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Why the main parties used intermediaries to win certain Petrobrás…

- - - - THIRD PARTY
        
        suppliers
        
        consultants
        
        contractors
        
        customers
        
        JV partners
        
        clients
        
        INTERMEDIARY
        
        AGENTS
        
        marketing agent
        
        scope: close a deal on behalf of one of the main parties to a deal
        
        Main parties: customer and supplier of goods or services
        
        local sales agent
        
        lobbyists
    - - What was the role of the intermediary when there was no corruption? Pure trade on influence?
      - the licit and the illicit deals between two given parties get confused. Often, there is no clear cut.
    - - Analisar peca processual é pior que analisar depoimento, já que elas foram elaboradas por advogados.
      - LIST
        
        Fernando Soares (Baiano)
        
        Zwi Skornicki
        
        Milton Pascowitch
        
        Mario Frederico Mendonca Goes
        
        Fernando de Moura
        
        Alberto Youssef
        
        Carlos Alexandre de Souza Rocha (Ceará) - mula do Youssef
        
        José Adolfo Pascowitch (irmao de Milton)
        
        José Guerin de Almeida Camargo
      - They were often imposed by politicians and bureaucrats, to whom they were loyal. Was there any case of intermediary imposed by the companies.
    - - Mario Goes
        
        Começou em 2014
        
        Foi escolhido pelo Pedro Barusco e atendia apenas a ele.
        
        Muito qualificado tecnicamente: engenheiro naval (belo disfarce)
      - Vaccari
        
        Ele era uma escolha dos políticos e nas dos empresários.
      - Milton Pascowitch, operador do PT na diretoria de serviços da PB
      - Fernando Soares (AG)
        
        As famílias de Baiano e PRCosta se frequentavam: festas de aniversários, empréstimo de casa de praia, férias juntos, jantares.
        
        Tinha contato pessoal com mattoni
        
        Começou a relação com a AG através de contratos lícitos.
      - Julio Camargo (Toyo Setal)
        
        era amigo pessoal de pedro barusco. frequentavam a casa um do outro.
    - - The following moves:(Academic Writing and Publishing: A practical handbook, p49)
        
        Move 3: List potential limitations to the study.
        
        Move 2: Evaluate how the results fit in with the previous findings – do they contradict, qualify, agree or go beyond them?
        
        Move 4: Offer an interpretation/explanation of these results and ward off counter-claims.
        
        Move 1: Restate the findings and accomplishments.
        
        Move 5: State the implications and recommend policies and further research. #
      - A ‘moves’ analysis of the results sections of academic articles either looks like this: (Academic Writing and Publishing: A practical handbook, p47), in non-humanities works this branch belongs to the Findings and Results chapter
        
        Move 1: State the main findings in order – relating them in turn to the hypotheses and methods used.
        
        Move 2: State the subsidiary findings – relating them in turn to the hypotheses and methods used.
  - - - RISK (protection)
        
        Protection against defection (guarantee of completion / enforcement): abandonment , default.
        
        Youssef 2015; Camargo 2015. Two cases in the thesis
        
        Guarantor: Yousseff chegou a pagar propina para o PP e Costa, com recursos próprios, para cobrir calote da CC.
        
        Protection from being caught
        
        In case of systemic bribery, this item is less important. There are several instances of meetings between briber and bribee, either involving the intermediary or not
        
        There are events in the PB case where the bribee and the briber met, with the intermediation of the intermediary. (Youssef/Deputado Morto).
        
        In Russia Alexei Ulyukayev was caught in the act of leaving a meeting carrying a bag of cash. He was the Russian minister of economy. He was caught in an sting operation.
        
        In this function intermediaries failed, as they were some of the first suspects to cooperate with the authorities and finally sharing incriminating info against their clients
        
        ID Protection
        
        Protection against extortion after conclusion of the deal /ficar na mão da contra-parte para sempre
        
        Como era caso sistemico, essa necessidade foi paulatinamente ardendo a força.
        
        they used to use nicknames
      - DIFFICULTIES (communication)
        
        Access to people (interm. are influential) / disposition to deal
        
        access to confidential info.
        
        Zwi Skornicki (tinha contato com o Barusco. Cuidava dos pagamentos que vinham do estaleiro Keppel Fels)
        
        Sondas Sete Brasil (grupo PB): propina de 0,9%. Barusco teve a desfaçatez de cobrar uma beirada só para si, às escondidas, de 0,1%. A empresa topou. Não repassou o valor ao partido ou ao Duque.
        
        Recebia do barusco info privilegiada.
        
