On Tuesday, in an ostentatious raid, Federal Police simultaneously knocked at the door of the official residence of the governor of the state of Rio de Janeiro, Wilson Witzel, and 11 other locales. The Federal Prosecutor’s Office and the Federal Police alleged that Witzel ran a group that may have defrauded and embezzled money intended for field hospitals to fight the coronavirus pandemic in Rio. Witzel’s mobile phone and personal computer were seized.

The operations raised questions about the Federal Police being leveraged for political purposes, deepening the crises enveloping the country’s democratic institutions.

The suspicions were not without justification. The likely fraud was exposed by the reporting of an independent journalist; a higher court authorized the police raids; and the field hospitals are still not functioning at full capacity even after almost three months of the Covid-19 crisis in Brazil.

Yet the raid raised eyebrows: Witzel has become one of Bolsonaro’s two main conservative rivals on the national stage. What’s more, Bolsonaro is being investigated by the Supreme Court for political interference in the command of the very same Federal Police force that targeted Witzel — an allegation made by the president’s former justice minister, Sergio Moro, who resigned as a result of the row.

A day after questions arose about political influence on law enforcement following the raid on Witzel, the Federal Police, on orders from the Supreme Court, turned on Bolsonaro’s allies. The court had opened a controversial inquiry to investigate “fake news” about the court itself, setting up Federal Police actions against bloggers, social media influencers, and businessmen tied to Bolsonaro. While no one was arrested, the suspects’ banking and telecommunications confidentiality were lifted. The case will also involve politicians close to Bolsonaro testifying in court.

I Will Interfere. That’s It

Allegations around the Federal Police kicked into high gear in late April when Sergio Moro, then B0lsonaro’s minister of justice, claimed that the president sought an inappropriate level of control over the work of the Federal Police.

Moro was, in some ways, an unlikely high-profile Bolsonaro adversary. The former judge became a national celebrity in April 2018 when he sent former left-wing president Luiz Inácio Lula da Silva to prison as part of Operation Car Wash, a sweeping anti-corruption probe. Seven months later, Moro accepted Bolsonaro’s invitation to serve as justice minister and became one of the cornerstones of the far-right president’s administration. In 2019, The Intercept published a series of reports in Portuguese and English that cast light on the Operation Car Wash’s methods and political biases.

In April, Moro resigned amid claims that Bolsonaro wanted him to replace the Federal Police’s commander, creating a political furor. Moro said the president’s aims were political: Bolsonaro wanted to protect his sons and political allies, who are the targets of various police investigations. In the statement announcing his resignation, which was broadcast live on major news networks, Moro blamed Bolsonaro’s pressure for his decision. His words prompted an investigation at the Supreme Court.

In response to demands for evidence, Moro mentioned a ministerial meeting that took place days before his resignation and was recorded on video. The recording shocked Brazil when made public by the Supreme Court. Amid swearing and shouting — mostly by Bolsonaro himself — ministers in the meeting demanded the arrests of Supreme Court judges, governors, and mayors who were seen as obstacles to the administration. There was even mention of using the distraction caused by the coronavirus to push forward measures aimed at dismantling the legal framework that protects the Amazon and other natural resources.

Yet Bolsonaro stole the show. Among insults aimed at his political opponents — namely, Witzel and São Paulo governor, João Doria — he blurted out that Brazilians should be armed, ordered Moro to sign a decree increasing the allowed ammunition purchase limits as “a message to these pieces of shit,” referring to the governors and mayors. The decree was issued the following day.

Perhaps most notably, Bolsonaro was clear about his intentions for the Federal Police. He complained about the poor quality of the government’s intelligence reports and his personal security. The president didn’t specifically mention the police force, but it wasn’t necessary. “I will interfere,” he said, glaring in Moro’s direction. “That’s it.”

I Only Want One

With Moro out of the way, Bolsonaro went on to quickly change the Federal Police command. At first, he appointed an officer who attended parties held by one of his sons, Carlos Bolsonaro, who is being investigated in the fake news inquiry. Bolsonaro even publicly declared that his nominee was a personal friend. But the Supreme Court blocked the appointment, claiming it would do damage to the independence of the Federal Police. Upset by the decision, Bolsonaro initially signaled he would ignore the court, but eventually relented and appointed Rolando Alexandre de Souza, another police officer close to his administration.

