LATIN AMERICA ADVISOR
www.thedialogue.org
BOARD OF ADVISORS
Diego Arria
Director, Columbus Group
Merike Blofield
Professor of Political Science,
University of Hamburg
Devry Boughner Vorwerk
CEO, DevryBV Sustainable Strategies
Joyce Chang
Global Head of Research,
JPMorgan Chase & Co.
Marlene Fernández
Corporate Vice President for
Government Relations,
Arcos Dorados (McDonald’s)

A DAILY PUBLICATION OF THE DIALOGUEFEATURED Q&A

How Well Is Brazil’s
Government
Fighting Graft?

Peter Hakim
President Emeritus,
Inter-American Dialogue

Barbara Kotschwar
Professor of Political Economy,
Georgetown University
John Maisto
Director, U.S. Education
Finance Group
Nicolás Mariscal
Chairman,
Grupo Marhnos
Thomas F. McLarty III
Chairman,
McLarty Associates
Beatrice Rangel
Director,
AMLA Consulting LLC
Ernesto Revilla
Head of Latin American
Economics, Citi
Gustavo Roosen
President,
IESA
Andrés Rozental
President, Rozental &Asociados
Shelly Shetty
Managing Director, Sovereigns
Fitch Ratings

POLITICALAt Least Six Killedas Hurricane Beryl
Tears Through
Caribbean
At least six people have been
killed as Hurricane Beryl raked thesoutheastern Caribbean. The powerful Category 4 story is expected
to hit Jamaica today.

BUSINESSCVR Energy
Submits Bid in
Citgo Auction

Jon E. HuenemannCouncil Member,
GLG Inc.

Craig A. Kelly
Senior Director,
Int’l Gov’t Relations, Exxon Mobil

TODAY’S NEWS

Page 2

Donna Hrinak
Director,
Adtalem Global Education

James R. Jones
Chairman,
Monarch Global Strategies

Wednesday, July 3, 2024

Brazil’s supreme court has recently overturned convictions in prominent corruption cases. //File Photo: Everton137 via Creative Commons.

Q

In cases related to Brazil’s sprawling “Car Wash” corruption
probe, the country’s supreme court in May overturned convictions against left-wing politician José Dirceu. One of thecourt’s justices, Dias Toffoli, also annulled rulings against
industrialist Marcelo Odebrecht. People targeted in the investigation,
which began a decade ago, have accused authorities of improprieties,
while critics of decisions to overturn convictions say the moves are returning the country to impunity. What is behind recent orders to overturn
Car Wash convictions? How strongly is the government of President Luiz
Inácio Lula da Silva, who himself was convicted of corruption in 2017
and spent more than a year in jail, fighting graft? To what extent do therecent quashing of Car Wash convictions create a permissible environment for corruption, as critics have said?

A

Alfredo Attié, justice at the Supreme Court of São Paulo:“During its first and long spell in power, the Workers’ Party
was responsible for significant changes in Brazilian law,which enabled the autonomy of public administration control
institutions to put an end to the way in which traditional elites appropriated and exercised power. However, as mechanisms of control of theseautonomous institutions were absent, the controversial effectiveness of
their actions led to disfiguring the rule of law and undermining democratic
principles. A difficult period followed, not only for President Lula da Silva,
in his personal ordeal, but it was equally traumatizing for society, which
faced an attempted anti-democratic coup. It was also difficult for the
judiciary, which is now trying to redeem itself for the mistakes that wereContinued on page 3

COPYRIGHT © 2024, INTER-AMERICAN DIALOGUE

U.S.-based oil refiner CVR Energy,
which is controlled by billionaire Carl Icahn, has reportedly
submitted a binding offer for
shares of Venezuela-owned Citgo
Petroleum.
Page 2ECONOMIC

Europe’s Energy
Chief Visiting
Chile, Argentina
The European Commission’scommissioner for energy, Kadri
Simson, is visiting Chile andArgentina this week in order tostrengthen cooperation on energy
issues.
Page 3

Simson // File Photo: European
Commission.