        It is known that the two main parties of the scam would largely employ intermediaries, who would additionally endorse the compliance by each with the agreement. They are called doleiros (money changer) in Brazil. The existence of doleiros gives the parties not only a(n apparent) higher level of secrecy and identity protection, but also the impression that the middlemen would shield them from being caught red-handed and from being extorted by the counterparty after the deal is concluded.
        
        Moreover, the mains offenders would use intermediaries in order to perpetrate the corruption crimes. The middlemen would also play the role of reinforcing secrecy and trust between the main participants, as the participants would not meet, although they would know the identity of one another and they would also count with a guarantor of the operation, the broker, who control the communication between the parties, which provides them with high power in such networks. Such brokers in Brazil are called “doleiros” (or “dollar changers”, in a loose translation)
        
        Youssef abria portas dentro da Petrobras e entre políticos para executivos.Youssef tinha tb o papel de vender facilidade. Ele tinha acesso aos diretores da PB. Os empresários pagavam tb isso. mandava dinheiro para fora em contratos de importação fictícios. De modo que não interessava a nenhum deles que as relações entre a PB e as empreiteiras fosse mais equilibradas ou menos burocráticas
        
        Money laundering / transferring (reliable payment system)
        
        objective: confuse the origin of the money
        
        Some of the intermediaries were not involved in this "operational" activities of transferring and laundering money.
        
        Such activity included larger structure: subcontractors, bagmen, management of the risk of transporting cash, etc.
        
        Multiple methods used to hide bribes:
        .cash payment;
        .payment disguised as consulting fees;
        .remuneration of false services;
        .overpayment of goods and services;
        .subcontracting;
        .delivery of materials for the private benefit of the bribee (Lula);
        .payment to a front company owned by the bribee (or by someone related to the bribee)
        .payment made to the bribees hidden accounts
        .payment to a third party beneficiary. (OECD, 2007, p.48)
        .delivery of gifts
        
        frase dele: "Os empresários tinham um conceito diferenciado da minha pessoa porque sempre fui um cara correto. Eles sabiam que o que passava pela minha mão ia chegar no destino sem desvios, sem sacanagem (em entrevista qual?) (vi no VN)
        
        Alberto Youssef (compadre do Janene) (Abastecimento, PP) Era uma escolha dos receptores e não dos empresários.
        
        fernando Soares Recebia em contas no exterior e pagava, principalmente ao PRCosta em espécie e em contas no exterior. F. Soares atuava desde 2007
        
        F. Soares passou a servir como contato privilegiado da AG com PRCosta. celebrou contrato de consultoria com a AG para influenciar decisões de PRCosta. Mattioni recebeu kickback do Baiano.
        
        solving hurdles / conflicts of the way within PB
        
        O papel dos intermediários não lhes era exclusivo. Eles nem sempre tinham o papel de preservar o anonimato. Parece que tinham mais o papel prático de lavar dinheiro e resolver os problemas contratuais das empreiteiras diante da diretoria da PB e diante dos politicos e vice versa.
        
        Terms of the deal (get contracts signed)
        
        Communication: parties want to avoid friction and misunderstandings in determining the T&C of deal.
      - Trust
      - Repetition
        
        This characteristic does not differentiate good from bad intermediary
      - Reasons not to use intermediaries
        
        Let fewer people know about the commitment of a crime, therefore reducing the risk of being caught.
        
        Payment of high fees to the intermediaries, normally a percentage of the contract, in the case of PB, upon min contract´s payment milestones. In some cases, the intermediary receives the full amount and transfer a portion to the Bribee. In other cases, such as PB, the briber pays a portion directly to bribee, in the form of campaign donation.
  - - - CORRUPTION / the Car Wash Case
        
        Corruption in Construction / public procurement
        
        15% of all cases cases of foreign bribery surveyed by OECD were connected to construction projects. (19% extractive)
        
        Describe construction in Brazil
        
        Brazilian construction players are influential in other LATAM countries, but also in Africa.
        
        According to OECD, 30% of cases of international bribery involve AGENTS #
        
        Ver caso da Skanska na Argentina (Sayne, 2017 p. 38), where there is intermediary
        
        English homepage for Transportadora De Gas Del Norte S.A. (accessed 2 February 2017).
        “Skanska no sabe quién cobró los sobornos,” La Gaceta, 20 May 2007.
        “Argentina: Gas and Graft,” The Economist, 10 May 2007.
        “Argentina fires two in tax evasion, bribery probe,” Reuters, 17 May 2007;
        “Oyarbide indicts two former government officials,” Buenos Aires Herald, 18 December 2010.
        “Court dismisses charges in Skanska probe,” Buenos Aires Herald, 11 November 2011. 217
        
        2/3 of companies ignore corruption in the supply chain
    - - Move 1: The authors establish a research territory:
        
        (b) by introducing and reviewing items of previous research in the area (obligatory).
        
