In 2017, Brazilian politics was rocked by a corruption scandal that reached all the way up to the president’s office, and very nearly brought down the government of the time. In May of that year, the Brazilian press revealed that billionaire Joesley Batista, who along with his equally billionaire brother Wesley ran JBS, the world’s largest meat-packing company, had secretly recorded conversations with then-President Michel Temer.
The recording was leaked shortly after, showing President Temer apparently condoning the payment of hush money to former House Speaker Eduardo Cunha, who was in prison at the time.
Unsurprisingly, Brazil went bananas, with the president refusing to resign only because he knew he had enough allies in Congress to block an impeachment vote.
But the plot was about to thicken even more, as prosecutors accused the Batista brothers of using their prior knowledge that the stock market would go haywire to sell off and buy back shares in their own company, for huge profit.
Amid the scandal, Joesley and Wesley stepped down from the JBS board and kept a low profile as they were being investigated for insider trading, until they were eventually exonerated in 2023.
And now, in 2024, the Batista brothers might well be back.
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In this episode:
- Kimberly Spell is the executive director of Ban the Batistas, an advocacy group formed in November 2023 to oppose JBS’s plans to hold an IPO on the New York Stock Exchange. Ms. Spell is also senior vice president at Actum.
Background reading:
- In a securities filing at the end of March, meat-processing giant JBS told regulators it plans to expand its board from nine to 11 seats to make room for brothers Joesley and Wesley Batista.
- The Batista brothers were exonerated from 2017 insider trading charges, when they were accused of taking advantage of an imminent plea deal to sell off stocks in their own company and make major profit amid a market crash.
- JBS was responsible for clearing about 100,000 hectares of vegetation in the Amazon and Cerrado biomes between 2019 and 2021. Environmentalists have called on the Brazilian development bank BNDES, which owns almost 21 percent of JBS, to take action to help curb deforestation and emissions.
- A 2023 study by the Environmental Justice Foundation (EJF) on slave labor in Brazil’s cattle industry found that one-third of companies using slave labor in the country’s Pantanal wetlands have trade links with JBS
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Transcript of this episode (with Cockatoo)
In 2017, Brazilian politics was rocked by a corruption scandal that reached all the way up to the President’s office and very nearly brought down the government of the time. In May of that year, the Brazilian press revealed that billionaire Juesli Bacista, who along with his equally billionaire brother Wesley ran JBS, the world’s largest meatpacking company, had secretly recorded conversations with then-President Michel Temer apparently condoning the payment of hush money to former House Speaker Eduardo Cunha, who was in prison at the time. Unsurprisingly, Brazil went bananas, with the President refusing to resign only because he knew he had enough allies in Congress to block an impeachment vote.
prosecutors accused the Bacista brothers of using their prior knowledge that the stock market would go haywire to sell off and buy back shares in their own company for huge profit. Amid the scandal, Joesley and Wesley stepped down from the JBS board and kept a low profile as they were being investigated for insider trading until they were eventually exonerated in 2023.
And now in 2024, the Bacista brothers are back and that’s the topic of today’s episode. I’m Euan Marshall, Deputy Editor of the Brazilian Report, and this is Explaining Brazil. If you like Explaining Brazil, you should subscribe to the Brazilian Report, the journalistic engine behind this podcast. We’re an independent organization funded by our subscribers, and you can help us stay independent and continue to produce award-winning journalism. Our work has been recognized for its quality and we’ve won several international awards, and the Brazilian report was recently nominated for Best News Website in Latin America
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Click on buymeacoffee.com slash BrazilianReport to find out more. At the end of March, global beef giants JBS announced that they were expanding their board from 9 to 11 members in order to make room for the return of the Bocchista brothers to the head of the company. Shareholders will meet later this week to confirm the decision. That said, shareholder approval is hardly a given.
suggest that the brothers could well be blocked from returning to the board. We got in touch with JBS to ask about the results of this preliminary vote, and they assured us that the final outcome will only be made clear after Friday’s shareholders meeting, estimating that the votes received in this preliminary portion should only add up to around one fifth of the total. But the JBS stranglehold on the beef industry has players in the US and Europe flustered.
