S. government’s system of checks and balances typically produces incremental reform, Emanuel suggested that during times of financial upheaval, the traditional levers of powers are often scrambled, thereby creating unique conditions whereby legislators could be pushed in the direction of more radical reform. That’s why he suggested that we should never let a crisis go to waste. Ironically, that might be the only pearl of wisdom we ever got from the soon-to-be ex-mayor of Chicago, one of those figures who otherwise embodied the worst Wall Street-centric instincts of the Democratic Party. But give Rahm props for this one useful insight.

But we did let the crisis of 2008 go to waste. Rather than reconstructing a new foundation out of the wreckage, we simply restored the status quo ante, and left the world’s elite financial engineers with a relatively free hand to create a wide range of new destructive financial instruments.

To cite some examples, consider the case of the UK, where England’s local councils have taken on significant risk via structural financial products known as “LOBO loans” (lender option borrower option). Financial blogger Rob Carver explains how they work:

“[Let’s] say I offer to lend you £40 and charge you 3% interest for 5 years. Some other guy comes along and offers you the same deal; but the twist is he will have the option to ask for his money back whenever he likes.

“You wouldn’t borrow money from him because it’s clearly a worse deal. …

“Suppose he sticks to his guns but as a concession he will lend you the money at only 2.9% interest. Would you take that? What about 2.5%? 2%?”

What Carver is describing here is the so-called “teaser”: a seductively low starting interest rate that is sufficiently attractive to induce the buyer to take on the LOBO in the first place. It’s designed to entice someone away from fixed interest rate borrowing (which at least has the virtue of being constant and therefore more readily predictable). The seductive quality of the teaser is that one’s borrowing costs might appear “cheaper” than the higher initial fixed-rate costs offered by the Public Works Loan Board (PWLB), a wing of the government. But the troubles become more apparent with the passage of time.

What happens if and when rates unexpectedly move up? In general, as Carver notes, having to suddenly repay your loan when interest rates have risen to 4 percent is the worst possible time for you. It’s akin to taking away the umbrella the minute it starts to pour. Worse, the authority is likely locked into a contract that typically has a lifespan of 40-70 years. (And who can forecast with any degree of certainty the trend of interest rates over that sort of time span? It makes the whole notion of buying an instrument on that premise to be speculative in the extreme.) Banks have the option of raising rates at their discretion, and although the councils are able to opt out of their contract, they will pay huge penalties if they seek to renegotiate or exercise that option to opt out.

So there’s a huge negotiating imbalance built into the contract, and the likely upshot is that the local council ends up paying more in interest charges over the course of the loan. How much more? According to an activist group, #NoLOBOs (created to help housing authorities combat the impact of these instruments), “a substantial number of housing councils are facing 7-9 % interest rates, which is more than twice the current rate of lending at the PWLB.” And in many instances, the municipalities have been burdened with these higher borrowing costs at a time when additional funding from the national government has been cut back, so they are confronted with a double whammy on both sides of the balance sheet.

What was initially sold as a means to manage risk, then, ultimately metamorphoses into a recipe for financial fragility, especially when it occurs at the municipal level with institutions that don’t have the capacity to create new currency (as a federal authority can do). The “teaser” becomes a poison pill. This means a local authority (or level of government that is a user, rather than issuer, of currency) can go bust.

To give some sense of the magnitude of the market, the Independent notes:

“There is around £18bn worth of private sector loans on councils’ books, according to figures from the Department for Communities and Local Government. … [A]round £15bn of these are Lobos.

“Annual sales to local authorities regularly topped £1bn in the run-up to the financial crisis and peaked at £1.5bn in 2007, before crashing to £600m a year later and then dwindling to nothing in 2012.”

Their revival since 2012 has resulted in hundreds of millions of pounds being skimmed from struggling town hall budgets, which were hit by the double whammy of these toxic instruments, along with austerity-imposed cutbacks from the national government. One particularly egregious example was the cash-strapped town of Newham, which had £398m of exposure to LOBOs back in 2014. Faced as well with cutbacks from the national Tory government, the local council was forced to remove financial support from a homeless hostel, “leading to the eviction of a group of single mothers to save £41,000,” reported British publication Private Eye.

Needless to say, banks and brokers have profited handsomely from the whole exercise, pocketing hundreds of millions of pounds in profits.

Here’s another disaster waiting to happen: Globally, financial markets today are seeing a rebirth of “collateralized loan obligations” (CLOs), instruments broadly similar to the “collateralized debt obligations” (CDOs), which helped to blow up the financial system in 2008. CDOs were asset-backed instruments, a “blended” security comprised of risky mortgage-backed bonds and much of the rest from theoretically safer tranches. The theory underlying them was that the lower the investment quality, the higher the compensating yield, but in reality most turned out to be toxic junk. What distinguishes CLOs from their CDO “cousin” is that instead of repackaging mortgages, subprime and otherwise, CLOs repackage corporate loans, and consumer credit, such as car loans.

