The Central Bank intervened in Banco Santos on Friday, Nov. 12. According to the drawing that Folha reproduced, the first time that the Central Bank pointed out problems about the financial health of the bank was on Oct. 15 and “on the day of Nov. 5 the red light was turned on.”
According to one of the lawyers for the bank, Ricardo Tepedino, “the BC (Central Bank) performed ostensible and indiscreet oversight (of the bank’s situation). Rumors led to a wave of unusual withdrawals. It was 700 million reals (US $196 at the current exchange rate) in the past four months. This bloodletting sapped the liquidity of the bank” (“Rumors cause problems, lawyer says,” Folha on Nov. 14).
In the story “Banker admits asset problem” published Saturday, Nov. 13, the newspaper reported that the bank “had been under rigorous inspection by the Central Bank for at least one year” and that “rumors that the health of Banco Santos was weakened had already circulated for a long time in the market.”
The day before yesterday, all the newspapers published a story about former President Jos Sarney in which he said that he had transferred his deposits at Banco Santos “in light of rumors in the press and on the street.” That same Friday, another story said: “Over the past four months, after rumors began over problems about the financial health of the bank, the assets of the institution began to lose a lot of money. In four months it lost 700 million reals in deposits.”
I recount all these details because I got a phone call from a reader questioning Folha why we did not report earlier that the bank was not in good shape. An account holder, she felt “betrayed” by the newspaper because it did not have information that would have allowed her to change banks.
Safety reasons
If the rumors were so strong and old, why did Folha not report them? For a simple reason: the newspaper does not publish rumors, even more so if they could provoke a run on assets and break a bank.
This procedure is consecrated in the passage “safety reasons” in Folha’s stylebook: “As a rule, Folha publishes everything it knows. But it can decide to omit information whose publication puts public safety at risk, for a person (kidnaping, for instance) or a company.” That is the case.
Folha was right to not divulge rumors. Its problem was another type. Responsibility that should be taken with topics such as this one does not exempt it from being well informed and orient the news for coverage in the interest of the reader. That is not what happened. During the period in which rumors circulated that Santos was in trouble, the newspaper had three stories that, read now, look like press releases from the bank and give the idea that the bank was fine.
The first was on Sept. 3 with the headline “VIP list” in Mnica Bergamo’s column: “Banco Santos is sending letters from its president, Edemar Cid Ferreira, to a VIP list of people in the country. It is to open accounts at the retail bank that Ferreira is opening which accepts people with income higher than 4,000 reals (about US $1,100 per month).
The other two came out in the same month, on Sept. 24 in the business tidbits column, with the headline “Green light.” The first: “Central Bank just approved a $41 million (US $11.5 million) increase in capital for Banco Santos and approved new directors with Ricardo Gribel as president of the institution.” “It is an unequivocal demonstration of financial strength of the bank,” said Gribel. The other: “Gribel believes that the Central Bank’s decision represents an important step in the history of Banco Santos. He said that the bank will be active, starting now, in the personal segment. The institution registered first-half net profits of 41.1 million reals.”
There was no questioning and no concern about verifying the bank’s situation. Not to report that it was about to fail, but to show that the measures that were being taken were a reflection of the difficulties that the bank was experiencing. No news organization reported clearly that the situation at the bank was difficult. The weekly news magazine “Exame” on Oct. 13 had a story (“Banco Santos changes strategy”) that made it clear that the institution had problems but was not explicit. Its focus was the same as the stories in Folha: positive and uncritical.
It is understandable that Folha did not publish the rumors. But nothing justifies feeding the notion that the bank’s situation was healthy. The interest of the bank was preserved, but not that of the reader.
The ire of readers
The Rio daily “O Globo” published, on its front page in its Monday, Nov. 15 edition, two photographs of assailant Rafael da Silva Alves. In the first, he had just been captured after assaulting a pair of Chilean tourists and was taken to the police station by three officers. The next photo showed the assailant, inside the police station, with his right eye swollen. The story did not use the word torture. It only showed that the suspect started out fine but that a half hour later was shown to the press with a red face and, 20 minutes later, was shown again with his right eye closed and swollen. According to the story, the police denied any kind of aggression.
It is not the first time that the newspaper has shown a suspect injured inside a police station. What was interesting in this case was not the reaction of indignation and revulsion that the photos showed readers of the newspaper. Since he was injured, it was not an immediate reaction. But Wednesday, the Letters to the Editor carried 21 messages against the newspaper.
The meaning of the letters could be summarized by some passages I reproduce: “What does ‘O Globo’ intend to do with initiatives of this type? Protect criminals?” “Is ‘O Globo’ on the side of the people or the bandits?” “I was surprised by the fact that the newspaper protects, in the name of human rights, a bandit who is once again sullying Brazil’s name overseas,” and “There is no longer room in Rio for the defense of human rights for these bandits who don’t even think when they kill.”
According to the editor in chief of the newspaper, Rodolfo Fernandes, there were 74 messages received in three days.
The newspaper’s position was expressed that same Wednesday in an editor’s note: “‘O Globo’ respects the opinions of readers who opposed publication of the photos but understands that modern police in the world do not need to resort to torture to solve crimes. Statistics show that official violence enters the dark hole from a lack of investment in equipment, training and intelligence. Rio is able to dream of a reduction in criminality without the state resorting to barbarity.”
With the inclusion of indignant letters, readers who think differently reacted, and the newspaper included the letters the next day in a debate forum. It also heard from experts who understand that the first wave of reactions are a consequence of fear. “Fear of violence makes Rio residents hand over basic rights to the state” was the subhead in on the story Nov. 15.
I believe that “O Globo” fulfilled its role by publishing the photos of the assailant and questioning the work of police. This is one of the roles of newspapers, which should be in tune with readers but can’t abdicate principles such as defense of democracy and human rights, difficult principles to sustain in periods of crisis and chaos when opinions are radicalized.
The situation is perhaps the most serious in Rio, but the criminality, police violence and formulation of a disillusioned public opinion (which does not see a solution except in the law of retaliation, death penalty and extermination squads), not exclusive to that city.
More than ever, newspapers must be committed to help society confront this specter by opening its pages to wide discussion. Even when this discussion questions its own viewpoints and shoves them up against the wall.
Translation by John Wright