As soon as Souza took over, he made changes to the regional command of the Federal Police’s Rio division. The moves could bring a measure of relief to the president. His eldest son, Flávio Bolsonaro, a Senator since 2018, is under investigation by the local and Federal Police in Rio for wage theft against his State Congress staff, as well as using the funds in schemes involving organized crime.

According to Moro’s testimony in the Supreme Court investigation, it was the same Rio division of the Federal Police investigating Flávio Bolsonaro that the president sought control over. “You control all the commands,” Bolsonaro told Moro, according to the former justice minister’s testimony. “I only want one, which is Rio’s.”

The new commander of the federal police in Rio took office on Monday, May 25. On Tuesday, the police raid showed up at Witzel’s front door. Witzel, a former judge who is new to politics and won as part of a wave of ultraconservative victories in 2018, was caught unawares.

Some of Bolsonaro’s allies, though, seemed to have foreknowledge of the impending raids. On Monday, Carla Zambelli, a member of Congress and one of Bolsonaro’s fiercest and closest defenders, said during a radio interview that “some governors are under investigation by the Federal Police” for crimes committed amid the fight against the pandemic. The same day, Eduardo Bolsonaro, himself a member of the Federal Police and a sitting member of Congress, suggested on his social media that an operation was looming.

The process that led to the raids came at record speed. piauí magazine reported that Attorney General Augusto Aras, another Bolsonaro appointee, issued the subpoenas against Witzel less than a week after he received records related to the inquiry. On Monday, hours before the raid on Witzel, Bolsonaro made an unannounced visit to Aras’s office. The same day, Zambelli and Eduardo Bolsonaro teased the operation.

Though the scandal surrounding Witzel is plausible — his wife’s business was the alleged recipient of large payments by the likely fraudsters — the prospect of interference by Bolsonaro offered him a scapegoat. Witzel told the press that Brazil is “governed by a leader who is politically persecuting those he considers to be the enemy,” adding that Bolsonaro is “a fascist.”

Witzel was not alone in casting doubt on the motives behind the raid. João Doria, the governor of São Paulo and another of Bolsonaro’s conservative rivals, expressed discomfort with the operation: “It hints at an authoritarian escalation that is worrying.”

The Court Strikes Back

For Bolsonaro, however, the more immediate threat may not come from allegations of politically motivated investigations. Indeed, even as Bolsonaro’s allies celebrated the raids against his political rivals on Monday, legal issues were looming for some of these same supporters. On Wednesday, several prominent Bolsonaro allies were targeted by the force in an inquiry led by the Supreme Court against fake news.

Proprietors of right-wing blogs, including some of the most influential ultra-conservative figures on the Brazilian internet, were targeted by search and seizure warrants. Their mobile phones and computers were seized. Although he was not a target, Carlos Bolsonaro, the president’s son, seems to be a figure in the investigation. Carlos is widely known as the informal chief of the “hate cabinet” — a nickname given to the presidential advisors that execute Bolsonaro’s strategy on social media — a group linked to some of the investigation’s targets.

 On Wednesday, several prominent Bolsonaro allies were targeted by the force in an inquiry led by the Supreme Court against fake news.

This inquiry is unique in the Brazilian legal system, one in which the Supreme Court investigates crimes and threats against its own members. The judge in charge, Alexandre de Moraes, was himself the target of the fake news operations he’s investigating and his peers may eventually be called to judge crimes of which they’re the victims. The peculiar and unprecedented nature of the investigation — which is not in itself illegal, but does take advantage of gaps in Brazilian law — raises questions about the impartiality of the court in the matter at hand, and even the specter of unaccountable authoritarian jurisprudence.

Nonetheless, the inquiry launched with Wednesday’s operation is set to ensnare even members of Congress. Zambelli, the member of Congress who publicly teased Tuesday’s raids, will have to testify. Businessmen with close ties to Bolsonaro will have their financial records scrutinized, among them Luciano Hang, the talkative owner of dozens of mega-stores. This could, in the end, put Bolsonaro’s campaign in reach of the investigation: Folha de S. Paulo newspaper reported almost a year ago that businessmen financed the distribution of content, at least partially based on fake news, in favor of Bolsonaro’s candidacy through WhatsApp, a popular messaging service in Brazil.

Perhaps the only major conservative political institution that has yet to weigh in on the recent fake news inquiry is the military. Retired military officials with links to Bolsonaro — including the retired army general who runs the Ministry of Defense — have from time to time publicly expressed their anger with court decisions they have seen as a blow to the president’s autonomy, which they view as a conduit for power. One such occasion was the Supreme Court’s veto of Bolsonaro’s choice to lead the police force.

