IPG’s Mullen Lowe seems to have settled its rather embarrassing legal problems in Brazil, closing its Brasilia office in the process.
Former Borghi/Lowe executive Ricardo Hoffman has been indicted for making payments to a Brazilian congressman through shell companies owned by himself. IPG has agreed to pay a fine amounting to $13m although there may be more to come.
It appears to be all part part of a massive gravy train fuelled by Brazilian oil giant Petrobras – Operation Car Wash as it’s termed – which, in the good times, was dispensing favours to all and sundry. Hoffman is accused of bribing people in two government departments to give Lowe business.
Brazil’s economy has gone into reverse of late, despite hosting the last FIFA World and the forthcoming Olympics. Petrobas’ oil has also plummeted in price.
To an extent this is just part of the collateral you get running a multinational ad agency. You choose people with local connections (legal or otherwise) and leave them to get on with it. I was chatting to the CEO of a big network the other day and he said the worst thing about the job was that you’d get the call to go somewhere (in his case he mentioned a city on the Bosphorus) to find out how the finance director had managed to run off with several hundred thousands.
Wonder what all those agencies, Wieden+Kennedy among them quite recently, make of their investment in Brazil?