US downplays Middle East shipping threat

Reports of a third incident within a month involving Iran and a merchant vessel in the Strait of Hormuz does not yet constitute a “major threat” to commercial shipping, according to a US official.
“I’m not going to apply that label to it,” said US State Department spokesman Jeff Rathke in
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Remembering U.S. Armed Forces Day

By MarEx 2015-05-16 20:20:05

U.S. President Harry S. Truman led the effort to establish a single holiday for citizens to come together and thank our military members for their patriotic service in support of our country.

On August 31, 1949, Secretary of Defense Louis Johnson announced the creation of an Armed Forces Day to replace separate Army, Navy, Marine Corps and Air Force Days.

The single day celebration stemmed from the unification of the Armed Forces under the Department of Defense.

Armed Forces Day Message

As Written by Secretary of Defense Ash Carter, The Pentagon, Saturday, May 16, 2015:

“As our nation marks its 65th annual Armed Forces Day, we are reminded why our men and women in uniform comprise the finest fighting force the world has ever known. They not only continue to defend our country with unmatched skill and devotion; they also help make a better and more peaceful world for our children.

“Today we are especially mindful of the nearly 200,000 service members currently beyond our shores protecting America’s interests. They are standing for our shared values in Europe against those who would turn back the clock. They are standing with our friends and allies against savagery in the Middle East. In the Asia-Pacific – where new powers rise, old tensions still simmer, and half of humanity resides – they are responding to disasters and standing up for a continuation of the decades-long miracle of development and progress underwritten by the United States. And in cyberspace, they are standing with those who create and innovate against those who seek to steal, destroy, and exploit.

“To the more than two million soldiers, sailors, airmen, marines, and coast guardsmen who defend the United States of America – we thank you and your families for answering the call to serve. Know that DoD’s senior leaders and I are as committed as ever to safeguarding you, to ensuring you’re treated with dignity and respect, and, above all, to ensuring that when you’re sent into harm’s way, it’s done with the utmost care. Today, and every day, we are grateful for what you do.”

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Seattle Flotilla Protests Shell’s Arctic Plans

By MarEx 2015-05-16 20:01:56

Hundreds of activists in kayaks and small boats fanned out on a Seattle bay on Saturday to protest plans by Royal Dutch Shell to resume oil exploration in the Arctic and keep two of its drilling rigs stored in the city’s port.

Environmental groups have vowed to disrupt the Anglo-Dutch oil company’s efforts to use the Seattle as a home base as it outfits the rigs to return to the Chukchi Sea off Alaska, saying drilling in the remote Arctic waters could lead to an ecological catastrophe.

Demonstrators have planned days of protests, both on land and in Elliott Bay, home to the Port of Seattle, where the first of the two rigs docked on Thursday.

Kayakers on Saturday paddled around the rig yelling “Shell No.” Others unfurled a large banner that read “Climate Justice.”

Environmental groups contend harsh and shifting weather conditions make it impossible to drill in the Arctic, a region with a fragile environment that helps regulate the global climate because of its vast layers of sea ice.

Allison Warden, 42, said she traveled from Alaska to represent her native Inupiaq tribe, which makes its home in the Arctic. She said whales central to the tribe’s culture are particularly vulnerable to oil spills.

“I don’t know what our culture would be without whaling. It’s at the center of everything we do,” she said. “It’s a different relationship than just going to the grocery store. The whale feeds the entire community,” she said.

The Guardian reports Eric Day, of the Swinomish Indian Tribe, saying drilling in the Arctic would hurt those who live off the land. “This is our livelihood. We need to protect it for the crabbers, for the fishermen,” he said. “We need to protect it for our children.”

Annie Leonard, executive director of Greenpeace for the U.S. said the focus should be on renewable energy in this time of climate change, not dirty fuels. However, The Guardian quotes others present saying the kayaks themselves are petroleum-based products, and the cars that brought them there run on petroleum.

Opponents of the rigs docking in Seattle, a city known for its environmental causes, include Mayor Ed Murray and the City Council.

Shell was bringing in the rigs and moving ahead as planned despite the opposition and a ruling earlier this week by the city’s planning department that the port’s agreement with the company was in violation of its city permit.

