Brazilian meat exporter involved in nationwide corruption scandal

Brazilian meat exporter involved in nationwide corruption scandal

A Brazilian businessman, Joesley Batista, one of the two brothers who owns JBS, one of the largest meat processing companies in the world with a net income of US$57 billion, has emerged as a key player in a long running corruption scandal that now threatens to engulf the Brazilian president Michel Temer.

With 14 million unemployed amid the worst recession in its history, which has seen GDP per capita fall 9.1% between 2014 and 2016, Brazil is experiencing serious political and economic crises. Accusations of corruption and the arrest 198 politicians and businessmen as part of Operation Carwash revealed the overbilling of contracts with state-owned energy company Petrobras. In return, the enterprises “won” public tenders. This has already led to the impeachment of the former president Dilma Rousseff, leader of the Brazilian Workers’ Party (PT) and could now topple President Temer.

The 45-year old Batista, who never graduated from secondary school having worked alongside his brothers since the age of 14 for his father’s meat business in the interior state of Goiás, is the key to President Temer’s current difficulties. In 1970 his father opened his first meat freezing plant, which is now a subsidiary of J&F investments. One of the first moves that allowed the Batista family to prosper was the forgiving of a tax debt. The second came under the government of former president Lula da Silva, of the Worker’s Party (PT), during which time they received a number of loans from Brazil’s national economic and social development bank (BNDES).

Batista has revealed to prosecutors that he used to negotiate money for political support directly with former treasury minister Guido Mantenga, who served under the Lula and Rousseff governments. By his own admission, Batista also says he set up a meeting with Temer and managed to secretly record their conversation. In a move resembling a James Bond film plot, the meat magnate entered the official residence under a fictitious name, met with Temer in a basement room and switched on a concealed recording device.

During their conversation, Batista agreed with President Temer that the government, through a public agency, would assist JBS in a court case against the group over one of its thermoelectric power plants. When the businessman asked who the intermediary should be to resolve the problem, the president recommended one of his closest aides: Rodrigo Rocha Lourdes. “Can I tell him everything?” Batista asked, “Everything,” Temer replied.

Rocha Lourdes was arrested a week ago last Saturday for corruption. The congressman was filmed by federal police carrying a suitcase full of money, which was believed to be the first part of a US$155,000 bribe agreed with JBS that would be paid monthly to “facilitate” the resolution of the case brought by a federal agency.

The filming of the president’s aide already forms part of Joesley, and his borther Wesley, Batista’s denouncement against the president before the Attorney General. By taking the decision to record the president and deliver it to the authorities, Joesley seems to be seeking absolution for a number of crimes committed during his 20 years as head of JBS, most recently the bribing of food safety inspectors to approve the sale and export of contaminated beef. Joesley and his family have moved to New York and re negotiating the payment of US$3.7 billion to public coffers.

Meanwhile, the president is working overtime to maintain his office. His fate will be decided by one of four possible alternatives: either he resigns, the election he won in 2014 as vice-president is annulled, he is impeached, or the federal attorney general denounces him to the federal supreme court because there is sufficient evidence to incriminate him. According to the Brazilian constitution, the first three cases would involve an indirect vote to take place in the Brazilian parliament before the direct elections scheduled for 2018. In the last case, Temer would be replaced by the speaker of the lower house.

JBS is an old acquaintance of the Chinese. Of the US$13.9 billion exported by the company last year, 20.1% went to China. Even though the percentage was smaller the previous year (17.6%) the value of exports was greater, worth US$ 15.4 billion. The company exports raw poultry, pork, and beef to China. In addition to exporting meat to the Chinese, JBS has commercial offices for JBS Couros on Chinese soil in Dongguan and Hong Kong. JBS declined to provide more information about these offices. The company also produces and exports leather for the automotive, furniture, and footwear sectors. It states that it prioritises adding value to its products by investing in technology and standardising procedures and quality.

 

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