“Itaipu-gate” is how experts have dubbed the political scandal that almost brought down the Paraguayan government earlier this year. At the core of the crisis is the binational Itaipu hydroelectric dam, a double-edged sword in Brazil and Paraguay’s energy and foreign relations. 

A decade after former Presidents Fernando Lugo and Luiz Inácio Lula da Silva reached an agreement by which

Brazil agreed to pay an extra USD 240 million for Paraguayan electricity, the incumbent governments met to rearrange the deal in what was the first chapter of this latest crisis. </p> <p>At the negotiating table in April, <a href="https://brazilian.report/newsletters/daily-briefing/2019/07/30/energy-deal-itapu-brazil-crisis-paraguay/">Brazil pushed Paraguay</a> to start purchasing more of its reserve energy at a higher price, with talks culminating in a deal that saw a progressive increase in Paraguay’s consumption of reserve power over the next three years. This would raise the country’s electricity costs by some USD 200 million—roughly one percent of Paraguay’s GDP.</p> <p>Sitting Paraguayan President Mario Abdo Benítez was immediately accused of betrayal and submission, criticism that was ramped up when Paraguayan newspaper <em>ABC Color</em> released a series of leaked WhatsApp conversations involving the head of state.</p> <p>Opposition politicians threatened to launch impeachment proceedings against Mr. Benítez. However, after Brazil apparently did the Paraguayan president a favor by canceling the <a href="https://brazilian.report/money/2019/02/04/energy-problems-itaipu-paraguay/">deal</a>, the wolves in Congress were kept at bay, but not without the resignation of the Minister of Foreign Affairs and the Paraguayan ambassador in Brazil. </p> <p>But canceling the deal was not an act of charity from Brazil, as there are suggestions the government&#8217;s involvement ran deeper. An investigative report released by <a href="https://agenciasportlight.com.br"><em>Sportlight Agency</em></a>, a project of Brazilian journalist Lúcio de Castro, has linked members of Mr. Bolsonaro’s Social Liberal Party (PSL) to the Itaipu scandal.&nbsp;</p> <p>According to the article, a company named Leros, owned by Kléber Ferreira da Silva and Adriano Tadeu Deguirmendjian, was set to receive financial benefits from the controversial energy agreement that sparked the Paraguayan crisis. What&#8217;s more, the business owners were accompanied by Alexandre Giordano, a member of the PSL and the understudy of Senator Major Olímpio, one of President Bolsonaro&#8217;s most faithful (and vocal) foot soldiers in Congress.&nbsp;&nbsp;</p> <p>The investigation also shows that Mr. Olimpio himself was in Asuncíon on the day the doomed bilateral deal was signed—information which is confirmed by the official schedule of Brazil&#8217;s foreign affairs ministry and mentioned in the report of Brazil&#8217;s ambassador in Paraguay, Carlos Alberto Simas.&nbsp;</p> <h2>Suspicious partners</h2> <p>The string of events that binds Brazil’s ruling party to the owners of Leros would be fitting for a Hollywood movie script. Both Alexandre Giordano—Major Olimpio’s substitute in the Senate—and the two partners of Leros changed their corporate documents in a short period of time. In April 2018, Mr. Giordano renounced his ownership of wholesale energy company Enfermade, just six days before joining the PSL.</p> <p>He then emancipated his 17-year-old son, Lucca Giordano, naming him as the only partner of the company. The corporate address of Enfermade matches the headquarters of the PSL in São Paulo.</p> <p>Kléber Ferreira da Silva and Adriano Tadeu Deguirmendjian, partners of Leros Group and nominally competitors of Enfermade, opened an offshore in Panama in October 2018, called Novel Industries Inc.&nbsp;</p> <p>Documents made available by Panamanian commerce registries show the company was opened four days before the first round of the Brazilian general elections, when Major Olimpio (and, as substitute, Alexandre Giordano) would be elected as a Senator for São Paulo.</p> <p>A third figure, a man named Celso Bispos dos Reis, is also involved. He appears as another partner of Mr. Kleber and Mr. Tadeu, but instead of Leros&#8217; location in Panama, Mr. Bispos dos Reis&#8217; corporate address is listed as a beauty salon in São Paulo—which is owned by Larissa Deguirmendjian, another Leros shareholder.&nbsp;</p> <h2>Presidential influence</h2> <p>Reports in Paraguay claim that <a href="https://brazilian.report/power/2019/08/15/itaipu-paraguay-brazil-tension-mario-benitez-impeachment/">a meeting took place</a> between that country&#8217;s officials, Mr. Giordano, and an envoy from Leros, as the company was keen on buying cheap energy from Paraguay to sell to Eletrobras, Brazil’s state-owned energy company.</p> <p>According to these reports, both Mr. Giordano and the Leros representative claimed they were “speaking on behalf of the Bolsonaro family.”</p> <p>Mr. Giordano admits he did attend a meeting in the Paraguayan capital of Asunción, but denied presenting himself as a spokesperson for Jair Bolsonaro. “At the meeting, they asked me my name, they must have looked me up on Google or something and saw I was [Major] Olímpio’s substitute,” he told <em>Piauí</em>. “Some people are living in Narnia, someone tried to gain some vanity advantage over this, I don’t know.”

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PowerOct 05, 2019

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BY Agência Sportlight

Agência Sportlight produces investigative reports.