The Brazilian billionaire living in a rat-infested jail

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© Reuters Andre Esteves, July 2014

Twelve days ago, Andre Esteves moved into a cell with concrete beds. His head was shaved. Some of his fellow lodgers are rats, attracted by the landfill next door.

The 47-year-old is still a billionaire, but one using a collective squat toilet in a unit of the notorious Bangu penitentiary complex on the edge of Rio de Janeiro. Outside, smells from sewage ditches blend with whiffs of deep-fried tidbits women buy for their incarcerated husbands from a clutch of vendors near the entrance. Inside, the former chairman and chief executive officer of Grupo BTG Pactual, Latin America’s largest independent investment bank, washes with bar soap cut into slices by guards looking for contraband.

Esteves’s detention, along with the incarceration in June of the head of Brazil’s largest construction conglomerate, has spread more than a little schadenfreude in a country accustomed to impunity for white-collar offenders. The executives are symbols of a generation of corporate leaders who profited from a boom that turned Brazil into the largest developing economy after China. A corruption probe sent them to prison to await trial, helped throw the country into a deep recession and left President Dilma Rousseff fighting for her political survival.

Antonio Carlos de Almeida Castro, a lawyer representing Esteves, said the reaction isn’t surprising. “People usually hate bankers,” he said. He’s confident about his client, who has denied charges that he obstructed the corruption probe.

“He has a very steady character,” Castro said, “but of course no one wakes up normal at Bangu 8 if one is innocent.”

Esteves -- who once joked that BTG stood for Better than Goldman -- was arrested on Nov. 25 as part of a pay-to-play corruption probe called Operation Carwash that has engulfed state-run oil giant Petrobras and some of the country’s largest builders. The alleged scheme inflated prices for construction projects and kicked money back to Petrobras officials and others.

There have been more than 110 arrests since March 2014, including of Senator Delcidio do Amaral, the first of a sitting federal lawmaker since the military dictatorship that ruled the country until 1984. Four former top Petrobras officials have spent months in a six-cell temporary federal jail.

Before Esteves, the most prominent executive taken into custody was Marcelo Odebrecht, the CEO of Odebrecht SA, a family-owned construction company that has thrived on government contracts. The 47-year-old Odebrecht is incarcerated in a district close to Curitiba, the capital of Parana state, in a prison with space set aside for Carwash defendants. Among the personal possessions he’s allowed to keep in his cell are four pieces of underwear, three white T-shirts, six chocolate bars and eight sheets of letter-size paper, according to local government officials. (A judge accused him of using one sheet of the paper to pen a note asking his lawyers to erase an e-mail about oil-rig contract that mentioned BTG. Odebrecht has denied doing so.)

At the penitentiary in Bangu, famous for bloody gang violence featured in Brazilian movies including “Tropa de Elite,” Esteves is in a unit called Bangu 8 that is reserved for inmates with college degrees. Unlike the men and women in the 26 other units, he might be alone in his cell, which has more than 12 beds. There are typically no more than 60 inmates in Bangu 8 at any one time, according to prison officials, and the facility was built for more than 200.

There are other perks: There’s a canteen, where a liter of Coca-Cola sells for 10 reais, about twice as much as on the outside. But visitors can’t bring inmates containers of farofa, a traditional dish of flour, bacon and eggs, because they can too easily hide rocks of crack cocaine. And while men locked up in Bangu 8 usually aren’t subjected to head-shaving, something regularly done in overcrowded sections for sanitary reasons, Esteves’s locks were shorn a few days ago, according to Castro, his lawyer.

He said it happened after reports Esteves was getting special treatment. Local media outlets said Lilian Esteves, his wife, had been allowed to bring him a favorite codfish dish from Antiquarius, an upscale restaurant across from Rio’s Leblon beach. Castro said that was incorrect, describing Lilian Esteves’ prison-visiting drudgery as like any other inmate’s relative.

All items brought into Bangu are carefully inspected, with oranges peeled and sectioned, strawberries cut in half and cakes into pieces. If someone gives Esteves a tube of toothpaste, it’s squeezed out into a see-through plastic bag, to ensure nothing forbidden is hidden in the goop.

“He deserves it,” said Roberto Duarte, 25, who sells beverages and snacks on the beach in Ipanema where Esteves has an ocean-view apartment. “Rich people have the power in this country. Don’t you think he has air-conditioning in there?”

There are skeptics about how hard he has it, among them Joana Pereira, a 43-year-old secretary who tried last week to visit her boyfriend, who was in Bangu 8 for failing to pay child support. She said she couldn’t get in, because she didn’t have a visitor’s badge, which can take up to a month to obtain, or a signed authorization from the prison director. There were no roadblocks for Lilian Esteves, Pereira said in disgust. “The banker’s wife got in a day later.”

However Esteves is being treated, just the fact he’s behind bars is enough for some. “I wouldn’t say Brazil is changing, but showing a new face,” said Paulo Machado, 58, who works with Duarte on the beach in Impanema. “Rich people are going to jail now, and before that wouldn’t happen.”