“The timeline now is just to make sure the rigs are ready to go,” said Curtis Smith, a Shell spokesman.

The second rig is expected at the port in the coming days.

Earlier this week, the U.S. Bureau of Ocean Energy Management gave conditional approval to Shell’s resumption of fossil fuel exploration in the Arctic, which was suspended after a mishap-filled 2012 season.

The decision was met with approval by some Alaska lawmakers, who said it would bring money and jobs to the state.

Picture insert credit: Nichole Williamson

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U.S., China Clash over South China Sea

By Reuters 2015-05-16 04:38:36

The United States and China clashed over a territorial dispute in the South China Sea on Saturday, as China’s foreign minister asserted its sovereignty to reclaim reefs saying its determination to protect its interests is “as hard as a rock”.

After a private meeting with U.S. Secretary of State John Kerry, China’s Foreign Minister Wang Yi showed no sign of backing down despite Kerry urging China to take action to reduce tension in the South China Sea.

“With regard to construction on the Nansha islands and reefs, this is fully within the scope of China’s sovereignty,” Wang told reporters, using the Chinese name for the Spratly islands.

“I would like to reaffirm that China’s determination to safeguard its sovereignty and territorial integrity is as hard as a rock,” he said. “It is the people’s demand of the government and our legitimate right.”

Wang made the comments at a joint news conference with Kerry, who is at the beginning of a two-day visit to China that is likely to be dominated by deepening concern about Beijing’s ambitions in the South China Sea.

China claims about 90 percent of the 3.5 million sqare kilometers (1.35 million square mile) South China Sea. The Philippines, Taiwan, Malaysia, Brunei and Vietnam also claim large parts of the sea.

China’s rapid reclamation effort around seven reefs in the Spratly archipelago of the South China Sea has alarmed other claimants such as the Philippines and Vietnam.

At the same time, China has expressed its concern about a possible U.S. plan to send military aircraft and ships to assert freedom of navigation in the South China Sea.

Kerry did not respond when asked to clarify whether the United States intended to follow through on what a U.S. official on Tuesday said was a proposal to send U.S. military aircraft and ships.

“SMART DIPLOMACY”

Kerry said the United States had stated its concerns about the pace and scope of China’s land reclamation in the sea.

“I urged China through Foreign Minister Wang to take actions that will join everybody in helping to reduce tensions and increase the prospect of a diplomatic solution,” he said.

He said Wang had agreed that the region needed “smart diplomacy” in order to conclude a code of conduct between the Association of Southeast Asian Nations and China, “and not outposts and military scares”.

While both countries have differences on the South China Sea, they are committed to freedom of navigation and peace and stability in the area, Wang said, adding that China hoped to continue a dialogue to improve understanding on the issue.

The South China Sea dispute is the latest source of friction between the world’s two biggest economies, which have sparred over everything from trade and human rights to exchanges of accusations of hacking.

Despite this, they cooperate in many areas such as climate change, North Korea and Iran.

Recent satellite images have shown that since about March 2014, China has conducted reclamation work at seven sites in the Spratlys and is constructing a military-sized air strip on Fiery Cross Reef and possibly a second on another reef.

The Philippines, a U.S. treaty ally, has called for urgent action.

China rejects U.S. involvement in the dispute and has blamed the United States for stoking tension by encouraging countries to engage in “dangerous behavior”. China has reiterated that the only way to address the issue is through bilateral talks.

On North Korea, Kerry said he was hopeful a potential nuclear deal with Iran could be a “message” for Pyongyang, but added that whether or not North Korea “is capable of internalizing that kind of message, that’s still to be proven”.

Kerry’s trip is intended to prepare for annual U.S.-China Strategic and Economic Dialogue next month in Washington and President Xi Jinping’s expected visit to Washington in September.

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Nigeria Wants to Compete with Philippines’ Seafarers

By MarEx 2015-05-16 02:17:04

The Nigeria Maritime University (NMU) will generate more than six billion dollars in revenue when functional, says Patrick Ziakede Akpobolokemi, spokesman from Nigeria’s Maritime Administration and Safety Agency (NIMASA).

The revenue would be generated from the training and supply of seafarers to the international maritime industry.

