Something huge happened in Brazil, the jailing of banker Daniel Dantas, along with other 17 people, among them a former mayor of Sao Paulo (Celso Pitta) and businessman Naji Nahas.

For those who do not know the Brazil, it’s difficult to understand why this is great. I’ll try to be brief.

In the early 90’s, a powerful senator representative of Bahia (one of the largest and most important states of Brazil) presented a young economist in Brasilia to the elite class of Brazilian politics. It was Daniel Dantas. Almost became Minister of Finance of President Collor (which underwent a process of impeachment) and shortly afterwards founded one of the largest banks in Brazil, Opportunity. Since then the banker has relations with the leaders and members of the Legislative. During the process of privatization of the telecommunications industry, he was very active, knowing of all the steps that the government would take and then began to emerge doubts about him. His first big step was the acquisition of Brasil Telecom, together with pension funds, Telecom Italia and Citigroup.

Rumors about inside information, espionage and business began to emerge. Doubts were raised about the operations of his bank. But no concrete investigations happened. At the end of the 90’s the scandal of “Precatórios” became public, a scheme of corruption so well established that departed US$ 240 million of the city of Sao Paulo. The Opportunity may have benefited from this scheme.

The latest scandal in which Dantas is involved is the “Mensalão”, a scheme that provided money for campaigns for federal parliamentarians. This was disclosed by the media in 2006 and is the biggest scandal in Brazil’s recent history. Three ministers who are personal friends of the president and more than forty members Congress were accused of receiving millions of dollars irregularly through the Mensalão (in Portuguese, this word is derived from the word “month” because every month dozens of politicians received money from the scheme). The president was spared, claiming that he didn’t know what was happening. Why Dantas would have participated? To keep control in Brazil Telecom. In this year he sold his shares for US$ 500 million.

The investigations of Federal Police (PF) began four years ago and the arrest of Dantas today is the result of an operation called Satiagraha, which means peaceful and silent resistance. According to PF, the group Opportunity Fund handled US$ 2 billion between 1992 and 2004; all this money is the result of the action of two criminal groups which acted in two fronts: one getting inside information in the stock market and other making money laundering. Even the Fed (U.S. central bank) may have leaked information to one of these groups. For now, the extension of his power is unknown.

It is unknown yet what will happen to him (I have my suspicions that he will be released very soon). But what is known is that today many important people from business and political world will not be able to sleep. There is much more dirt to come to surface.