The Rendon Group Snapshot Report – 13 February 2017

by TRG Alerts Admin on February 20, 2017

The Rendon Group

(13FEB17)

Each week The Rendon Group’s media analysts will focus on a different continent and a different issue affecting that continent. As always, we remain available to answer any questions you may have and to provide additional information upon request. For more information regarding The Rendon Group’s products and services, please contact us at Alert@Rendon.com or +1-202-745-4900.

Police Strikes and Corruption Allegations Ferment Unrest in Brazil

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Youths with T-shirts covering their faces gesture next to a burning barricade in Vitoria (Guardian)

Fallout from the impeachment of President Rousseff, austerity measures, and entrenched corruption continue to be felt in Brazil, as waves of violence have rocked the South American country in the new year. In January, allegations that President Temer accepted bribes from state oil company Petrobas, coincided with a rash of gang violence in Brazil’s prisons, which left at least 100 inmates dead. This week, unpaid salaries led to a police strike, which started in the city of Vitoria in the state of Espirito Santo on 04FEB and quickly spread to other cities, including Rio de Janeiro. The ensuing crime wave has resulted in massive commercial losses and at least 120 deaths. Concurrent with this violence, Brazil’s government is experiencing repercussions from allegations, brought to light by the Panama Papers scandal, that the Odebrecht construction company bribed officials across South America in order to secure public works contracts. Officials from Peru, Brazil, Colombia, and Panama have been accused of taking money in return for awarding Odebrecht bids.

News summary of events during the week of 06FEB17 – 13FEB17

  • 06FEB: Brazil’s government authorized deployment of troops to the coastal city of Vitoria, which has been left at the mercy of criminals following a police strike. (AFP)
  • 07FEB: More than 1,000 army troops are patrolling the streets of Vitoria amid the crime wave that has left at least 70 people dead over two days. (AP)
  • 08FEB: An electoral court in Rio de Janeiro ordered the state’s governor, Luiz Fernando Pezão, and his deputy to stand down, accusing them of offering state contracts in exchange for campaign donations. (Reuters)
  • 08FEB: Acting governor of Espirito Santo, Cesar Colnago, told reporters that he would ask the federal government for more troops to reinforce the 1,000 already sent. (AP)
  • 08FEB: A Brazilian federal judge suspended the nomination of a close ally of President Michel Temer to a ministry-level position, according to the court’s website. (Reuters)
  • 08FEB: Prosecutors in Peru requested the arrest of former president Alejandro Toledo over accusations he took a $20-million bribe from Brazilian construction firm Odebrecht. (AFP)
  • 09FEB: A spokeswoman for the union representing police reported they have registered 101 homicides since police began striking on 04FEB — more than six times the average. The state’s retail association reported that businesses have lost 90 million reais ($28.87 million) since police walked off the job. (Reuters)
  • 09FEB: A partner in the law firm at the heart of the “Panama Papers” scandal accused the Panamanian president of accepting “donations” from the Odebrecht construction company. (AFP)
  • 10FEB: Rio de Janeiro’s police went into partial shutdown when relatives of officers blockaded several stations to demand back pay, sparking fears that Brazil’s second biggest city could descend into unrest. (AFP)
  • 10FEB: In Espirito Santo state, the total police paralysis has led to anarchy, with more than 120 people reportedly murdered in a week and shops looted. Tension remains high despite the arrival of regular army soldiers to patrol the streets. (AFP)
  • 10FEB: The founders of the law firm at the center of the “Panama Papers” scandal are being held as part of the probe into a graft case involving the Odebrecht construction group. (AFP)
  • 10FEB: Peruvian police launched a manhunt for ex-president Alejandro Toledo, once hailed as an anti-corruption champion, after a judge ordered his arrest over accusations he took $20 million in bribes from Odebrecht. (AFP)
  • 10FEB: Authorities in the state of Espírito Santo have indicted more than 700 striking military police officers on charges of the “crime of revolt.” (Guardian)
  • 10FEB: Authorities in the state of Espirito Santo said they had reached a deal to end a week-long police strike that has sparked violent anarchy and left more than 120 people dead. (Reuters)
  • 11FEB: A few dozen military police returned to duty in Espirito Santo, but it was unclear if the force as a whole is ready to end a weeklong strike (AP)
  • 11FEB: Wives and other relatives of police in the Brazilian state of Espirito Santo defied a deal aimed at ending a week-long strike, complaining that they were not included in negotiations to end the action over pay. (BBC)
  • 12FEB: Several hundred police returned to their patrols after an eight day strike. (AFP)
  • 12FEB: Peru’s Interior Minister said it was unclear where the fugitive former president Alejandro Toledo is after the government’s bid to capture him hit a legal obstacle in the United States. (Reuters)
  • 13FEB: Children began returning to school and most public transport is operating again in Espirito Santo after the protests that prevented military police from patrolling. (AP)
  • 13FEB: Brazilian President Michel Temer on dismissed criticism that he promoted a close aide to shield him from prosecution and vowed to dismiss any minister indicted for corruption. (Reuters)

Sample of Twitter handles tweeting about continued unrest in Brazil

  • @snolenStephanie Nolan, Brazil-based Latin America Correspondent for Globe and Mail.
  • @BrazilBrianBrian Winter, Editor-in-Chief of Americas Quarterly.
  • @MSavareseMauricio Savarese, Associated Press reporter in Rio.
  • @ChrisSabatiniChristopher Sabatini, Editor of policy-analysis website Latin America Goes Global Former Editor of America Quarterly, lecturer of international policy at Columbia U
  • @davidluhnowDavid Luhnow, Latin America Editor for The Wall Street Journal/Dow Jones.

