Pepper: HSBC may have the biggest corruption scheme in the world.

by Hylda Cavalcanti, from Current Brazil Network 

Brasilia – It was in the third week of January that Congressman Paulo Pimenta (PT-RS) – a parliamentarian beginning his third term, but who hasn't abandoned his journalistic habits – discovered that the scandal of accounts irregularly opened by HSBC clients in Switzerland was being investigated in several countries. Following the details of the case, he learned that there were Brazilian names among the account holders and began his own investigations. Pimenta recounted this afternoon, during an interview with RBA, that on the 11th, even before journalists had access to the news, he was already working on the case.

First, his office prepared a more detailed report. Then, with the documents in hand and after contacting several international figures, he requested a meeting with the Minister of Justice, José Eduardo Cardozo, and was granted one on the 11th. He delivered the material to Cardozo, requested action from the Brazilian government to participate in the investigation with the competent bodies, and two days later, formally filed the request.

Only on Monday (16) did he file the request with the Attorney General's Office (PGR) requesting an investigation into the case and that the body have access to the list which includes between 6.700 and 8.500 names of Brazilians who laundered or evaded money abroad through HSBC, in addition to requesting the disclosure of the list. It was only then, according to him, that the news began to be disseminated in parallel by journalist Fernando Rodrigues through the International Consortium of Investigative Journalists (ICIJ), on the UOL website.

“Here in the office, we are all journalists (the advisors on his team in the Chamber) and we have been working on this for a few weeks. I still think that until a few days ago, people (Brazilian journalists) still didn't grasp the magnitude of this case,” he stated, referring to the issue as what could become “the biggest corruption scheme in the world ever detected.”

Meetings

Paulo Pimenta will discuss the matter with other parliamentarians during a meeting already scheduled by the PT caucus next Monday (23), at 18 pm, in Congress. He also has a hearing next week with representatives, in Brazil, of the international organization that is investigating the case here. And he has maintained periodic contact with US Senator Elisabeth Warren, one of the first to denounce the scheme, with whom he has communicated from the beginning and whose exchange of information has been constant.

Besides the senator, the Attorney General's Office, and international investigative bodies, her contact list also includes activists involved in seeking more detailed information about HSBC in France and England. “I think like this: we first need to have a list with all the names of Brazilians to investigate what happened. If the accounts are not declared to the Federal Revenue Service, we have two crimes: currency evasion and tax evasion. And from then on, we will have to investigate the origin of this money,” she emphasized, explaining that the bank offered, from Brazil, the opening of an account in Switzerland so that the deposit could be made there.

Regarding the timid way in which the mainstream media has reported the news in recent days, avoiding disclosing the names of those involved in the list in their entirety, the parliamentarian pointed out that if one observes any newspaper in the world today, the subject is on the front pages, with the exception of Brazilian media outlets. "This happens due to the uncertainty of what they might discover in an investigation whose scope is still unknown. Therefore, it's not suitable for the major media outlets," he opined.

Car Transfers & Spanish DGT (DMV/DVLA)

The accounts under investigation were opened between the late 1990s and 2007. It is expected that these account holders moved approximately US$7 billion in a currency evasion scheme covered up by the financial institution. "This could bring to light individuals with diverse connections. It could involve schemes related to arms trafficking, drug trafficking, and major corruption cases in many countries," he added.

Regarding the investigation that the Attorney General's Office recently requested be initiated, and the criticisms released today about the slow pace of filing charges against politicians involved in Operation Lava Jato by the agency – which has led to speculation that this case will have the same sluggish progress observed in relation to the scandal involving Petrobras – Paulo Pimenta believes that, in due time, both the Ministry of Justice and the Attorney General's Office will take care of the investigation.

He said he is not afraid that the list will be hidden due to pressure from figures in the financial market and politicians interested in omitting the account holders because, in his view, there is no way the matter can be ignored. “At some point this list will appear, I'm not worried about that. If it's not released here in Brazil, it will be in some other country and we will get to all the names. There is a worldwide movement to have the account holders revealed and I don't see how this can be blocked anymore, because it comes from several countries and the indignation about the case is immense,” he emphasized.

Access

The congressman stressed that he is not bothered by the way some media outlets are avoiding disclosing the names. UOL, for example, informed its readers that it will only mention in its articles about the case names that are related to companies or entities that "have public and therefore journalistic interest," or those for which it can be "proven that there is an infraction related to the money deposited in HSBC in Switzerland."

“This criterion is strange because one thing we already know is that these people are rich. And that there is a very high chance that they are tax evaders. But if these media outlets don't want to publish all the names now, that's fine. We want access to everything, and that will be done and published as soon as we get the complete list,” he emphasized.

“That’s why we insist on access to the entire list: to avoid choosing which names are worth disclosing and leaving others out. Selective disclosure is bad for everyone because this scandal will allow us to better understand and end this large corruption scheme, as well as the source of the money and where it circulated. The clarifications tend to reveal other connections, made by more banks that may also have acted as international money laundering operations,” he stressed.

'Hypocrisy'

When questioned about how this and other currently observed cases point to the need for a change in the vectors of income concentration and the fight against inequality in the country, Pimenta cited the importance of re-discussing legislation on large fortunes and the transfer of large sums of money to tax havens, including to uncover enormous networks linked to organized crime.

“This case exposes a bit of the hypocrisy of sectors of a supposed Brazilian conservative elite that finds euphemisms to differentiate theft from tax evasion, that criticizes the Bolsa Família program, but finds ways to get their money to Switzerland to avoid paying taxes,” he stressed. It is in this obstinate fight that the parliamentarian is betting, and to which he intends to dedicate his next few days, alongside colleagues with whom he will debate the topic next Monday.

Information published by Carta Capital magazine mentions some names on the list of Brazilian account holders already cited outside the country: Edmond Safra, several members of the Steinbruch family, Pedro Barusco, Júlio Faerman, Henrique Raul Srour, Raul Sabbá, Chaim Zalcberg, Augusto Ribeiro de Mendonça, and Paulo Chiele.