PAGE 1LATIN AMERICA ADVISORPOLITICAL NEWSAt Least Six Killedas Hurricane Tears
Through Caribbean
At least six people have been killed as Hurricane Beryl, a powerful Category 4 storm, tore
through the southeastern Caribbean and istaking aim today at Jamaica, the AssociatedPress reported. Three people were killed on
the islands of Grenada and Carriacou, and one
other person was killed in St. Vincent and the
Grenadines. Two other people were killed innorthern Venezuela, where five people remain
missing, the AP reported. The islands of Carriacou and Petite Martinique sustained heavy
damage, with scores of homes and businesses
destroyed in Carriacou, according to Kerryne
James, Grenada’s environment minister,
the AP reported. Grenada’s prime minister,
Dickon Mitchell, reported power outages andimpassable roads and said a rising death toll“remains a grim reality,” the AP reported. The
prime minister of St. Vincent and the Grenadines, Ralph Gonsalves, vowed to rebuild. He
said 90 percent of the homes on the country’s
Union Island were destroyed and added thathe expected “similar levels of devastation” on
the islands of Myreau and Canouan, the AP
reported. As of 8 a.m. Eastern Time today, thestorm was located about 125 miles southeastof Jamaica’s capital, Kingston, and was moving
west-northwest at 20 miles an hour, according
to an advisory from the U.S. National Hurricane
Center. The advisory said the storm has maximum sustained winds of 145 miles an hour.
Beryl is expected to “bring hurricane conditions
to Jamaica by midday today with life-threatening winds and storm surge,” the advisory
said. It added that the hurricane is expected
to approach the Cayman Islands tonight and

SUBSCRIBER NOTICEThe Latin America Advisor will not be
published on Thursday, July 4 inobservance of the Independence Day
holiday in the United States. We will
resume publishing on Friday, July 5.

Wednesday, July 3, 2024
into Thursday. A hurricane warning is in effectfor Jamaica, Grand Cayman, Little Cayman andCayman Brac, the advisory said.

BUSINESS NEWS

Icahn’s CVR Energy
Submits Bid in
Citgo Share Auction
CVR Energy, an oil refiner that is controlled
by billionaire Carl Icahn, has submitted abinding offer for shares of Venezuela-owned
Citgo Petroleum, Reuters reported Tuesday,
citing three people with knowledge of thematter. CVR, which is headquartered in Sugar
Land, Tex., operates two refineries in the
United States, one with a capacity of 115,000
barrels per day in Coffeyville, Kan., and the
75,000-barrel-per day Wynnewood refinery in
Oklahoma, the wire service reported. CVR’s
refineries would complement Citgo’s refineries
in Louisiana, Texas and Illinois, according to aperson familiar with the bid, Reuters reported. Icahn controls approximately 66 percentof the shares of CVR. A court in Delaware is
auctioning the shares in Citgo in order to pay
creditors who have claims amounting to $21.3
billion against Venezuela in connection withappropriations and defaults, the wire service
reported. The court has accepted bids not only
from CVR but also from trading company Vitol
and others, Reuters reported. Elliott Investment
Management is also considering a bid, and agroup of creditors represented by Centerview
Partners wants to convince ConocoPhillips tobe part of another offer, people familiar withthe matter told Reuters. CVR is seeking toraise financing for the bid and is working with
Wells Fargo, the wire service reported. Icahn
Enterprises is supporting CVR in the offer. A
court officer’s representative said Tuesday thatthe second bidding round for Citgo shares was“successful” and that several competitive bids
were received. The court’s special master is
expected to announce the winning bid to theinvolved parties on around July 31, Reuters reported. U.S. District Judge Leonard Stark, who

COPYRIGHT © 2024, INTER-AMERICAN DIALOGUE

NEWS BRIEFS

Two Russian Ships
Dock in Venezuela
After Visiting Cuba
Two Russian naval ships docked on Tuesday in
Venezuela’s port of La Guaira, the AssociatedPress reported. The visit of the ships, intended
to show the close relationship between Moscow and Caracas, earlier performed exercises
in other parts in the Atlantic, including an initialstopover in Cuba. The frigate and oil tanker arepart of Russia’s Northern Fleet. [Editor’s note:See related Q&A in Tuesday’s Advisor.]

Brazil Puts Meta’s New
Privacy Policy on Hold
Brazil’s National Data Protection Authority(ANDP) on Tuesday suspended, with immediate
effect, Meta’s recently launched privacy policythat utilizes personal data to train generative
artificial intelligence systems, Reuters reported. Brazil’s official gazette published ANDP’s
preventative measure, which also sets a dailyfine of 50,000 reais ($8,837) in the event of
non-compliance. The measure puts on hold theprocessing of personal data across all Meta
products. That includes the data of individuals
who are not users of the company’s platforms.