Sample of Third Party Validators regarding the continued unrest in Brazil

Carlos Melo, a political scientist at São Paulo’s Insper business school.

“This crisis that we’re seeing, if it spreads to other states, could impose a rapid retreat in the fiscal adjustment,”

  • “Chaos Swells Amid Police Strike in Brazil State”, WSJ, 08FEB17

João Pedro Brugger, Leme Investimentos asset-management firm.

[Mr. Odebrecht’s testimony] could unearth revelations that would reduce the chances of this administration surviving through the 2018 elections,” “It creates uncertainty about the economic agenda.”

  • “Marcelo Odebrecht Agrees to Plea Deal in Brazilian Corruption Probe”, Wall Street Journal, 01DEC16

Julio Arbizu, former anti-corruption prosecutor who first launched the probe into Toledo’s finances

“How could it be that these middle-ranking functionaries were the only ones taking money when García had such a high-profile relationship with Odebrecht?

  • “Brazil’s huge corruption scandal is spreading to the rest of Latin America”, Washington Post, 12FEB17

Andrés Hernández, head of the Colombia chapter of the anti-graft group Transparency International

“This actually shows that there is less and less tolerance for corruption,” “Latin America’s democratic institutions are still young, but citizens are fed up, and the fact that these crimes are coming to light shows that we are progressing.”

  • “Brazil’s huge corruption scandal is spreading to the rest of Latin America”, Washington Post, 12FEB17

José Lino Sepulri, president of the state commerce federation

“I’ve been in retail for 55 years and I’ve never seen a situation like this,” “People aren’t leaving their homes and everything is closed.”

Sample of open source research conducted by TRG analysts related to the continued unrest in Brazil

  1. Brazil troops patrol streets in southeast city amid crime

 

Media: Associated Press

Byline: N/A

Date: 07 February 2017

SAO PAULO (AP) — More than 1,000 army troops are patrolling the streets of the southeastern Brazilian city of Vitoria amid a crime wave that left at least 70 people dead over two days, authorities said Tuesday.

The killings in the city in Espirito Santo state about 460 miles (740 kilometers) northeast of Sao Paulo came as patrol cars stopped cruising the streets while the friends and family of military police officers blocked their barracks to demand higher pay for their uniformed loved ones.

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  1. Brazil judge suspends nomination of Temer ally as minister

Media: Reuters

Byline: Eduardo Simoes

Date: 08 February 2017

SAO PAULO (Reuters) – A Brazilian federal judge suspended the nomination of a close ally of President Michel Temer to a ministry-level position, according to the court’s website on Wednesday.

The promotion of Wellington Moreira Franco, who has reportedly been named in Brazil’s massive corruption investigation, aroused controversy because it shields him from investigation from any court other than the supreme court. Moreira Franco denied there was a political motivation behind his promotion.

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  1. ‘Panama Papers’ lawyers held in Brazil graft probe

Media: Agence France-Presse (AFP)

Byline: N/A

Date: 10 February 2017

Panama City, Feb 10, 2017 (AFP) – The founders of the law firm at the center of the “Panama Papers” scandal were being held Friday as part of a probe into a sprawling graft case involving Brazilian construction group Odebrecht.

Ramon Fonseca Mora and Juergen Mossack, named partners of the Mossack Fonseca firm, were put in preventive detention late Thursday by Panamanian authorities, one of their attorneys said.

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  1. Brazil court says Rio governor should step down over campaign financing

Media: Reuters

Byline: Rodrigo Viga Gaia

Date: 08 February 2017

RIO DE JANEIRO (Reuters) – An electoral court in Rio de Janeiro on Wednesday ordered Rio de Janeiro state governor Luiz Fernando Pezão and his deputy to stand down, accusing them of offering state contracts to attract financing for a 2014 reelection campaign.

The court said in a statement that the order would not take effect until Pezão and Vice-Governor Francisco Dornelles had exhausted the appeals process, something likely to take some time in Brazil’s complex judicial system.

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  1. Protesters block several Rio police stations

Media: Agence France-Presse (AFP)

Byline: N/A

Date: 10 February 2017

Rio de Janeiro, Feb 10, 2017 (AFP) – Rio de Janeiro’s police went into partial shutdown Friday when relatives of officers blockaded several stations to demand back pay, sparking fears that Brazil’s second biggest city could descend into unrest.

Across most of the sprawling city, where violent crime is on the rise, police deployed normally. But at a handful of stations, including the elite Shock Battalion, protesting officers’ wives said they had blocked the main entrance since the early hours.

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