Brazil on the Brink

Brazil on the Brink

At a pro–Workers Party demonstration in São Paulo, March 24 (Ninja Midia / Flickr)

President Dilma Rousseff of Brazil faces a growing crisis: millions of citizens are clamoring in the streets for her impeachment, and her closest allies have been implicated in investigations of corruption within Brazil’s state oil company, Petrobras, and kickbacks by construction firms in return for government contracts. Her beleaguered supporters warn of an impending coup and accuse Brazil’s Globo media empire of sabotaging Rousseff’s administration. In a March 25 editorial, the Washington Post advised Rousseff to step down for the good of her country, in order to avoid sustained conflict.

This amounts to a call for the end of fourteen years of government by the Partido dos Trabalhadores (PT), or Labor Party, which emerged from a series of late–1970s labor strikes in the industrial belt around São Paulo, and rose to power through a painstaking process of party-building and controversial alliances. Along the way, the PT expanded from its initial base in labor unions and social movements to make connections to big business and forge an unlikely coalition with a range of parties in Brazil’s multiparty system. The PT’s investment in redistributionist social policies in a period of economic growth lifted millions of Brazilians out of poverty, but the recent return of economic hard times has frayed its governing coalition. And the corruption investigation has revealed the PT’s participation in an extensive network of kickbacks and favors between Brazil’s largest corporations and its elected officials.

Things are not all bad for Brazil, suggest the Post’s editors: “In fact, the silver lining of Brazil’s crisis is that it reflects the country’s maturing democratic institutions and embrace of the rule of law. The federal judge leading the kickback investigation, Sergio Moro, has become a national hero.” But Moro’s hero complex is part of the problem. Until mid-2015, Moro carried out a model investigation, patiently following the money trail as it led to the revelation of regular payoffs by Brazil’s largest construction firms to elected officials, including politicians from both the governing coalition and the opposition. Unlike previous investigations, which tended to steer clear of Brazil’s major capitalists, Moro’s investigation resulted in indictments of big fish like Marcelo Odebrecht, CEO of the construction firm named after his family. Odebrecht is the Halliburton of Brazil—it has grown to preeminence through connections and government contracts, and the arrest, imprisonment and conviction of its CEO marked a radical change from business as usual.

Over the last six months of 2015, two things happened to send this patient investigation careening off a cliff: Moro became a celebrity, and the money trail led to Luiz Inácio Lula da Silva. Lula, Rousseff’s mentor and predecessor, is a former metalworker and labor leader turned president, and the key figure in the transformation of the PT from scrappy socialist outsider to governing powerhouse. Moro’s apotheosis was inevitable: in the Brazilian judicial system, federal judges are given ample investigative powers and are under heavy pressure to produce convictions. Televised press conferences are par for the course, and the handsome, confident Moro was born for the part. Globo, the media empire that has served as Brazil’s kingmaker (and breaker) since 1964, gave Moro its “personality of the year” award for 2014. Moro ceased to be a civil servant and became a superstar, feted as the savior of the fatherland by the opposition press.

Lula’s implication may also have been inevitable, as nearly every Brazilian politician has benefited from corporate slush funds. Petrobras and major private firms like Odebrecht have served as ATMs for Brazilian politicians, furnishing them with cash on demand for campaign expenses and other needs. Given this tradition, Lula’s personal perks seem remarkably small-scale—a condo on the outskirts of São Paulo, a country house in an unassuming rural precinct, and an aluminum boat. Donald Trump might bestow such trinkets on his driver. Invective against Lula often smacks of resentment that this once-impoverished upstart might enjoy some luxuries in his retirement.

Politically, however, Lula is Brazil’s biggest fish, and investigation of his involvement quickly moved from the sideshow to the big top, crowding out more substantive endeavors. Like the governing coalition, the opposition comprises a range of parties, led by the Brazilian Social Democracy Party (PSDB), a centrist social-democratic party with an upper-middle-class base. That opposition has been hungering for Lula’s indictment since 2004, when, as sitting president, he emerged miraculously unscathed from a similar investigation. As the noose tightened in recent weeks, Rousseff rashly moved to protect Lula by naming him her Chief of Staff, a position that would insulate him from prosecution by any body other than Brazil’s Supreme Court. Infuriated by Rousseff’s machinations, Moro—in a flagrant violation of due process—released wiretapped conversations between Lula and Rousseff. Depending on one’s interpretation, those conversations may hint at collusion to obstruct Lula’s prosecution. (Conversations between Lula and other allies, such as Rio de Janeiro’s crass and disdainful mayor, are more revealing of political chicanery.) They may not stand up as evidence in a court of law, given their debatable content and their irregular public release. But Moro seems intent on trying Lula and Rousseff in the court of public opinion.

In the late 1970s, Lula and his cohort began building a Labor Party committed to redistribution of wealth, succeeding against the odds in a country marked by a long history of radical inequality. Although it once described itself as “the party of ethics,” in its rise to power it took on the same venal practices common across the Brazilian political spectrum. Is the PT more corrupt than other Brazilian parties? Not likely: opposition politicians also figure prominently on Odebrecht’s covert “big list” of regular kickback beneficiaries. The PT does appear to have organized kickbacks more efficiently than any prior governing party, turning what was once subject to ad hoc, personal negotiation into regular supplemental income. As the Post notes, revelation of such schemes is salutary, and if it forces the transformation of the PT and other parties, so much the better.

It bears noting, however, that Rousseff has not yet been personally implicated in this scheme—calls for her impeachment hinge on narrower budgetary manipulation. Rousseff has been clumsy, and too commited to protecting her mentor. But her removal would primarily benefit erstwhile members of her coalition who are now angling for her impeachment. If Rousseff steps down or if two-thirds of Brazil’s Congress upholds her impeachment, it will bring Vice President Michel Temer to power. Temer hails from the PMDB, or Democratic Movement Party, the soft center of Brazilian politics since the early 1980s. The PMDB is as implicated in the corruption scandals as the party of Rousseff and Lula. On March 29 the PMDB announced that it was leaving the governing coalition, effectively joining the opposition and pressing for impeachment. Top PMDB officials seem to hope that Rousseff’s ouster will sate enraged public opposition and foreclose more sustained investigation.

Plunging global commodity prices have wrought havoc on Brazil’s economy, exacerbating political conflict. The political crisis, in turn, threatens to delay economic recovery. In this context, calls for short-term solutions are understandable. But in Brazil, short-term solutions have a way of enduring: on March 31, 1964—fifty-two years ago this week, an anniversary that has escaped no one’s notice—Brazil’s Armed Forces seized power, ostensibly to resolve a similar crisis. They hung on for over twenty dark and repressive years.

It would be a tragedy if the ongoing investigation leads to another irregular transition in power. And removing Rousseff and the PT in order to place Temer and the PMDB in power would be a farce. Temer would face potential impeachment proceedings of his own. It is likely that he could only muster a governing coalition by establishing a broad political accord protecting many politicians involved in the corruption scandals. The next several elected officials in the line of constitutional succession are equally embroiled, posing a serious dilemma.

Brazil stands to benefit from the revelation and prosecution of corruption, but those benefits can only be realized if due process is preserved. Lula and Rousseff should neither be above the law nor prosecuted outside it. Brazil’s best chance of emerging from the crisis with its democratic institutions intact may be to continue the corruption investigations while holding off on a hasty ouster of Rousseff that smacks of a cover-up.


Bryan McCann is Professor of Latin American History at Georgetown University, and the author of Hard Times in the Marvelous City: From Dictatorship to Democracy in the Favelas of Rio de Janeiro (Duke, 2014).

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