Political scandals in Brazil center around vote-buying

January 8, 2013
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Scandals in Brazil

Businesses that are attempting to develop new mergers, acquisitions or other transactions in Brazil should be aware of political scandals plaguing the country and which laws in Brazil contrast with those of the United States.

The Economist reported that a scheme for buying votes in the Brazilian Congress led to 25 individuals being found guilty of corruption, money-laundering and improper use of public funds. Many of these were sent to prison and given large fines.

The chief of staff José Dirceu was sentenced to 11 years in prison while Marcos Valério, an advertising professional in on the scheme, was given a 40-year jail sentence.

"The mensalão [scheme] is a striking symbol of this change," Carlos Melo, a political scientist at business school Insper, told the news source. “But it started some time ago.”

The clean record law has brought forth more legislation for judges to consider in their courtrooms in order to keep politicians from committing crimes. This law, which was initiated in 2010, bans anyone who has committed vote-buying, illicit campaign financing and other forbidden procedures from being elected to office.

Investors attempting to make contact with Brazilian companies, however, may not fare well, based on the tough economic conditions present in the country, according to the New York Times.

New regulations to reduce consumer spending brought forth more economic challenges for different sectors, such as electricity providers and retail banks. New taxes also weakened the currency in 2012 and led to lower profit outlooks for a number of companies in Brazil.

Companies that are attempting to develop transactions on a global scale will need to learn about the business laws in Brazil. With the help of a Brazilian law firm, foreign businesses will be able to meet all of their interests.

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