Unfortunately, in yet another instance of lessons unlearned from 2008, the collateralized loan obligations, like the CDOs, have virtually non-existent investor protection, “with over 70 percent lacking any covenants that would allow monitoring of financial condition and early intervention to manage problem borrowers. This exacerbates the risk of higher losses,” argues Satyajit Das, a former banker who first identified the risks to financial stability posed by these kinds of instruments back in 2008. In fact, Das elaborates, “relative to mortgages, [CLOs] typically are made up of fewer and larger loans, which increases concentration risk. Leveraged loans are highly sensitive to economic conditions and defaults may be correlated, with many loans experiencing problems simultaneously.” Which intuitively makes total sense: during a slowdown, virtually all economic activity slows down, whether that be housing, car sales, or consumer borrowing. Diversification of risk is therefore more apparent than real.

In an environment of prevailing low interest rates (and, hence, lower yields from conventional instruments), debt investors have been told (again) that they can enhance their portfolio returns, through these higher-yielding CLOs, while mitigating risk simply by diversifying. In theory, the risk is dispersed, but in practice, as Das has pointed out, if you’re simply diversifying different kinds of financial excrement, the end result is more likely to be insolvency for the whole instrument. A common theme is that in spite of the disastrous performance of these instruments during the market crash, many of the underlying loans today still lack standard provisions to protect lenders, such as reporting and requirements to maintain certain income and asset levels. Consequently, more toxic junk is being passed around the system like a hot potato. Last one holding the potato loses.

Given the scale of issuance, all major financial institutions are likely to be left holding these bags. CLOs, notes Das, have been growing at a rate of around $100bn a year for the past decade, and total levels outstanding now approach the size that existed in the CDO market by the time of the 2008 crisis. As the cycle has matured, the quality of the assets of the loans has diminished, and the borrowers have become increasingly leveraged.

This follows a classic pattern of a typical borrowing cycle, as credit structures move from relatively stable “hedge financing” (where the underlying units can meet payment commitments out of income flow) to “Ponzi” finance (borrowing simply to pay interest on the interest), a process originally outlined by the economist Hyman Minsky. Based on the relatively benign conditions of the recent past, both borrowers and lenders are lulled into a false sense of security and increase their respective risk profiles accordingly. Minsky was by no means the only economist whose work has become associated with manias, panic and crash. He built his analysis on the shoulders of analysts of the Great Depression, such as Irving Fisher, John Maynard Keynes, and John Kenneth Galbraith. But what distinguishes Minsky’s scholarship is that he focused it on the “upward” source of the financial instability, as opposed to its disastrous denouement. In relation to today’s CLO market, the parallel is that the decade-long period of stability in the aftermath of 2008 (in reality, faux stability achieved through the injection of trillions of dollars in public sector bailouts) has again given the users a stream of data providing the illusion that leverage is safe.

Rather than respond to each financial meltdown by seeking to curb the activities that led to the crisis in the first place, the sheer ongoing dominance of our financial sector has ensured that policy has merely worked to bail out the big players, and do everything to keep the rigged casino of the economy in their favor. Thus, financial institutions continue to concoct increasingly esoteric and opaque financial instruments that they market to less financially sophisticated counterparties.

Let’s roll back the tape to a few financial crises ago, from the early 1990s. At that time, Bob Citron, the Orange County treasurer, bankrupted his county via leveraged investments he made in structured notes (i.e., customized notes designed to fit the investment wishes and opinions of particular institutional buyers). If you tailor an exotic instrument to fit your investment outlook, you’d better know what you’re doing and appreciate the downside risks. Customization entails a level of financial expertise that Citron later conceded he did not fully possess. He was a sitting duck in a sea of sharks (to mix metaphors). Citron made a bet on the direction of interest rates (he bet they would stay low, which was wrong). As a result of his miscalculation, by 1994 Orange County’s investment portfolio began hemorrhaging hundreds of millions of dollars, ultimately going broke. Without conceding any liability, ultimately Merrill Lynch paid out $400m in penalties to settle the case.

That was an early warning signal, which unfortunately remained unheeded, as it was followed in quick succession by the Asian financial crisis in 1997, the bankruptcy of Long-Term Capital Management and the concomitant Russian debt default in 1998, the dot.com bust, and finally the complete seizure of the global financial system by 2008. Each time, a common foolhardy notion was the idea that higher levels of reward could be achieved without any corresponding increase in risk. All of this occurred against a backdrop of deregulation, minimal transparency and inadequate market supervision.