Former Chairman ofPeru’s Credicorp to Testify
in Keiko Fujimori Trial
Dionisio Romero Paoletti, a former chairmanof Peru’s largest bank, Credicorp, will testify
in the trial of former lawmaker and three-timepresidential candidate Keiko Fujimori, a prosecutor said Tuesday, Bloomberg News reported.
Fujimori stands accused of the launderingof contributions from Credicorp and otherlarge companies to finance her campaigns forpresident in 2011 and 2016. The case against
Fujimori, the daughter of disgraced former
President Alberto Fujimori, is expected to lastyears. She has denied wrongdoing.

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LATIN AMERICA ADVISOR
is overseeing the case, on Tuesday approved
a motion to delay the final hearing in the caseto Sept. 19. The special master, Robert Pincus,
had requested the postponement, Bloomberg
News reported. Venezuelan President Nicolás
Maduro has threatened legal action against
any company that acquires shares of Citgo, thenews service reported. The South Americancountry’s opposition has been lobbying theadministration of U.S. President Joe Biden todelay the auction until after Venezuela’s presidential election on July 28.

ECONOMIC NEWS

Europe’s Energy
Chief Visiting
Chile, Argentina
The European Commission’s commissioner
for energy, Kadri Simson, is visiting Chile andArgentina this week in order to strengthen
cooperation on energy, particularly renewables
and hydrogen, the European Commission said
Monday in a statement. In Chile, Simson met
Tuesday with Energy Minister Diego Pardow
and José Miguel Benavente, the executive vicepresident of the Chilean Economic Development Agency. She also met with the executive
secretary of the Economic Commission for
Latin America and the Caribbean, José ManuelSalázar-Xirinachs. While visiting Chile, Simson
is also visiting local energy projects, including
the Smart Energy Monitoring Initiative forpublic buildings, which has funding from theEuroclima program, the European Commission
said. She is also visiting an E.U.-funded projectthat involves the use of solar panels for energy
consumption at a winery. In Buenos Aires, Simson will serve as co-chair of the E.U.-Argentina
High-Level Energy Dialogue, which will also be
co-chaired by Energy Minister Eduardo Rodríguez Chirillo, the European Commission said.
She also plans to meet with Argentine Finance
Minister Luis Caputo, Foreign Affairs Minister
Diana Mondino and is to visit the Sustenta-Vitis
sustainability project, the European Commission added.

Wednesday, July 3, 2024
F E A T U R E D Q & A / Continued from page 1

committed. The recent decisions that overturned Car Wash convictions and rescued
companies previously involved in acts ofcorruption must be interpreted in the light ofthat context. Meanwhile, the political agenda
has changed from corruption to public safety, and fighting graft became more cautious,
granting fewer electoral gains. If the lessons
arising from the excesses or illegalities ofthe previous experience are well understood,society should strengthen the mechanismsof control of judicial institutions, enabling
judicial decisions to achieve greater
reliability. It does not mean a setback in theimplementation of constitutional values.
However, it is also necessary to invest morein the education of lawyers. Above all, it isnecessary to emphasize the teachings of theconnection of democracy to the rule of law
in law schools.”

A

Patrick Duddy, senior advisor
for global affairs at Duke University, former U.S. ambassador
to Venezuela and former U.S.
consul general in São Paulo: “Recent court
decisions in Brazil overturning earlier Operação Lava Jato (Car Wash) convictions offormer minister José Dirceu and industrialist
Marcelo Odebrecht are unlikely to change
public perceptions in Brazil. If anything,these reversals seem likely to exacerbate
the deep divisions that already exist. There
are several reasons. First, many Workers’
Party (PT) faithful still believe the Lava Jato
prosecutions were primarily an attack on the
PT. Dirceu, in particular, is an emblematic
figure for both the left and the right in Brazil.
Overturning his conviction, as well as thatof Odebrecht, is therefore seen as validating
the view of many PT supporters that theLava Jato was as much a political campaign
as an effort to combat corruption. The reversals in these two cases were not based on
new evidence or even a new understandingof the facts on which the original convictions were based. Rather, they were basedon procedural questions. In essence, the

COPYRIGHT © 2024, INTER-AMERICAN DIALOGUE

judges threw out the convictions for investigative misconduct, prosecutorial errors andinappropriate sentencing—which is not thesame thing as exonerating those previously
convicted. Predictably and unsurprisingly,
critics of President Lula and the PT have reacted with indignation. For them, the court’s
actions seem undeniably political andaligned with the PT’s interests. Although noevidence has emerged of executive branchpressure on the justices, much less ofcollusion, critics nevertheless see in thesedecisions evidence of the PT’s dangerous
willingness to delegitimize prior corruption
investigations of the party and whitewash
the consequences of earlier scandals. The
overturning of these convictions—alongwith earlier decisions invalidating evidence
and canceling and/or reducing fine—has
tarnished the reputation of Operação Lava
Jato as an exemplary, courageous and overdue campaign against Brazilian corruption.
For critics of the current administration in
Brasília, it has also undermined confidence
in the impartiality of the court. Reactions todate have been largely along partisan lines,
and it remains to be seen whether the voting
public will hold the PT to account in future
elections.”A