Yet the military, like the Supreme Court itself, has been targeted by the far-right fake-news machine. Whenever retired military officials in the administration make decisions that seemed to displease the Bolsonaros, misinformation about them would percolate on the internet. So there were very few complaints from the barracks about the fake news inquiry.

But if the fake news inquiry begins to reach up into and threaten the Bolsonaro administration — which the military views as a conduit for its empowerment — that would quickly change. With things moving as quickly as they are in Brazil’s chaotic politics, that might be only a matter of days.

The post After a Fight Over Control of Brazil’s Federal Police, Raids Target Bolsonaro’s Political Rivals appeared first on The Intercept.

A source also confirmed to The Intercept that three other members of the delegation to Florida are showing flu-like symptoms, including fevers, though it is unclear what the results of coronavirus tests may be. The source, who has direct knowledge of the conditions of some members of the delegation that traveled with Bolsonaro to the U.S., asked for anonymity for fear of retaliation.

The Florida event brought together Trump, Bolsonaro, and several top Brazilian government officials.

A source also confirmed to The Intercept that three other members of the delegation to Florida are showing flu-like symptoms, including fevers.

The four Brazilians who fell ill — one confirmed and three possible cases — did not take tests in Miami. Instead, some members of the delegation with symptoms chose to return to Brazil to take the test in São Paulo, a move that went against recommendations of the World Health Organization. Bolsonaro was tested for coronavirus this Thursday and results are expected on Friday.

Wajngarten’s wife, publicist Sophie Wajngarten, confirmed her husband’s infection on a WhatsApp group for parents of the school attended by the couple’s children. The Intercept obtained a copy of the conversation from a source who asked not to be identified.

Brazil’s Palácio do Planalto, the president’s official office, also confirmed Wajngarten’s positive test. “The medical service of the Presidency of the Republic has adopted and is adopting all the necessary preventive measures to preserve the health of the president and of the entire presidential delegation that accompanied him on a recent official trip to the United States,” the Palácio do Planalto said in a statement.

The same day he returned to Brazil, Wanjgarten made a joke on Twitter about the possibility of contracting the illness in the U.S.

The president’s wife, Michelle Bolsonaro, and other government officials were also in the U.S., including, Minister of Foreign Affairs Ernesto Araújo; Minister of the Institutional Security Office former Gen. Augusto Heleno; Minister of Defense Fernando Azevedo e Silva; Minister of Mines and Energy Bento Albuquerque; Minister of Science, Technology and Communications Marcos Pontes; and Eduardo Bolsonaro, the president’s son who serves as a member of Congress. The entire group had contact with Wajngarten and, according to WHO recommendations, should be quarantined for 14 days to prevent the virus from spreading.

Wajngarten is at the center of one of the Bolsonaro government’s scandals, as reported by the daily newspaper Folha de São Paulo. A company owned by Wajngarten began to see a windfall from its contracts with pro-Bolsonaro television stations, thanks in part to an infusion of cash from the Secretariat of Communication, which Wajngarten himself runs. Despite the suspicions, Wajngarten was cleared of wrongdoing by Bolsonaro’s ethics council and kept in office.

A major political rally against the Congress and Judiciary — and in support of Bolsonaro — is scheduled to take place across Brazil on Sunday. Bolsonaro previously promoted the event via WhatsApp, but now denies having done so. As cases of coronavirus have increased in Brazil, Bolsonaro has downplayed the risks and organizers have so far refused to cancel the event.

The post Bolsonaro Aide Who Visited With Trump Tested Positive for Coronavirus — And Three Other Members of the Delegation Have Flu-Like Symptoms appeared first on The Intercept.

The documents — slide decks that were obtained by The Intercept — are circulating in an 11-slide summarized version and a 27-slide full version, both classified as “confidential.” The author is marked in the first slides of both presentations as the bank’s secretary, who is responsible for organizing discussions between the bank, governments, and private companies. The presentations, which are dated March 15, are addressed to executive directors of the Inter-American Development Bank and IDB Invest, the bank’s investment arm aimed at lending to private companies.

Founded in 1959, the IDB offers financing and technical assistance for infrastructure, health, and education projects in Latin America and the Caribbean. The bank is owned by 48 countries: 26 borrowing member countries and 22 nonborrowing member countries. Currently, the five largest shareholders are the U.S., with 30 percent of voting shares; Argentina and Brazil, with 11.2 percent each; Mexico, with 7.2 percent; and Japan, which has 5 percent of voting shares.

