LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Wednesday, June 15, 2016 BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group POLITICAL Devry Boughner Vorwerk How Strong Is Senior Policy Advisor Ex-Argentine Akin Gump Strauss Hauer & Feld, LLP Gov’t Minister Joyce Chang Global Head of Research, Temer’s Grip on Arrested, Allegedly JPMorgan Chase & Co. After Hiding Cash W. Bowman Cutter Former Partner, Power in Brazil? José López, who served as public E.M. Warburg Pincus works minister in the government Dirk Donath of former President Cristina Senior Partner, Fernández de Kirchner, was Catterton Aimara arrested after he was allegedly Marlene Fernández Corporate Vice President for seen throwing bags stuffed with Government Relations, millions of dollars over the wall of Arcos Dorados a monastery. Peter Hakim Page 2 President Emeritus, Inter-American Dialogue Donna Hrinak POLITICAL President, Boeing Latin America Brazil’s High Jon Huenemann Vice President, U.S. & Int’l Affairs, Court Rejects Philip Morris International In his fi rst month in offi ce as Brazil’s interim president, Michel Temer lost cabinet members James R. Jones following the release of secret audio recordings. // File Photo: Brazilian Government. Requests for Top Co-chair, Manatt Jones Politicians’ Arrests Global Strategies LLC Interim Brazilian President Michel Temer’s transparency Craig A. Kelly Justice Teori Zavascki rejected Director, Americas International and planning ministers resigned in recent weeks following the request to arrest Senate Gov’t Relations, Exxon Mobil the release of secretly recorded audio tapes in which the President Renan Calheiros, Sen. John Maisto Q Romero Jucá and former Presi- Director, U.S. Education offi cials are alleged to have discussed derailing the corrup- dent José Sarney. Finance Group tion probe at state-run oil company Petrobras, allegations they deny. At Page 2 Nicolás Mariscal Chairman, the same time, while Temer had a 34 percent personal approval rating, Grupo Marhnos according to a June 2-5 MDA poll, only 2 percent of Brazilians said in POLITICAL Thomas F. McLarty III a Datafolha poll in April that they would vote for him. How strong is the Chairman, U.S., Venezuela McLarty Associates movement against Temer, and how fi rm of a grip does the interim presi- to Enter High- Carlos Paz-Soldan dent have on power? How is the cabinet controversy affecting his ability Partner, Level Talks DTB Associates, LLP to drive the economic reform agenda? What are the likeliest scenarios Veteran diplomat Thomas Beatrice Rangel for the outcome and aftermath of the impeachment proceedings against Director, Shannon will lead the talks on the AMLA Consulting LLC suspended President Dilma Rousseff now underway in the Senate? U.S. side. José Antonio Ríos Page 2 Chief Executive Offi cer, Vadium Technology Inc. Riordan Roett, director of the Latin American Studies pro- Gustavo Roosen gram at the Johns Hopkins University’s School of Advanced Chairman of the Board, Envases Venezolanos International Studies: “The soap opera continues. Eduardo Andrés Rozental Cunha’s wife is now implicated in the ongoing corruption President, Rozental & A Asociados and Senior inquiry. Calheiros, Jucá and Sarney may be next. It is not clear who will Policy Advisor, Chatham House follow. Given Temer’s low approval ratings, he clearly does not have very Shelly Shetty Head, Latin America much popular support for moving his agenda forward. The impeachment Sovereign Ratings, Fitch Inc. process will dominate Brazilian politics for the foreseeable future. There Roberto Sifon-Arevalo are three possible scenarios. The fi rst is that the Senate actually fi nds the Managing Director, Americas Sovereign & Public Finance Ratings, votes to remove Dilma from offi ce. Then, a weak Temer stumbles toward Standard & Poor’s 2018. The second is that the Senate refuses to impeach and Dilma walks the ramp and returns to the presidency as a lame duck with little, if any, Shannon // File Photo: U.S. State Department. Continued on page 3 COPYRIGHT © 2016, INTER-AMERICAN DIALOGUE PAGE 1 LATIN AMERICA ADVISOR Wednesday, June 15, 2016 POLITICAL NEWS “It’s almost out of a movie,” said Argentine NEWS BRIEFS President Mauricio Macri’s cabinet chief, Mar- Ex-Argentine Gov’t cos Peña. “We’re shocked because it’s not a Brazilian Supreme Court minor offi cial. He led public works... where we Rejects Requests for Minister Arrested, saw so much daily corruption.” During a public event on Tuesday, Macri called the situation Top Politicians’ Arrests Allegedly Hid Cash “shameful,” adding, “We are all surprised. We Brazil’s Supreme Court on Tuesday rejected a at Monastery are clearly changing and it’s good that we shed request by the country’s chief prosecutor to light on the types of practices that we want to arrest three powerful members of interim Presi- eradicate in Argentina.” dent Michel Temer’s party, The Wall Street Jour- A former Argentine cabinet member was nal reported. Justice Teori Zavascki