The university’s license, which was approved by the Federal Government on May 13, was an initiative of the agency.

“Qualified manpower will be trained in the university to guarantee sustainable manpower for the maritime industry in line with international standards,” he said. “ The university is intended to supply seafarers across the globe, not only our local industries.”

Akpobolokemi urged youths living aimlessly on the streets to come and study. “After graduating, we will give them necessary sea time experience and send them anywhere in world and let them send remittances to the government.”

The Philippines earns annually more than six billion dollars in terms of selling seafarers, he says, we have population that is useful for this application.

“We can do far better than the Philippines.”

The university is set to commence academic activities at its fully developed temporary site in Kurutie and in Warri-South West local government area.

About 32,600 students have already benefitted from NIMASA’s scholarship scheme which has run over the last four years.

The agency remained committed and focused in building human capacity for the Nigerian maritime sector through strengthening of the Nigerian Seafarers Development Programme (NSDP).

The program is designed to train young Nigerians in various maritime professions at degree level.

NSDP has over 2,500 beneficiaries in academic institutions in Egypt, India, Philippines, Romania and the United Kingdom; a number of whom have since graduated.

The agency has successfully established Institutes of Maritime Studies in six Nigerian universities, including the University of Lagos and the University of Nigeria, Nsukka.

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Great Barrier Reef Protection Extended

By MarEx 2015-05-16 00:50:37

Australia will more than double an area near the Great Barrier Reef subject to special curbs on shipping in a bid to protect the environmentally sensitive region, the government said on Saturday.

The decision to include large areas of the adjacent Coral Sea in the area will expand it by 140 percent, or 565,000 square km (218,000 square miles), Infrastructure Minister Warren Truss said in a statement.

The expansion comes as international concern is growing over the reef with the U.N. Educational, Scientific and Cultural Organization (UNESCO) considering putting it on its list of World Heritage sites that are “in danger”.

“The Coral Sea is one of the world’s most distinctive and undisturbed marine ecosystems,” Truss said. “It behoves us to do all we can to reasonably and responsibly protect one of our greatest natural resources.

“Our new measures enhance protection for the Coral Sea – as well as the adjacent Great Barrier Reef World Heritage area – by helping ships traverse the region safely and avoid potentially hazardous areas.”

The Coral Sea is home to the Great Barrier Reef Marine Park which was made a Particularly Sensitive Sea Area (PSSA) for shipping by the International Maritime Organization in 1990.

Expansion proposals put forward by Australia last year were accepted by the IMO at an MEPC meeting in London overnight. The changes should gradually come into force once associated measures are adopted by an IMO committee expected to be held next month.

Busy shipping lanes pass through the area and commercial ships are required to hire reef pilots to navigate through it.

Truss said the changes would ultimately involve a new “area to be avoided” and two-way shipping lanes to keep ships away from reefs, sandbars and shoals.

In 2010 a Chinese coal carrier ran aground in the Great Barrier Reef, provoking an international outcry.

Since then, there has been renewed concern that development, particularly coal mining in Australia’s northeastern state of Queensland, could endanger the reef.

UNESCO is due to make its decision on whether to list the reef as in danger, which would be an embarrassment for Australia, next month, after deferring a decision for 12 months in June last year.

The Coral Sea is an area of the western Pacific stretching out from the Great Barrier Reef to the Solomon Islands, Vanuatu and New Caledonia.

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China, India Sign $22 Billion in Deals

By Wendy Laursen 2015-05-16 00:36:41

China and India signed deals worth more than $22 billion in areas including renewable energy, ports, financing, marine science, mineral exploration and industrial parks, an Indian embassy official said on Saturday.

Namgya C. Khampa, of the Indian Embassy in China, made the remarks at the end of a three-day visit by Indian Prime Minister Narendra Modi, during which he sought to boost economic ties and quell anxiety over a border dispute between the neighbors.

“The agreements have a bilateral commercial engagement in sectors like renewable energy, industrial parks, power, steel, logistics finance and media and entertainment,” Khampa said.

China is interested in more opportunities in India’s $2 trillion economy.

During a visit to India last year by Chinese President Xi Jinping, China announced $20 billion in investments over five years, including setting up two industrial parks.

