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Brazzil - Corruption - July 2004

In the US, Jail. In Brazil, Slap on the Wrist.

Former minister and banker Ângelo Calmon de Sá, 68, was
the owner of Bahia's Banco Econômico—one of the 10 largest
Brazilian banks— when that institution went bankrupt in August 95.
The bank was then US$ 1 billion in the red. His punishment,
almost 10 years later: no corporate position for 20 years.

Alana Gandra

Calmon de Sá

Picture While in the United States, Kenneth Lay was shown on TV arriving at court in Houston wearing coat, tie and handcuffs, in Brazil, the CVM (Comissão de Valores Mobiliários—Brazilian Securities Exchange Commission) has barred the former banker, Ângelo Calmon de Sá, from holding any corporate position for 20 years. He got the maximum penalty.

Calmon de Sá was found guilty of mismanagement while he was the head of the Banco Econômico. Under Brazilian corporate law, the maximum sentence he can receive is a 20-year disbarment. The Banco Econômico went into receivership in August 1995.

The CVM also sentenced other former officials of the bank as follows: Roberto Antonio Alves, (barred for 10 years) and Roberto Videira Brandão (barred for 5 years).

The following former officers of the bank were barred for three years: Luiz Ovídio Fisher, Sérgio Pedro Martello, Roberto Calmon de Barros Barreto Filho, José Bandeira de Mello Júnior and Vital de Freitas Santos Souza Filho.

The CVM absolved Lucilo Pelosi, Reynaldo Giarola, Jefferson de Souza Almeida and José Roberto David de Azevedo.

No one has gone to jail in this case.

No Habeas Corpus

The Chief Justice of the Brazilian Supreme Court (presidente do Supremo Tribunal Federal) (STF), Nelson Jobim, has ruled that Vagner Rocha and Carlos Alberto da Costa Silva, who were arrested during Operation Anaconda (Operação Anaconda), will remain in jail by denying them habeas corpus as requested by their lawyers.

Operation Anaconda is one of the more sensational criminal cases now in process in Brazil, involving the sale of court decisions and sentences. As such, it has resulted in arrests by the Federal Police of at least one federal judge (others are under investigation) and a number of lawyers.

Mapping Crime

Since the end of 2003, a commission created by government legal officers (Ministério Público), the Central Bank (BC), Federal Revenue, Securities Exchange Commission, the Federation of Banks (Febraban) and the Council for Control of Financial Activities (Coaf) has been trying to map the relationship of crime and money laundering in Brazil.

Under study is a nationwide register of bank accounts which would facilitate information gathering and sharing. The commission says it wants special courts at the state level to deal with crimes involving money laundering. With support from the United Nations Development Program (UNDP), Brazil will also conduct a comparative study of Ibero-American judicial systems and their processes of judicial reform, to enhance the exchange of experiences on the results achieved in these countries.

This was one of the decisions reached at the 14th Conference of Ibero-American Ministers of Justice, which took place, recently, in Fortaleza, in Northeastern Brazil.

The conference recommended actions by governments and Ministries of Justice in three main areas: reform of judicial administration, adaptation of penal law to combat transnational crime, and greater agility in international judicial cooperation through the creation of an Ibero-American network for this purpose.

"All this is important for the strengthening of democracy in these countries," affirmed the secretary of Reform of the Judiciary, Sérgio Renault.

As was made clear during the debates, judicial reform is underway in the majority of Ibero-American countries. "The sluggishness of Justice is a reality in all the countries. For this reason there is a convergence of proposals over the need for modernization of the Judiciary, changes in procedural laws, and attunement of the legislation," the secretary said.

The Ministers were unanimous in their opinion that the use of new technologies is essential for the improvement of judicial administration, through integrated information systems and the sharing of data banks among various juridical organs and prosecutors' offices.

The Ministers discovered that the Ibero-American world is also concerned about penal reform in their countries, in order to suppress crimes such as narcotraffic, terrorism, money-laundering, corruption, and sexual exploitation, among others.

The countries that participated also agreed to the creation of an Ibero-American network of international judicial cooperation. According to Renault, Brazil will have no difficulties in adapting to this network.

"Brazil already possesses a good technological level and political determination for this to come about," he said.

Alana Gandra works for Agência Brasil (AB), the official press agency of the Brazilian government. Comments are welcome at lia@radiobras.gov.br.
Translated from the Portuguese by Allen Bennett.

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