Corruption in Brazil #2 – The political fallout

Corruption scandals – the political fallout

[Correction – Fatima pointed out that her extra salary payment from last year is to be spread over 6 payments and not ten as I said in my previous post – my apologies for the incorrect detail, but the principle does not change!]

I tried in my previous post to start the process of understanding what is going on currently in Brazil, from the starting point of how it is affecting us personally. Let me try and pursue some of the political ramifications a little further here.

I mentioned the fact that the current President, Dilma Rousseff (PT – Worker`s Party) has so far seemed to stay above the direct implications of bribery but has suffered from the fact that the scandal occurred under her watch. Such accusations harmed her a little in her re-election campaign during the presidential elections of 2014 and reduced her majority somewhat but the Worker`s Party had such a strong lead from the popularity generated by former President Lula and his economic achievements on behalf of Brazil`s lowest socio-economic groups, that she was re-elected anyway.

Recently, however, the implications of the scandal have been reaching closer and closer to home as far as she and the PT are concerned. During his term of office, former President Lula, had seemed impervious to accusations of corruption – he was, after all, on the side of the People, wasn`t he? – but in the last few weeks the accusations of him benefitting directly have begun to stick and he was recently questioned about them, formally, under arrest.

To understand the effect this has had you now need to know that there is a law, here in Brazil, that current politicians, Ministers, Senators and so on cannot be tried by the normal courts that everyone else is tried in. There is a “privileged forum” that supposedly deals with them but it appears that it is relatively simple to obfuscate and delay matters here to the extent that nobody ever seems to be sent to prison if their case is referred to this court, whether it be for corruption or kidnapping or even murder.

This privileged forum was established in the 1889 constitution (they only banned slavery in 1888, remember) and has remained less or more privileged in subsequent constitutions. The most recent version – 1988, written after 20 years of military dictatorship – provides for the Senate to judge the President, the Vice-President, Ministers of the Supreme Court, the Attorney General of the Republic and the Attorney General’s Office for political crimes. And the Supreme Court is tasked to judge the President, Vice President, members of Congress, its own Justices and the Attorney General of the Republic for common crimes and for common criminal offences and crimes of malversation (corrupt behaviour in a position of trust, especially in public office.)

It was alleged in 2013 that about one third of the then 614 members of the Congress were subject to cases going through the Supreme Federal Tribunal, including serious claims of employing slave labour on a cattle estate or ordering the kidnapping of three Roman Catholic priests as part of a land dispute in the Amazon. One of the more bizarre cases from the past was the case in 1963, where Senator Arnon de Mello shot dead a fellow legislator on the Senate floor, only to escape imprisonment, since the killing was considered an accident because he was aiming at another senator.

However, let me get back to former President Lula, who has been arrested and questioned recently over property deals, supposedly done in the names of other people, but relating to substantial properties in which he now resides, which, it is claimed, were paid for with `dirty money` emanating from Petrobras, via one or more construction companies enmeshed in a cartel benefitting from non-competitive bidding for lucrative construction contracts.

President Dilma Rousseff suddenly moved to appoint Lula as her new Chief of Staff, which would have meant he could only be tried under the auspices of the Supreme Federal Tribunal, thus effectively taking him out of reach of the magistrate Sergio Moro, the apparently incorruptible expert on corruption and money laundering who is credited with successful outcomes in several corruption cases and the man whose diligence led to the cracking of the Petrobras case in 2014.

In an unusual decision Magistrate Moro released the text of a telephone conversation between Dilma and Lula which appears to indicate a hurried appointment as her Chief of Staff might be needed to cover up Lula`s involvement in corruption. Both naturally deny this was the intention but, on the basis that there is no smoke without fire, very few voters believed either of them. There was, anyway a move already under way to impeach President Dilma for using illegal mismanagement of the budget to boost her chances of re-election in 2014. The extreme antipathy caused by the release of the text of the conversation has, nevertheless, now become part of the judgement of opposing politicians as to whether they should support the impeachment process or not.

The problem is nowhere near as clear-cut as it may seem, however, since, at almost the same time, there have been new revelations as to the number of other politicians, involving pretty well all the main parties, in a list of over 200 politicos who benefitted from payments by engineering company Odebrecht using money siphoned off from years of corrupted engineering contracts. The key question is whether anybody or any Party is “clean enough” to follow through on such impeachment proceedings.

The Worker`s Party (PT) which has provided two terms of President Lula and two terms of President Dilma Rousseff has already had its financial officer, party treasurer, Joao Vaccari indicted in March 2015, on charges of soliciting payments from Petrobras slush funds and laundering money. Before that, President Lula`s Chief of Staff was indicted and charged under the previous large `Mensalão scandal’.

Presidents Lula and Dilma, and the Worker`s Party rightfully claim credit for extending the scope of corruption investigations including the usefulness of allowing accused corrupt officials to benefit from lighter sentences if they reported others who were taking part – the so-called ‘plea-bargain’. Subsequently, corrupt officials who have been indicted and charged have named Presidents Lula, and Dilma and other leading politicians and officials during the plea-bargaining process. Talk about a good idea coming back to bite you!!

The Impeachment process

The impeachment process against President Dilma was started last year (2015) by the president (or Speaker) of Congress (the lower house of Deputies here, as in the USA). That was Eduardo Cunha, a member of the PMDB (Partido do Movimento Democratico Brasilera – the Brazilian Democratic Movement Party) and the move was ironic for any number of reasons, not least of which being that the PMDB, the largest party in Congress, has, until now been part of the ruling coalition supporting Dilma`s government. It is also clearly ironic because Cunha has been impeached himself for lying to Congress about monies deposited in Switzerland in the Cunha family name, to the tune of at least $5 million – money that has been frozen by the Swiss because it was believed to be part of a money laundering project. Cunha is a right-wing political and religious evangelist, anti-homosexual, anti-abortionist whose Wikipedia entry lists many possible corruption scandals over a number of years in which he has been implicated, some of which are still under investigation whilst others have been quietly frozen.