Since then, progress has been slow, in part because of the difficulties Modi has had in getting political approval for easier land acquisition laws.

Modi, Chinese Premier Li Keqiang and President Xi Jinping discussed issues that have hindered cooperation between the two nations including border disputes in the Himalayas, a heavy trade imbalance in China’s favor and India’s wariness toward China’s dealings with Pakistan, India’s rival.

During his visit to China, Modi addressed students at Tsinghua University and presented a broad argument for cooperation, reports The New York Times. Both China and India face extremist terrorism whose “source is in the same region,” and uncertainty about energy supplies. Additionally, both countries depend on the same sea lanes for international commerce.

“We have a historic responsibility to turn this relationship into a source of strength for each other and a force of good for the world,” tweeted Modi from China on Friday. “This has been a very productive and positive visit. I look forward to working with President Xi and Premier Li.”

On Sunday, Modi will meet with CEOs of top Chinese companies.

Modi encouraged Chinese companies to embrace opportunities in India in manufacturing, processing and infrastructure, announcing “now India is ready for business” with an improved regulatory environment.

“You are the ‘factory of the world’ whereas we are the ‘back office of the world’,” Modi said.

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Cunard: The Man and His Company

By MarEx 2015-05-15 20:04:02

The oddest thing about the founding of Cunard in 1839 is that the company was ever formed by a man like Samuel Cunard at all. The gamble, the challenge, the uncertainty, the sheer modernity of it all would have sat well with a man like Brunel, but not with Samuel Cunard.

To begin with, a Canadian of American parentage does not seem the classic candidate to establish a British icon. And a man so unremittingly prudent, conservative, cautious, austere – and, let’s face it, old – equally doesn’t seem the man to take such huge economic risks or to push the edges of known technology that the founding of the company entailed.

By the time he came to set up the British and North American Royal Mail Steam Packet Company, as Cunard’s company was originally known, Samuel Cunard was already a prosperous businessman and significant figure in Nova Scotia. He was comfortably settled, with his children around him, a comfortable retirement in the cosy glow of local esteem seemed to lie ahead rather than the creation of a commercial revolution.

Cunard gambled everything he had to set up, 3,000 miles from home, a highly speculative and enormously risky venture uncomfortably close to the forefront of known technology. To do it, he even uprooted himself from his native Nova Scotia and took up residence in London. It all seems markedly out of character with everything he’d done before, and with everything he did afterwards when the company settled down to be a singularly cautious and conservative company in the mold of the founder.

What stimulated Cunard’s interest in establishing an entirely revolutionary transatlantic steamship service a mere two years after the first successful crossing by steam was an advertisement which appeared in The Times. The advert, placed by the British Admiralty – at that time responsible for carrying the Royal Mail overseas – invited tenders for the provision of a timetabled steamship service between Britain and North America to carry the Royal Mail. A contract of £55,000 a year was offered.

The spur for the Admiralty’s apparent generosity was the grotesquely vulnerable service provided for the mail by sailing ships; the journey times were “flexible,” with a transatlantic crossing lasting for six weeks, and with no fixed times of departure or arrival. So it was never known when the mail would arrive – or, since so many sailing ships foundered, whether it would arrive at all. What the Admiralty wanted, in line with the thrusting new technology of the Victorian age, was a maritime extension of the brand new timetabled railways on land.

Unable to find Canadian partners for what must have seemed a foolhardy venture, Cunard submitted his successful bid beyond the Admiralty’s deadline, without sufficient finance, with no steamships and with very little knowledge of what, technically, was required. His bid was successful despite all this because, unlike his competitors whose tenders told the Admiralty what they should have rather than bid on the basis of what was asked for.

Cunard’s bid – like the man – was austere and straightforward. He offered simply to provide the required service for the sum offered. He then went on to sign a contract with potentially ruinous clauses – £15,000 payable for any cancelled sailing, and £500 for each day a ship was late. What madness was this?

Nonetheless, Cunard found his financial backing in Scotland and Liverpool, and after having ordered four ships – each twice as big as he’d originally intended – renegotiated the contract, from a position of strength, to be marginally more favorable.