The improvements in Venezuelans’ daily lives would allow self-proclaimed interim president Juan Guaidó to claim a victory — by benefiting from international assistance that is being denied to the current leadership.

The dominant position of the U.S. has raised questions about the bank’s independence. Indeed, U.S. President Donald Trump’s aggressive stance on regime change helped urge IDB officials into pushing the analysis of a post-Maduro Venezuela, a source told The Intercept.

The Maduro regime has long claimed that the country’s economic collapse is the result of a capital crunch driven by sanctions and a coordinated financial assault by the United States for the purposes of undermining and overthrowing the socialist government. The emergence of the IDB-led plan will only heighten those suspicions.

The proposal for international largesse could be a boon to an incoming administration. If all went according to plan, the improvements in Venezuelans’ daily lives would allow opposition leader and self-proclaimed interim president Juan Guaidó, or another incoming president, to claim a victory — by benefiting from international assistance that is being denied to the current leadership. Meanwhile, Venezuela would be stripped of its public assets.

The IDB documents were supposed to have been presented at the IDB’s annual meeting from March 26 to 31 in Chengdu, China. Controversy erupted, however, because the IDB had invited Guiadó’s economic coordinator and IDB representative, Ricardo Hausmann. Beijing — the meeting’s host, a Maduro ally, and a minority 0.004 percent shareholder with the bank — has not recognized Guiadó’s rule and denied a visa to Hausmann, a Harvard University economist and Guiadó’s representative to the IDB. The turmoil caused the cancellation of the China meeting just days before it was set to occur.

Another source, an IDB insider, told The Intercept that inside the bank, regime change in Caracas is seen as a question of when, not if, and many believe that it will happen soon. Nonetheless, the urgency around the plan apparently faded after the highly publicized failure of a plan by Guaidó and allies to bring truckloads of “humanitarian aid” over the Colombian border. The bank leaders, the source said, had hoped that the convoy would help trigger Maduro’s downfall. Bank leaders have since become less optimistic that he will be removed from power in the near term.

Though the slide decks do not state where the money would come from, $48 billion in loans would likely be unprecedented in the IDB’s 60-year history. In response to an inquiry from The Intercept, a spokesperson for the IDB said, “While I have not seen the document you mention, by the size of the number, it probably refers to a much larger lending or assistance package involving many institutions, not just to IDB-financed operations. It is almost three times what the IDB approves in a single year.”

Two sources with direct knowledge of the proposal — one in the U.S. and one in Brazil — confirmed the authenticity of the documents, and a third source told The Intercept that the plan exists. All three sources requested anonymity to discuss the proposal because of fears of professional reprisal.

The Intercept is declining to publish the documents out of concerns over source protection.

A parallel business forum to the China summit — coordinated by IDB Invest, formerly known as the Inter-American Investment Corporation — was also canceled. CEOs of major companies had been invited to attend, including electrical giants such as the U.S.-based AES Corporation and Italy’s Terna; construction firms like South Korea’s DOHWA Engineering and Mexico’s ICA; and energy players like Colombia’s Terpel and Canadian Solar. (An IDB spokesperson told The Intercept that the 2019 annual meeting has not yet been rescheduled and that the business forum will no longer take place.)

In March, the IDB was the first multilateral international organization to recognize Guaidó as interim president, less than two months after Trump did.

Over the past several months, Hausmann has been making public remarks about the need for international loans and investments in Venezuela to spur its economic recovery in the wake of Maduro’s fall. Speaking to The Economist last January, he said Venezuela would need a loan in excess of $60 billion over three years. In another interview with the Harvard Gazette a few days later, Hausmann said the reconstruction effort would “involve international financial assistance, probably a significant program led by the International Monetary Fund.”

Hausmann’s involvement with Guaidó’s purported interim government suggests that he is optimistic about the collapse of Maduro’s government — a view that at this time has not yet been borne out by events.

On April 11, Hausmann spoke before an assembled group of international finance ministers brought together by U.S. Treasury Secretary Steve Mnuchin. “Today, the Ministers reviewed steps taken since January to increase financial pressure on the Maduro regime and additional steps to support the democratically elected National Assembly and Interim President Guaidó,” Mnuchin said in a statement. “The Ministers then discussed plans for future economic support of Venezuela. We welcomed to this discussion Dr. Ricardo Hausmann, whom Interim President Guaidó has designated as coordinator of his economic advisors.”