rejected arrested Tuesday after he was allegedly seen the request by Rodrigo Janot to arrest Senate throwing bags stuffed with millions of dollars U.S., Venezuela to President Renan Calheiros, Sen. Romero Jucá in cash over the wall of a monastery west of and former President José Sarney. Janot Buenos Aires, BBC News reported. José López Enter High-Level alleged that the men had tried to interfere with was public works minister in the government Talks to Ease Crisis the corruption scandal at state-run oil company of former President Cristina Fernández de Petrobras, allegations they deny. Zavascki Kirchner. Police arrived at the Our Lady of the U.S. Secretary of State John Kerry on Tuesday said they had not been caught committing any announced at a meeting of the Organization crime. Also Tuesday, a congressional ethics of American States that the United States and panel voted to strip suspended House Speaker, Venezuela would launch high-level diplomatic and ruling party member, Eduardo Cunha from talks to ease tensions between the ruling party his seat, saying he lied to his peers about hid- and the opposition, the Financial Times report- ing money overseas. He denies wrongdoing. ed. He said the talks would begin “as soon as possible,” and that the United States is looking for ways to provide assistance. The talks will Argentina to Release be led on the U.S. side by Thomas Shannon, López // Photo: Argentine Government. one of the State Department’s leading offi cials First Infl ation Statistics and a veteran diplomat to Latin America. Ven- Since Macri Took Offi ce Rosary of Fatima monastery, 35 miles west of ezuelan President Nicolás Maduro welcomed the capital, after nuns reported seeing a man Argentina will release its fi rst set of offi cial the talks, saying from Caracas, “Let’s start throwing plastic bags over a wall. Police fi rst infl ation fi gures since President Mauricio Macri this high-level encounter, I agree.” He add- detained López at the monastery for alleged took offi ce late last year, BBC News reported ed, “I propose to John Kerry ‘let’s designate illegal possession of a .22 caliber rifl e. Offi cers today. Since 2013, the International Monetary ambassadors.’ I am ready. They have ambassa- later discovered the bags of cash, in several Fund has said that Argentina’s offi cial infl ation dors in Beijing, Vietnam and Havana, and they currencies, in addition to wristwatches inside index has been inaccurate, accusing the gov- don’t have one in Caracas.” Kerry also called the bags. Police recovered approximately $7 ernment of underreporting economic problems. for the South American country to release million worth of currency, according to local Analysts believe prices rose by 4 percent last political prisoners and permit a recall referen- media. Police found more cash inside the car month, and that infl ation may reach 40 percent dum against Maduro, The Wall Street Journal in which López had been traveling. “He was this year. reported. At the general assembly session in caught red-handed with six bags, a suitcase, the Dominican Republic, Kerry said the Maduro a weapon and he was later identifi ed as a administration must address critical shortages public works minister, Jose López, from the of food, medicine and other basic goods. His Conoco, Chile’s ENAP to previous government,” said Cristian Ritondo, comments elicited a harsh response from Explore for Gas Deposits Buenos Aires’ provincial security chief, BBC Venezuelan foreign minister Delcy Rodríguez, News reported. “This person was arrested, in in Magallanes Region who said her country is a victim of “internation- principle, for carrying a weapon. Now he is be- al bullying from the right,” and accused OAS Chilean state oil company ENAP has signed a ing detained for possible money laundering or Secretary General Luis Almagro of being “on deal with Houston-based multinational energy suspected money laundering.” López was later the payroll of Washington to intervene in the corporation ConocoPhillips to begin explo- seen wearing a bulletproof vest and helmet affairs of Venezuela.” In the past few weeks, Al- ration and eventually exploit gas deposits in when he was escorted out of a Buenos Aires magro has criticized Maduro’s government and Chile’s southern Magallanes region, a source police station where he had been questioned. familiar with the agreement told Reuters. COPYRIGHT © 2016, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ADVISOR Wednesday, June 15, 2016 FEATURED Q&A / Continued from page 1 has invoked the OAS’ Democratic Charter in order to discuss the possibility of suspending possibility of moving any agenda forward. what their objectives are. Some want to hold Venezuela from the OAS. The OAS is expected And, fi nally, the option that fl oats above the a general strike against Temer, but many to discuss Almagro’s 132-page report on Vene- crime scene, new national elections, which believe they do not have the strength to be zuela in a meeting on June 23.