If you thought the near-breakdown of the global economy in 2008 was enough to make global policymakers and regulators rethink their persistent accommodation of financial innovation and deregulation, think again. Regulators have continued to accommodate this complexity, rather than minimizing it. Complex financial systems beget yet more complex (and ultimately ineffective) regulation. It is better to simplify the system in order to improve the quality of the regulation and the ease of oversight (which the complexity is designed to avoid).

Unfortunately, that’s not what our policymakers have done. Instead of redesigning the system, the monetary authorities have simply inserted themselves in the chain of intermediation that included an ever-evolving variety of books of business without actually considering whether there were too many weak links in the credit chain in the first place. Rather than shorten or redesign the economy’s credit structures, and curb the risks accordingly, central banks instead have simply acted as the ultimate guarantors in a supply chain from money-like instruments to longer-term and riskier credit. Absent any kind of sanction for undertaking more systemically dangerous activities, our policymakers have therefore made the same mistakes that were made in the early 2000s: they are establishing perverse ongoing incentives that increase risk, punishing the timid (prudent?) with low returns. It’s a classic illustration of Gresham’s Law, whereby bad money drives out good.

So here we go again. No less a figure than Claudio Borio, the chief economist of the Bank for International Settlements central, who warned of the dangers of a synchronized housing bubble well before the 2008 crisis, is again sounding the alarm about a recurrence. The crash gave us a chance to downsize finance and restrict its ability to wreak comparable havoc on the economy going forward. Instead, we let the crisis go to waste, which almost certainly means a nasty sequel to 2008 facing us in the near future.

Found at: Truthdig

This article was produced by Economy for All, a project of the Independent Media Institute.

“It is Babel”, says Brazilian Supreme Justice on the US$ 680 million for Car Wash Foundation

marco-aurelioTales Faria at UOL

Justice Marco Aurélio Mello of the Brazilan Supreme Federal Court considers the destination of US$ 650 million to a foundation managed by the Operation Car Wash (Lava Jato) prosecutors to promote anti-corruption policies to be absurd. The money was deposited in January. It is the fruit of an agreement between US authorities, Petrobras and the team of the so-called Republic of Curitiba where Lava Jato is based. It represents 80% of the capital the Brazilian state company had to return to the US Treasury due to the irregularities found in Car Wash. According to Marco Aurélio Mello, such a destination, besides being illegal, sets up a super-entity and bypasses any oversight or control of its accounts. To this blog, he argued:

As has always been sustained by the Supreme Court, public bodies are funded only through the budget approved by the legislature. The mixing of public and private is not in the interests of the State, is not in the interests of society. It is  pernicious to allow ‘super-entities’, and not to allow financial oversight. It is a loss of parameters, it is out of control, it is an administrative mess. It is Babel.

The power conferred on the prosecutors of Paraná is provoking fear in Bolsonaro’s closest circles. Allies of the President argue that he puts off to a possible second mandate his proposal to repeal re-election. Without the chance to run again, Bolsonaro would leave his government vulnerable during the campaign “Moro 2022”.

Sergio Moro is the leading judge behind Operation Car Wash which found alleged corruption in Lula’s PT government, sentenced him to prison and took him out of the running for the Brazilian Presidency, and who then became Justice Minister in the government that took power in Lula’s absence.

The foundation proposed is dangerous because with the same bias that took out Lula from the election, if present in the efforts of education and propaganda, could simply be used to support judge Moro’s political ambitions to get elected to lead the next government.

In the style of Moro – spying and extortion to persecute Cristina Kirchner

carlos-stornelli-marcelo-dalessio

Carlos Stornelli (left), Marcelo D’Alessio (right)

Argentinean federal judge Alejo Ramos Padilla charged the false lawyer Marcelo D’Alessio as a member of an illegal organisation “dedicated to carrying out intelligence and psychological operations against various persons who were then blackmailed or coerced, until they panicked, finally declaring themselves in a certain way and becoming “repentant witnesses”, the Argentinean version of the “plea bargains” so common in the Brazilian Operation Car Wash (Lava-Jato).

The key point in this case is that the judge considers there to be an accord between the intelligence services and the Justice Department that goes against the democratic system using blackmail, coercion, dossiers, distortion and false lawyers demanding money of people, and furthermore, to set up and run judicial cases.