Above all, it’s JBS’ plans to launch an IPO on the New York Stock Exchange that has got tails up all around the world. In January of this year, 12 members of the House of Commons and House of Lords in the UK sent a letter to the SEC in the US, asking them to reject JBS’ request to go public in New York. They argued that allowing the IPO would increase deforestation in the Amazon. That same month, US Senators wrote their own letter to the SEC with the same demands, this time using the corruption argument to try and turn American regulators against JBS. An advocacy group was set up in the US at the end of last year to help coordinate these
efforts, going by the very straight to the JBS board, the group called for consumers to boycott JBS brands. And today I’ll be speaking to the Executive Director of Band of Bachistas, Kimberly Spell. Kimberly, thanks a lot for joining us.
Oh, thank you so much for having me, Euan.
I think first of all it would be good if you could, in your own words, give us a bit of an overview on who the Bachista Brothers are, how they made their fortune and how JBS became the world’s biggest meat company.
Before I get started I would like to just tell you a little about who we are. Band of the Tistas is an advocacy group and we’re working to protect farmers, ranchers, consumers and investors. We launched late last year to prevent JBS’s attempted IPO on the New York Stock Exchange. And we’re doing this to protect American independent farmers, responsible investors, and conscious consumers from JBS’s long history of corruption. Now, over to your question, the Batista brothers, how they made their fortune and how JBS became
the world’s biggest meat company. Those are very big questions. Josely and Wesley Batista are the billionaire brothers, and they’re the sons of JBS founder Jose Batista. JBS is notorious for its staggering daily slaughter of 13 million animals and annual revenues reaching $50 billion. It’s been embroiled in numerous controversies, plagued by scandals from high-level corruption to labor abuses, environmental violations. The company’s practices
have come under intense scrutiny in all ways. Expanding ruthlessly into the U.S. market through acquisitions like SWIFT and Pilgrim’s Pride Corporation, JBS cultivated close ties with the Brazilian government, leveraging substantial loans from Brazil’s state development bank, JBS solidified its dominance in the American meatpacking industry. However, the company’s involvement in the widely reported Operation Car Wash corruption scandal there in Brazil revealed the extent of JVS’s criminal activities.
Executives confessed to paying millions of dollars in bribes to politicians, implicating top Brazilian leaders, including then-President Michael Tamer and his predecessors.
So on April 26th, shareholders of JBS are going to vote on whether or not to elect Wesley and Joesley Bautista back into the company’s board of directors. Now, they’ve not been part of the board for seven years, so why do you think they’re coming back now?
Thank you. The Bautista brothers did previously serve on the board for the world’s largest meatpacker and they faced a really tumultuous period in 2017. It was marked by arrest and scandal. Wesley Batista, who was then CEO of JVSSA, and his brother, former chairman Josely Batista, were arrested by Brazil’s federal police amid accusations of profiting illegally from a plea deal. What they were doing, essentially, was accused of doing, they were dumping company shares and stockpiling U.S. dollars before the deal became public.
That enabled them to profit as bribery allegations shook Brazil’s government and financial markets. Now despite initially avoiding prison time during this by offering evidence against the politicians that they bribed. Their fortunes changed when a recording by Josely Batista boasting about omitting evidence surfaced. It prompted threats to revoke their legal protections.
Wesley Batista was arrested. He was linked to insider trading during a plea deal negotiations, and it signaled a broader crackdown beyond the initial corruption charges. This upheaval, which was dubbed Josely Day by Brazilian traders, exposed the power and influence of Brazil’s meat industry and delivered a significant blow to the stock market.