Cecília Godoy, analyst at
FrontierView: “While Toffoli’s
recent decisions to overturnthe conviction against José
Dirceu and annul the rulings against Marcelo
Odebrecht represent another—and perhaps
final—nail in the coffin of Operation Car
Wash, the dismantling of anti-corruption
efforts has been a longstanding and bipartisan issue in Brazil. In 2017, then-President
Michel Temer pardoned nonviolent corruption offenders who had served only one-fifthof their sentences. In 2021, his successor,
Jair Bolsonaro, disbanded the Car Washtask force entirely, claiming that corruption
had been eradicated across his government.
Therefore, Toffoli’s recent rulings indicatethat the capriciousness and backtracking
Continued on page 4

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LATIN AMERICA ADVISOR

Wednesday, July 3, 2024

LATIN AMERICA ADVISORF E A T U R E D Q & A / Continued from page 3of anti-corruption efforts will likely notsee any significant improvement during
President Lula’s third term. While President
Lula aims to launch a more comprehensive
anti-corruption plan later this year, the abilityof his administration to address potential
corruption allegations remains precarious,
especially as Brazil looks to revamp several
state-led industrialization programs—suchas the Growth Acceleration Program—whose
legacy became associated with funnelingmoney to state-owned enterprises later
compromised in corruption schemes.
However, the key difference perhaps lies in
the public’s perception of the role and abilityof Brazil’s Supreme Court to issue decisions
on the matter. At a time when the Supreme
Court’s integrity has already been significantly tarnished by continued attacks from thecountry’s far-right bloc, Toffoli’s unilateralrulings—he remains one of President Lula’sSupreme Court appointees from 2009—castfurther doubt on the credibility of the judiciary to exercise due process in efforts to stifle
corruption.”A

Joel Korn, president of WKI
Brasil and senior international
partner at UPITE Consulting
Services: “Recent developments
and ongoing actions to review legal decisions in connection with the unprecedented‘Car Wash’ investigation on corruption
practices, which entailed over 1,400 arrest
warrants and more than 500 indictments,
have been politically driven by challenging

the impartiality of the legal process andintegrity of the prosecution. This is being
accomplished through a concerted plan todismantle the results achieved within the
judiciary, through controversial technicalities
that might not have been followed in thecourse of the legal proceedings, thus paving
the way for nullifying proven evidence offraudulent actions and money laundering,and ultimately leading to the overturning ofconvictions through monocratic decisions
at the supreme court. Moreover, previous
agreements involving legal monetary settlements are under revision and disciplinary
actions are being carried out by the Superior
Court of Justice against prosecutors andjudges involved in ‘Car Wash’ cases. Even
though the recent decisions have been far
from consensual within the Brazilian judiciary, the virtual dismantling of such robust andglobally visible investigations with cross-border implications involving even heads ofstate in neighboring countries, signals a
blow to the confidence level of anti-corruption measures. In turn, to counteract thisnegative perception and its effects on the
country’s domestic and international image,it is incumbent that the administration
enforce actions for effective implementationof ethical values and standards, along withstrict disciplinary measures to hinder corruptive practices.”
The Advisor welcomes comments on its
Q&A section. Readers can write editor Gene
Kuleta.

LATIN AMERICA ADVISOR

Financial
Services Advisor
The answers to questions that informed
executives are asking.
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is published every business day by theInter-American Dialogue ISSN 2163-7962
Gene Kuleta
EditorCarl David Goette-Luciak
Reporter
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ReporterRebecca Bill Chavez, President
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Joan Caivano, Senior Advisor
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Ariel Fiszbein, Director, Education Program
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Peter Hakim, President Emeritus & Senior Fellow
Selina Ho, Nonresident Senior Fellow
Edison Lanza, Nonresident Senior Fellow
Nora Lustig, Nonresident Senior Fellow
Michael Matera, Nonresident Senior FellowÁngel Melguizo, Nonresident Senior Fellow
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and Climate Program
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Lisa Viscidi, Nonresident Senior Fellow
Carlos Winograd, Nonresident Senior Fellow
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