Cunard’s first ship, the 1,156-ton Britannia left Liverpool on July 4, 1840 with Cunard himself on board, and arrived on schedule in Halifax just ten days later. Within a year Britannia and her three sister ships were providing a timetabled weekly steamship service across the Atlantic – the first ever.

Cunard himself made safety his priority – and to this day Cunard has never been responsible for the loss of a single passenger or a single mailbag on the Atlantic run.

Cunard’s conservative nature enabled his company to see off rivals and to take a measured and steady approach when it came to the introduction of new technology.

Within a few decades the importance of the mail contract was dwindling as emigration became Cunard’s next guarantee of prosperity. Between 1860 and 1900 14 million people emigrated from Europe to the United States; of those, 4.5 million passed through Liverpool; and of those, half made the voyage to America with Cunard.

1902 saw the virtually unnoticed launch on the Tyne of a minor Cunard vessel destined for the Mediterranean trade – and also destined to become one of the most famous ships of all time. She was the 13,600-ton Carpathia which, in 1912, achieved immortality under the command of Captain Arthur Rostron when she sped through icefields in the night, without the benefit of modern radar and at a speed greater than she was supposedly capably of, to rescue all the survivors of the Titanic. Captain Rostron, later Commodore of the Cunard fleet, master of the Queen Mary, and knighted by the King, remarked later that a hand greater than his own guided the little ship that night. In all seven Cunard Commodores have been knighted – an honor no other company can match.

But that was glory yet to come; at the same time as Carpathia was entering service Cunard was looking none too glorious, battered as the company’s ageing transatlantic fleet was by ferocious competition from the Germans and Americans. However, Cunard’s fight back led to the introduction of three of the company’s most famous ships – Lusitania, Mauretania and Aquitania. These were the first “floating palaces” in the Cunard fleet – palaces which moved at unprecedented speed. The Mauretania held the Blue Riband for 22 years.

The interwar years, bolstered by the addition to the fleet as part of war reparations the former German vessel Imperator, renamed Berengaria, were successful and lucrative for Cunard – so much so that the company failed to notice the significance of Charles Lindbergh’s transatlantic flight in 1927. Nonetheless, the first real move from reliance on transatlantic revenues was made when, in 1922, Laconia undertook the first-ever world cruise.

Cunard did not set out to create in 1928 what King George V called “the stateliest ship now in being”, and nor did it intend to give birth to a ship which her last master, Captain John Treasure Jones, said was “the nearest ship ever to be a living being”.

What would become Queen Mary would symbolize the emergence of Great Britain out of the Great Depression and when Queen Mary, wife of King George V, became the first monarch to launch a merchant ship, a job which she accomplished with a bottle of Australian wine rather than the traditional French champagne, millions of the King’s subjects heard his wife’s voice for the very first time.

Queen Mary would be joined eventually by Queen Elizabeth and the real Golden Age of transatlantic travel would begin in the late 1940s as the biggest and fastest ships on the Atlantic did what they were built to do. This was the era of film stars and royalty being photographed by hundreds of press photographers as they stepped ashore in Southampton or New York. But in 1958 the ghost of that Lindbergh flight caught up with Cunard, as for the first time, more people crossed the Atlantic by air than by sea. The end was in sight.

A decade after 1957 the company’s fleet was reduced from 12 to two and yet, in the face of all evidence to the contrary and in what seemed to many an act of lunacy equal only to Samuel Cunard’s original madness in establishing the company, the Cunard board – as it pensioned off two transatlantic liners which had been defeated by the jet aircraft – was planning to construct another transatlantic liner.

And so Queen Elizabeth 2, a true transatlantic liner with a service speed of 28.5 knots and a 1.5 inch thick hull, but which, with its ability to navigate both Panama and Suez, could be a cruise ship too, was launched by the Queen in 1967. QE2 would defy the skeptics and become the most famous ship in the world having a career spanning over 29 years and a record unmatched by any other – including sailing over five miles which is further than any other.

After an independent existence lasting 131 years Cunard was acquired by Trafalgar House in 1971 and would spend the next 30 years making the occasional acquisition here and there and investing in a new engine plant for QE2 which today remains the biggest job of its kind ever undertaken.

It was generally thought at that point that QE2 would be the last ever transatlantic liner. When she’s gone, everybody said, there will never be another. How wrong everybody was.