All this is very similar to the judicial scheme carried out in Brazil by the ex-judge Sergio Moro (now recompensed with the post of Minister of Justice in the government of Jair Bolsonaro), regarding bribes linked to the multinational Odebrecht, which had the aim of imprisoning ex-President Lula da Silva and of impeding him from participating in the elections. In the Argentinean case, they are seeking the imprisonment of ex-President Cristina Fernandez de Kirchner, to stop her from running against the current President Mauricio Macri seeking re-election in October.

In the 220 pages of his resolution, Judge Ramos Padilla showed there was a close link between the prosecutor Carlos Stornelli (an Argentinean Deltan Dallagnol) and the supposed lawyer D’Alessio, evident from the many messages and audios exchanged over Whatsapp, and by a four hour meeting between them at the Pinamar resort, as well as handwritten messages in notebooks seized during investigations. Due to this, the magistrate requested the Prosecution Service to investigate the prosecutor, and to begin the due process, if considered pertinent.

In this first resolution, the task is to describe the mechanisms of the crime, as to how Stornelli and D’Alessio extorted the businessman Pedro Etchebest, or how they used a hidden camera against the lawyer José Manuel Ubeira, or used the “repentant witness” statement of Leonardo Fariña, or coerced an ex-member of staff of the Venezuelan state company PDVSA to declare himself repentant.

Despite Stornelli refusing to hand over his mobile phones to enable the frequency and kind of contacts with D’Alessio to be determined – who is the nephew of the Clerk-General of the government, Carlos Marcelo D’Alessio – a third businessman appeared denouncing D’Alessio for extortion and involving the lawyer Rodrigo Gonzalez and the judicial operator of the newspaper Clarín, Daniel Santoro, although they have denied the charge.

The meeting place of the four, Stornelli, D’Alessio, Gonzalez and Santoro, was the restaurant El Obrero, decorated with photos of President Macri. Its owner is a partner in another business venture, of Charly Liñani – denounced by the ex-presidential secretary Pablo Barreiro, of the Cristina Kirchner government, for attempted extortion, committed together with D’Alessio and Gonzalez, as revealed by the journalist Horacio Verbitsky on his site Cohete a la Luna.

The messages and audios also show attempts to use Leonardo Fariña, forcing him to make the declarations required to incriminate Cristina Kirchner. Fariña presented himself spontaneously to the court, and told how D’Alessio offered him to take part in the extortion against Etchebest. That charge has been presented to the Justice Department.

The judicial dispatch includes various audios in which, by means of a plan to extort, one can glimpse the possibility of including the businessman Mariano Martínez Rojas, responsible for the fraud against the workers of the newspaper Tiempo Argentino intended to dismantle the outlet, which now functions as a cooperative of journalists. The blackmail involving Martínez Rojas attempted to make him testify against the Peronista governor of the province of Formosa, Gildo Insfran.

The operation to transform another executive into a repentant witness – Gonzalo Brusa Duvat, who worked in a branch of Venezuelan oil company PDVSA in Argentina – has the same characteristics. Duvat was threatened with an economic criminal judicial case, but would guarantee that the process would disappear in the files if he accepted to declare himself “repentant” for Stornelli.

Once softened up with the threat of a legal suit against him, D’Alessio and the journalist for Clarin, Daniel Santoro, published articles about the declaration by Duvat as repentant, which was announced with pomp and circumstance in dozens of audios and Whatsapp messages. The judge said the precise role of Santoro and of other journalists involved still had to be analysed.

What surprised analysts is that D’Alessio managed to join Stornelli’s investigation team, who is a Federal prosecutor, without being a lawyer and without being registered to work at the Prosecution Service. The other assistants of the prosecutor soon delivered a copy of the declaration D’Alessio later sent to another conservative journalist, Eduardo Feinman – a situation which is at the very least unusual and unprecedented.

Another surprise was the transcription made by the magistrate of a phone tap dated February 4th, in which the false lawyer speaks to someone identified as Andrés Goldemberg: “I am at your disposal, if you need to extract someone”. It also mentions he is able to make available an aeroplane with 14 seats to carry out the operation.

“(The evidence) leads me to the conviction that at least within his post at the Prosecution Service, there was a promiscuous situation (of Stornelli), generating relationships of complicity and mutual collaboration which should not have been permitted, with the consent of the prosecutor, including the carrying out of intelligence and psychological operations to achieve the expected results in the judicial investigations or to attend to the magistrate himself”, wrote the judge.

Rubén Armendariz is a Uruguayan journalist and political scientist, associated with the Latin-American Strategic Analysis Centre (CLAE)
Published originally at estrategia.la

Lula at his grandson’s funeral

Lula grandson funeral

On leaving the cemetery, Lula stood up on the Federal Police car and waved to his supporters. When he got down, the Federal Police agent said: “You should not have done that”.

“You know that I had to”, responded Lula.