Company spied on officials in Brazil (American)

[Judi Lynn]

Company spied on officials in Brazil
By Raymond Colitt and Jonathan Wheatley in São Paulo
Published: July 22 2004 20:37 | Last Updated: July 22 2004 20:37


A private investigative firm has spied upon top officials in the government of President Luiz Inácio Lula da Silva as part of the most startling corporate espionage case in Brazil's recent history.

Kroll, a US-based consultancy, was originally contracted by representatives of Opportunity, a Brazilian investment company, to investigate Telecom Italia, with which it is fighting for control of Brasil Telecom, a national telephone company. But Kroll ended up spying on top government officials, including Luiz Gushiken, current communications secretary and Lula da Silva confidant, over alleged political favours for Telecom Italia.

Excerpts of Kroll's reports in Thursday's Folha de São Paulo newspaper suggest government officials were helping Telecom Italia in an attempt to dislodge Opportunity from Brasil Telecom. Kroll also alleged campaign funding for the governing Workers' party (PT) was supplied by Luiz Roberto Demarco, a disgruntled former partner in Opportunity.

Mr Gushiken on Thursday said the "sordid" investigations were in "flagrant violation of the constitution" and promised in a statement to take "appropriate legal action". The federal police and the justice department were investigating the case.
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http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1087373918757

On edit, adding more information:

Associated Press
Brazil Probes Report That Kroll Spied
07.22.2004, 09:14 PM

Brazilian authorities are investigating a report that international security consultant Kroll Inc. spied on a top presidential adviser as part of its probe into a corporate dispute between two telecommunications companies, officials said Thursday.

Communications Minister Luiz Gushiken said the alleged spying on him reported by the Folha de Sao Paulo newspaper took place before he was appointed but was "illegal" and is being investigated by Brazil's Justice Ministry.

Kroll obtained several e-mails written by Gushiken during the firm's investigation of Telecom Italia SpA for Brasil Telecom Participacoes SA, Brazil's third largest fixed-line operator, the newspaper said in a report published Thursday.

The e-mails were written before President Luis Inacio Lula da Silva took office last year and appointed Gushiken. But the minister has long been an important player in Silva's Workers Party, and said Brazil will respond "with appropriate legal measures to this incident of flagrant constitutional disrespect."
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http://www.forbes.com/business/businesstech/feeds/ap/2004/07/22/ap1466925.html