The impeachment process is now being debated on the floor of the Congress and has at its heart the fact that Dilma`s government borrowed money at very high interest rates to pay for favoured schemes like the Bolsa Familia which have taken large swathes of the population out of considerable poverty.

The key contention seems to be that the money was borrowed from banks that were instructed to recycle the loans themselves for which they would eventually be paid back. The very nature of the loans meant, however, that they did not need to be declared to the central bank – thus hiding, or disguising the scale of the indebtedness of the government.

I have to be honest and say that it seems to me that although the process is rather murky I am not sure it is very much different from IMF loans being renegotiated over a longer period – something that has happened widely in Europe (with Greece, particularly, recently) but also many years ago when the UK had to borrow money from the IMF in Harold Wilson`s time in office. Certainly there are political questions that need to be answered but for impeachment to be successfully cited and proven the process actually has to be illegal. The proponents of impeachment were claiming this week that several articles of the Brazilian Constitution had been broken as a result of this, so we have to wait and see.

The fact is that the impeachment process has become highly politicised, not least by the PMDB which has been part of the ruling Government coalition in the very fragmented Congress and Senate. They are the second largest party in Congress with 66 seats in 2014 against 70 seats for the PT, Dilma`s party. But there are another seven parties making up the ruling coalition of 304 seats out of the 513 seat Congress. Those same nine parties hold 53 of the 81 seats in the Senate, the upper house – 18 of which are PMDB and 12 are PT.

Since the PMDB decided to split from the government coalition four other parties the PP, PR, PSD and PTB, (I will not trouble you with the full titles!) are also seriously considering withdrawing, rather like rats fleeing a sinking ship! If they all do it is almost certain impeachment will follow, whether formally “legal” or not. It seems, however, that no single party can claim they are without corruption. So, Dilma`s claim that the impeachment is nothing more than a “coup” is probably not far from the mark.

The PMDB which currently provides the Vice President, Michel Temer, would appear to be the immediate beneficiary of a successful impeachment. However, although so far unscathed by the Petrobras scandal directly, Temer was investigated, in 2011, in relation to a much earlier corruption scandal back in 1995-98 when he was accused of receiving over R$600,000 (about £100,000 at that time) to do with construction of a port in Sao Paulo.

Parallel to the impeachment, there is also an inquiry looking at whether the 2014 political campaign of Dilma AND Temer might have been supported by corrupt money from Petrobras sources. The Superior Electoral Court, which oversees elections in Brazil, is reviewing the charges that the campaign for Rousseff’s re-election in 2014 accepted illegal donations from the construction companies involved in the Petrobras scandal. If that were proven the whole election campaign may be declared illegal and they would BOTH be booted out. In that case the next person in line to become President is officially Eduardo Cunha – see above!!

But it is likely that there would be a strong campaign, in that case, to insert the name of the runner up in the 2014 presidential campaign, a politician from the PSDB – the Brazilian Social Democratic Party – a man called Aécio Neves. The party`s mascot is a multi-coloured Toucan (think Guinness) so they are called the Toucans here.

The problem would be that both Neves and his Party are mired in many corruption accusations as well, including Petrobras, the Mensalão scandal and many more from Neves time as Governor of the Minas Gerais state. One rather surreal accusation is that as governor he approved the building of five airports in five rather small towns all of them in the vicinity of his family’s land. The largest accusation, however, came from Dilma Rousseff during the 2014 presidential elections when she accused Neves of embezzling R$7.6 BILLION from Government health funds in the Minas Gerais area. He, naturally enough, said she was lying.

What is patently clear is that there is no-one who is in contention of taking over the presidency for whom there is a totally clean sheet in terms of accusations, proven or otherwise. This may explain the fact that some of the organisers of demonstrations against Dilma’s presidency seem to be calling for some kind of military intervention. Many of these same people take the view that Lula’s left-wing government is the produce of communist/Marxist plotting by the blandly named Sao Paulo Forum, set up back in 1995, which is supposed to be trying to establish a fully communist-run South America.

For an illuminating view of how the right wing sees the nature of such a conspiratorial approach maybe you might wish to see a youtube interview of Olavo Carvalho by the America`s Survival organisation, which clearly believes Obama is a Marxist. Watch with caution!

I hope my attempts at explaining the current Brazilian situation have been helpful and illuminating generally. If you are still puzzled by something, then please fee free to comment and I will try ad find out more from local news sources to clarify the situation here. My next blog will deal with the teacher`s strike and its causes and implications

STOP PRESS!! Tonight`s television news has shown massive public demonstrations, presumable organised by the Worker` Party PT, initially, but apparently well supported right around the country making the point that there is a strong feeling AGAINST impeachment. Maybe the tide is turning and Dilma and Lula are striking the correct note in claiming the impeachment is a form of non-democratic COUP. Hmmm? I will try and keep you up to date as things occur.


About Keith Melton - Green Lib Dem

Retired English liberal environmentalist living in Nottinghamshire; spent six years in Brazil. Author of Historical Novel - Captain Cobbler: the Lincolnshire Uprising 1536. Active member of the Green Liberal Democrats - (pressure group in Liberal Democrats) - was Founding Chair of GLD in 1988
This entry was posted in Brazil General, History, Politics and tagged . Bookmark the permalink.

1 Response to Corruption in Brazil #2 – The political fallout

  1. Jane Geraghty says:

    I have read this with real interest and am wondering what will happen next. Please keep us updated jane

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s