In April 1998 the mighty Carnival Corporation purchased a broken Cunard and to the surprise of many one of the first things they announced was the construction of a new transatlantic liner. When Queen Mary 2 entered service in 2004 she was the largest, longest, tallest, widest and most expensive liner ever built and was joined by Queen Victoria in 2007 and Queen Elizabeth in 2010.

As Cunard’s 175th anniversary approaches, the three largest ships ever built for the company proudly carry the Cunard name and will take that name far into the future.

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Dry Bulk Shipping Recovery Expected in 2017

By MarEx 2015-05-15 19:22:13

The dry bulk shipping market is not expected to return to profitability until 2017, despite a modest recovery in earnings anticipated over the next two years, according to the latest edition of the Dry Bulk Forecaster, published by global shipping consultancy Drewry.

The dry bulk market has always been sensitive to demand fluctuations and seven years ago a demand-driven peak in the market made many owners cash-rich, helping them survive the weak market that has persisted since. While this market trough has been supply-driven, with the industry suffering several years of unprecedented oversupply, the more recent demand slow-down has added to market woes, demonstrated by the conversion of some dry bulk vessels to tankers in a desperate attempt by owners to return to profitability.

“Anaemic demand growth is here to stay, especially as the trade development in coal and iron ore into China is expected to decline further,” commented Rahul Sharan, Drewry’s dry bulk shipping lead analyst.

Iron ore and coal form almost two-thirds of the global dry bulk market and China has been the largest influencer. One of the main concerns in China has been deteriorating air quality, hence the Chinese government shifting its focus from polluting, coal-fired power plants to renewables and cleaner sources of energy. This is casting a shadow over the thermal coal market which will have a detrimental effect on bulk shipping demand.

On the supply side, to date 2015 has seen a record number of demolitions. The average demolition age has fallen and if this trend continues, many more recently built vessels are likely to face a similar fate. Continued high demolition, conversions and low vessel deliveries will therefore keep a check on the overall fleet size.

“We do not expect any noticeable recovery in bulk shipping freight rates this year as the market remains severely over-tonnaged,” added Sharan. “While we expect some improvement in earnings through 2016, this is unlikely to be sufficient for freight rates to reach breakeven. However, we anticipate that the sector will return to profitability by 2017, provided current rates of demolitions persist and ship owners refrain from placing new orders.”

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Petrobras Bribes Estimated at $2.1 Billion

By Reuters 2015-05-15 18:46:19

Brazilian investigators believe 6.19 billion reais ($2.1 billion) in bribes were moved in the Petrobras corruption scheme, prosecutor Deltan Dallagnol said on Thursday.

Prosecutors seek to restore 6.77 billion reais to public coffers through fines and the return of stolen funds, he said at a televised press conference to present criminal charges against 13 people, including four former congressmen.

Three of the ex-lawmakers were preventively detained on April 10, the first politicians arrested in the 14-month-old probe. One is from the ruling Workers’ Party and the other three belong to the smaller opposition Party of Solidarity.

Dallagnol, speaking from the southern city of Curitiba where Brazil’s largest-ever corruption investigation began, called the charges “emblematic” and said they showed the prosecution had entered the political nucleus of the kickback scheme.

Prosecutors accused former executives at Petrobras and two dozen engineering firms of inflating the value of service contracts and funneling the excess funds into their own bank accounts and to political parties.

The Supreme Court in Brasilia is also investigating 34 sitting politicians on suspicion of receiving bribes but none have yet been formally charged. Elected officials enjoy special legal protection in Brazil.

One of the former congressmen charged on Thursday is suspected of taking bribes in exchange for helping a public relations firm and a biotech lab secure contracts with state-run bank Caixa Economica Federal and the health ministry.

Another is thought to be the main distributor of kickbacks to the Party of Solidarity.

All are tied to the Petrobras probe by Alberto Youssef, the black-market money changer who agreed to reveal beneficiaries of the corruption scheme in exchange for a lighter sentence.

Federal Judge Sergio Moro will decide whether or not to accept the charges. If he does, the former congressmen will join the 97 other people who have been indicted.

($1 = 2.99 Brazilian reais)

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