And just for our listeners, I alluded to this at the beginning of the show, but on that day that the plea deal and the secret recordings came to light, the Brazilian stock exchange dropped 8.8% in a single day, triggering a circuit breaker and the Brazilian real also hit its lowest value in 14 years before that point.
Josely Batista’s recording made as part of the plea deal arising from the corruption scandal captured President Michael Temer apparently ordering bribes to a corrupt politician serving a graft-related prison sentence. The revelation shed light on widespread corruption with JBS officials testifying to bribing 1,829 candidates from various political affiliations, spending nearly $250 million.
So the Banda Bautista’s advocacy group, as you mentioned at the start, it focuses on opposing JBS from listing on the New York Stock Exchange. If your efforts are unsuccessful, what do you think would happen if JBS were to go public in New York?
Actually, we don’t see that happening anytime soon and we’ll deal with that if it does.
So I guess if I could rephrase that, what are the threats that you see of JBS becoming a listed company in the US?
Well, I mean, the presidential election year is about to shine a harsh spotlight on the agribusiness sector because food prices have become a potent political issue. So both President Biden and former President Trump are talking about high prices and how to get them down. And as the media digs into that issue, we think JBS will fare poorly in the conversation. Adding the two brothers to the board, despite their criminal convictions for bribery,
the endless investigations into price fixing and the environmental degradation JBS has wrought in the Amazon, is all going to get aired as the campaign make their make food prices a central part of their campaigns. Media is at its toughest when presidential candidates in the U.S. the US start talking about issues and we think that that harsh spotlight will burn JBS and deservingly so. For our part we’re going to do everything we can to push JBS and its terrible track record to the front and center of that conversation.
Again, as you mentioned at the start of the interview, Banda Bacista’s fights to quote protect American farmers and I think in Brazil when you hear about an advocacy group in the US opposing a Brazilian company, you know, the idea of why a US group would seek to protect the US agriculture industry against a Brazilian firm isn’t really well understood at the moment, so if you could give us an overview of the agribusiness sector in the US and why you feel the need to protect American firms from JBS.
Sure, well what we’re seeing is high prices at the grocery stores for American consumers. And we’re seeing elected officials who are sounding the alarm from both the Republican side and the Democratic side about a JBS IPO. Because a JBS IPO will, with their track record of corruption and human rights abuses,
their monopolization of the meatpacking industry here in the U.S., and their environmental risks, all point to reasons to be concerned. So, in January, Bama Vistas worked with a bipartisan group led by Senator Cory Booker and Senator Warren, Rubio, Hawley and others and we urge the SEC Chairman Gensler to safeguard the US capital markets from JVS’s activities.
And what’s the trajectory behind Bamba Batistas? When did the idea behind that come around?
Sure, Bamba Batistas was created in November of last year when it first first became known that JBS was going to try and list on the stock market again. And Bama Batista is one of many groups that is joining the movement to expose JBS’s long track record of corruption. And we’re doing this again, like you said, to protect investors, farmers, and consumers from what we think will be a detrimental impact of a JBS listing in the US.
Thanks a lot for joining us, Kimberly.
Thank you, Euan. I really appreciate you having me on today.
In justifying the reappointment of the Bachista Brothers to the board, JBS say that neither Jwesley or Wesley have faced any criminal convictions or administrative proceedings from the securities regulator or central bank in the last five years. Regarding the campaign against its plans for an IPO, JBS says that going public in the US will quote, attract a broader base of investors, increase the flexibility to issue shares to finance growth and deleveraging opportunities, reduce the cost of capital and further increase scrutiny of JBS’s already robust governance. The company also said that it is important to quote, separate the facts from external noise. the facts from external noise. International Awards. And recently, the Brazilian report was nominated for Best News Website in Latin America by the World Association of News Publishers, UANIFRA. And to continue this work, we need your support. So go to Brazilian.report. I’m Euan Marshall. Thanks for listening and Explaining Brazil will be back next week. Explaining Brazil will be back next week. you
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