You’ve seen the Olympics, now read the book… Alex Cuadros (pictured), a Portuguese-speaking American journalist who spent years covering the South American billionaire beat for Bloomberg, has compiled some of his insights, observations and other material into a book on Brazil’s ultra-wealthy. David Roberts has a read…
Earlier this year, the attention of the world was focused on Brazil, as the high drama of the XXXI Olympiad unfolded. Despite the predictions of assorted doom-mongers, the Games turned out to be largely successful, and although the crowds weren’t as large as many had hoped they’d be, Rio de Janeiro’s tourism industry is presumed to have benefited from endless hours of footage of sparkling beaches, manicured parks and well-swept streets, with barely a favela to be seen.
To the watching world, it would appear that Brazil had at least most of the ingredients needed to be a successful, harmonious, advanced economy and society.
However, that promise has never actually been realised. In 1941, Stefan Zweig declared that Brazil was the country of the future; Brazilians joke that it always will be.
Why is this? In a fast-paced, revealing and entertaining account of a country in turmoil – (former president Dilma Rouseff was impeached and forced out of office at the end of August, following two separate corruption investigations) – Alex Cuadros charts the rise and fall of tycoon Eike Batista, as a springboard for a wider examination of some of the reasons for Brazil’s chronic under-achievement.
In 2012, Eike Batista was the eighth-richest man in the world, according to Forbes, with a fortune of US$30bn derived from his country’s boundless natural resources. A year later he had lost it all, and was embroiled in scandal.
In this book, Cuadros details the vertiginous rise and fall of “Eike”, as he is universally known to his compatriots, and a colourful tale it is, too.
The interlocking interests of politicians, public utilities’ bosses and mega-wealthy chancers – always with the whiff of corruption – are exposed in deal after deal.
From the grandiose port project of Acu (planned to be the size of Manhattan) to the potentially environmentally disastrous Belo Monte dam, the two oldest routes to wealth in Brazil – politics and public contracts – are evident.
As Cuadros says, “Progress never came unencumbered here. Mixed up in the quest for national development, I would find a history of accumulation through exorbitant transfers of taxpayer money, outright theft, and even torture. It’s a contradiction at the heart of Brazil’s ambitions.”
But it is not just the multi-billion dollar deals that are open to scrutiny: greasing the wheels is part of everyday survival for all Brazilians. “Paying a small bribe to pass your driving test is so normal, officials don’t even lower their voice when presenting you with the option,” writes the author.
Alex Cuadros is a freelance journalist and writer based in São Paulo who clearly knows his adopted land very well, and has a true affection for it. He is, as well, clearly frustrated by the failure of Brazil’s establishment to deliver stability and prosperity to all, in the midst of apparent plenty.
As Eike’s fortune collapsed, the indictments followed: over the course of 2014, prosecutors produced three separate indictments, charging him with manipulating the market, false representation, misleading investors, conspiracy and three counts of insider trading. On top of this, Brazil’s internal revenue service fined Eike US$85m for allegedly evading capital gains taxes.
As the trial got under way, an extraordinary development threatened to make sure that, as we are told a Brazilian expression for an amicable settlement to any dispute would put it, it would “all end in pizza”.
The judge in the case, one Flavio Souza, ordered the seizure of some of Eike’s assets, arguing that this was necessary to secure payment in the event that the defendant was found guilty. Among other things, court police took a piano and several cars belonging to the defendant into safekeeping. The judge then set a date for auctioning off Eike’s property.
Then, two days before the auction, Eike’s white Porsche Cayenne was spotted in the garage of Souza’s apartment building, and the judge was photographed driving the Porsche to work. He claimed that he’d taken the car home because he didn’t want it damaged by the elements in the impound lot, but it soon emerged that he’d taken another of the ex-billionaire’s cars home, too, as well as his piano, which he’d put in a neighbour’s flat.
As a result of this bizarre behaviour, Souza was removed from the case, which is currently on hold.
Cuadros sees some cause for optimism following recent high-profile arrests of politicians and businessmen on assorted corruption charges.
Meanwhile, this lively, entertaining and absorbing account will make readers hope the author’s optimism is well-founded.
Godfathers of Modern Brazil
By Alex Cuadros
Profile Books Ltd, 348 pp
List price UK: £10.99
This review was originally published in the October issue of International Investment magazine.