        (a) by showing that the general research area is important, central, interesting, problematic or relevant in some way (optional);
      - Move 3: They then occupy the niche by saying they are going to put this right:
        
        (a) by outlining the purposes or stating the nature of the present research (obligatory);
        
        (b) by listing research questions or hypotheses to be tested (optional);
        
        (c) by announcing the principal findings (optional).
      - Move 2: They then establish a ‘niche’ by indicating a weakness in the account so far:
        
        (a) by indicating a gap in the previous research, raising a question about it or extending previous knowledge in some way (obligatory)
      - my context: why I am the right person, in the right place to write this (Kindle book)
  - - - Contract T&Cs
        
        If the CO finds suspicious payments (to strange bank accounts, vg) made by his/her firm to the agent, then the firm can suspend payments and ask money back. (...se bem que isso pode nao evitar corrupcao...)
        
        Compliance Officer can insert in the contract with all intermediaries that an audit is always possible and can be performed with no reason.
        
        impose in the contracts that the intermediaries have to follow the CoE of the company.
      - CO should be present in all meetings/communications with intermediaries that present a certain level of redflags
      - All communication with company and intermediary should be recorded
      - Intermediary should deliver detailed report on the activities related to that contract to CO inclusively.
      - CO should become a co-manager of that contract between company and intermediary.
      - The intervention of the CO will then jeopardize the trust the intermediary may have to the company (or his contact person therein), as the CO has the power to interrupt, suspend payment, terminate the contract etc before the smallest infringement.
      - Cooperation Agreements
        
        Cooperation Agreements can be ineffective if the cooperating criminal fears for his life or of his close relatives. (in Russia, v.g.)
      - Certify Agents (Lambs, "Corrupt Intermediaries..." Springer)
      - Ilyer:
        Building additional contractual safeguards into the agreement, for example additional obligations with respect to internal controls or enhanced audit rights;
        Obtaining written certification from the individuals associated with the intermediary, recognizing their potential conflict of interest or the risk of bribery and corruption coupled with the individual undertaking to conduct themselves appropriately;
        Providing additional training to the intermediary and their staff on the organization’s Code of Conduct;
        Conducting due diligence prior to engaging the intermediary.
    - - communication
        
        start a deal
        
        blood relation/contact to PEP OR recommended by PEP # (or claims to have special influence on buyer); have political, social, familial or business ties to an official (Sayne, 2017, p.32)
        
        the intermediary helps the company arrange meetings with high level officials or other type of access that other companies competing for the award do not have (Sayne, 2017, p. 32)
        
        official suggests the intermediary (Ellis)
        
        appointed only for his connections or becaiuse of recommendation from official (Iyer)
        
        set-up a deal
        
        traffic on influence
        
        the interm. can only contribute "influence" (Iyer)
        
        trust / close friends
      - be detected by authorities
        
        id protection
        
        Ask for secrecy about him/herself or about other people #
        
        confidenciality
        
        insists on dealing with government official without the participation of the company. conducts private meetings with officials.
        
        insists that identity and the deal should remain confidential
      - money laundering
        
        money transfer
        
        price of contract between company and intermediary is above markets price (high commission or fees). Sometimes it may be hard to challenge this RFlag, as even some legitimate services might be hard to know the price of.
        
        vague scope (non-descriptive terms) of work in contracts between company an intermediary OR a contract which does not correspond to a tangible product or service
        
        Or the scope can be detailed, but the intermediate lacks capacity or resources to perform such services (Sayne 2017, p.32)
        
        Intermediary performs little if any substantive work. (sayne, 2017, p.32)
        
        Use of 3rd party bank account OR bank account located in a 3rd country #
        
        unusual or unusually complex payment patterns, including payment in cash, into offshore accounts, or accounts in different names or countries.
        
        invoices are not clear, contain mistakes, inconsistencies, with misleading documents etc
        
        screening reveals that intermediary is a shell company or has other unorthodox corporate structure.
        
        the intermediary lacks the technical expertise, experience, staff and facilities to perform the service. (Iyer) or is in a different line of business and lacks track records with product, service field or industry (Ellis)
        
        makes large political contributions (Ellis)
        
        requests payment in a jurisdiction that has not to do with the services, specially if the country is an offshore financial center. (Ellis)
      - encounter a defaulting counterparty
        
        enforcement of corrupt deal