Mnuchin said after the meeting that $10 billion in international financing to spark trade would be made available to Venezuela once a new government came to power.

The oil factor has been crucial. Venezuela is home to the largest proven crude oil reserves in the world, which accounts for 92 percent of the government’s revenue. In 2011, oil was trading at over $100 per barrel but crashed in recent years. “Faced with declining external liquidity, the government has applied measures to ration hard currency and cut imports since 2013,” the full slide deck reads, noting that Venezuela produces only 25 percent of the food it needs.

Through the tragedy, the IDB sees a business “environment with opportunities,” particularly “abundant natural resources (minerals and oil)”; “commitment of support from the international community”; and a “resilient private sector committed to recovery.” The bank estimates that, with an annual investment of $14 billion, oil production could surpass 3 million barrels per day by 2029. By last December, the country was extracting 1.1 million barrels per day, according to data from the Organization Petroleum Exporting Countries.

The focus on ramping up oil production runs counter to many international institutions’ warnings about climate change. The United Nations Intergovernmental Panel on Climate Change has said the world economy has 12 years to move rapidly in the opposite direction — cutting down its reliance on fossil fuels.

Under current law, the Venezuelan state oil company PDVSA must have a majority stake in all oil projects, a hurdle to foreign investment.

The United States, for its part, has always been keenly interested in Venezuelan oil. “That’s the country we should be going to war with. They have all that oil and they’re right on our back door,” Trump reportedly said in a private conversation in 2017, according to a book by former Acting FBI Director Andrew McCabe. U.S. oil giants Exxon Mobil and ConocoPhillips filed billions in arbitration claims when Maduro’s predecessor Hugo Chávez expropriated their Venezuelan operations in 2007. If Maduro were to fall, it would offer an opportunity for them and others to re-enter the Venezuelan market.

The proposed infusion of cash laid out in the IDB plan would serve as a carrot to induce foreign governments and business leaders to support the U.S.-led push to overthrow Maduro.

Notably, the IDB documents obtained by The Intercept lay out what the bank calls “priority actions”: eliminating obstacles for private companies, financing international trade, and establishing new legislation to re-privatize government-owned companies.

The proposed infusion of cash laid out in the IDB plan would serve as a carrot to induce foreign governments and business leaders to support the U.S.-led push to overthrow Maduro. The plan calls for $4.5 billion in the first year to repair basic infrastructure, such as electricity, water supply, and transportation. The figures, the bank stresses, do not include “private investments in the oil and energy sectors.”

The infusion of capital would have three specific goals, the documents say: “stability,” with the normalization of food stocks and health and education services; “execution” of basic infrastructure repairs; and institutional reforms aimed at “reversing the brain drain.” Professionals have been fleeing the country in droves and a recent nationwide blackout was likely exacerbated by the exodus of expertise needed to keep basic government services running.

Although it includes $11.5 billion for humanitarian aid, such as food distribution to 25 million people and unconditional cash transfers to 17 million, the bulk of the plan is based on the well-known neoliberal prescription adopted throughout Latin America during the 1980s and 1990s, with dubious results.

The subsidies and direct support — even on electricity and basic sanitation — in the IDB proposal could help a new government gain popular support and alleviate suffering during a crucial transitional period. But the subsidies and direct support funding would be cut dramatically over the course of four years.

The deepest changes in the economy would come only in the medium- and long-term. In a slide titled “What can be done in the energy sector?” the IDB proposes legislative reforms to open the electricity market to the private sector within the first 12 months following regime change, to be followed by public-private partnerships (“key to financing,” in the words of the bank), rate revisions (frozen since 2002), and only targeted subsidies.

Among the “urgent priorities for public administration,” the bank’s proposal demands steps such as “a budget law,” “recovering the capacity to generate statistics for policy formulation,” and “mechanisms for the gradual dismantling of electricity, water, gasoline, and public transportation subsidies.”

According to the IDB’s 2018 financial statement, the Venezuelan government has been considered to be in default since last May. Currently, $233 million in loans are in arrears. Since 2012, the bank has not made any new deals with Caracas and since 2017, all loan disbursements have stopped.

The post Secret IDB Proposal Would Give $48 Billion Infusion to Boost Venezuela’s Economy — but Only After Regime Change appeared first on The Intercept.