Italy's Enron

Parmalat's Brazil Connection

One of the countries hardest hit by the Parmalat scandal is Brazil, where Parmalat was a large employer and major buyer of local milk. Investigators are now looking into whether Brazil-based subsidiaries may have laundered money for the Italian dairy firm.

Aftershocks Felt in Brazil
Parmalat...continues to be a scandal with serious repercussions in Brazil, especially in Rio de Janeiro....There is no lack of interest in the press in the subject of the magnitude of the problem, which has two points. First, small dairy producers depend on Parmalat to honor their contracts. The second point involves the ties this international company had with its representatives in Brazil—hypothetically situating them here to launder money for Italy.
—Octavio Mello Alvarenga, O Globo (centrist), Rio de Janeiro, Jan. 15, 2004

Milk Producers Hung Out to Dry
Six thousand employees of Parmalat Brasil are surprised and apprehensive, fearful of losing their jobs....Everyone was caught without an umbrella in this massive Italian torrent.....For now, the case is a black hole. It is incomprehensible to the small milk producers in Brazil who eat and sleep based on the earnings they receive from Parmalat.
—Célia Chaim, Istoé (liberal newsmagazine), São Paulo, Jan. 21, 2004

“Strange Activities” at Carital do Brasil
The principal focus of the federal investigation is going to be Carital do Brasil, the former subsidiary of Parmalat that used to negotiate and manage soccer teams, among other activities. The negotiations of player salaries in the past few years in São Paulo will be another key concentration area of government investigators who want to see if there were any fiscal irregularities coming out of Parmalat Brasil. According to one of the main financial officers of Parmalat, Gianfranco Bocchi, Carital was dedicated to “strange activities” and received a “sack of money” from the headquarters in Italy.
—Guilherme Barros, Folha de S. Paulo (liberal), São Paulo, Jan. 21, 2004

Who’s to Blame?
Stories like this would not happen if neo-liberal globalization had not created an international financial system that makes money look like it grows on trees. For the United States to finance the savings deposits of the rest of the world, it has become necessary for the free movement of capital to flow toward Wall Street, with stops in fiscal paradises in the Caribbean. The result is a hypertrophy of finance capital, its total disconnection from actual production, and innumerable opportunities for fraud that no ambitious executive under pressure from market competition has the luxury to ignore.
—Antonio Luiz Monteiro Coelho da Costa, Carta Capital (left-wing magazine), São Paulo, Jan. 21, 2004