Business in Brazil

This is a continuation on the New York Times story posted previously

Two years after announcing a deal to add the Trump brand to a hotel in Rio, it is already in the middle of conflicts. The first, less worrying, issue is that it is still not complete and barely opened in time for the summer Olympics. Much more worrying are the “irregularities” that seem to “warrant a criminal investigation.”

The examination of the project by Mr. Lopes, the federal prosecutor, has already found a series of “highly suspicious” potential irregularities warranting a criminal investigation, according to court documents. “It is necessary to verify if the favoritism shown by the pension funds to LSH and the Trump Organization was due to the payment of illicit commissions and bribes,” Mr. Lopes said in documents filed in October.

In his filings, Mr. Lopes said the size of the hotel investments relative to the overall holdings of the small pension funds reflected a highly unusual level of risk, especially for an unfinished venture that failed to capitalize fully on the demand for accommodations during the Olympics.


Even if Brazil’s executive branch actively tries to seek warmer relations with Mr. Trump, officials will face obstacles if they try to quell the investigation. Brazil differs from some other countries in Latin America where presidents can easily exert pressure on prosecutors and judges, with the judiciary steadily growing more independent.

“Brazilian diplomats could try to avoid the problem of referring to the investigation when dealing with the Trump administration, but that’s about all they can do,” said Maurício Santoro, a political scientist at the State University of Rio de Janeiro. “This is something that could hang over relations between the two countries for years.”


This investigation, no matter the outcome with respect to the Trump business, could still create tensions between Brazil and the new administration.