Brazil
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By all indications, Brazil was headed for trouble. Still, the government managed to distance itself from the problems, at least for the time being, even though the signs were everywhere. In March 2014, the Federal Police (Polícia Federal, PF) discovered that a gas station in Brasília was a front for illegal financial activities. The realization that the same gas station washed cars and laundered money was irresistible: the investigation conducted by the Federal Police in conjunction with the Federal Ministry of Public Affairs (Ministério Público Federal) soon came to be known as operation ‘Car Wash’ (Lava Jato).10 The money trail ended in Brasília, but it started in a company based in the city of Londrina, in the State of Paraná. The operation was under the jurisdiction of Judge Sérgio Moro of the 2nd Lower Federal Court11 in Curitiba, Paraná. This federal court is one of several throughout Brazil established by the Federal Board of Justice in 2003 to investigate cases of money laundering. This was no small incident, and it did not take long for Brazilians to realize the gravity of the situation, and how much money was involved. The investigation uncovered a billion-dollar corruption scheme in Petrobras involving several people at the highest levels of the company, the sixteen largest construction companies in the country organized into a cartel and the five main political parties in Brazil – PMDB, PP, PSD, PT, PSDB.12 Everything was interconnected: construction projects, contracts and bribes to politicians, political parties and public employees. The construction companies would meet regularly to agree on collusive bidding schemes for Petrobras projects. They would settle on prices, divide contracts and agree on the amount of bribe money to set aside for political parties and for the politicians in on the scheme.
The investigation uncovered the involvement of all kinds of people in the enormous corruption scheme – public servants, dollar buyer-sellers, businessmen and women and politicians – and demonstrated how, during the previous thirty years, corruption had become a viable form of governing in Brazil at all levels of public life, federal, state and municipal.13 Never before had so many top executives and large business owners been sent to jail. This list included the presidents of the following construction companies: Andrade Gutierrez, Camargo Corrêa, OAS, Queiroz Galvão and UTC Engineering; in addition to the vice-presidents of Engevix and Mendes Júnior engineering firms. And, as if this were not enough, in June 2015 the Federal Police sent Marcelo Odebrecht to jail. Mr Odebrecht, an engineer, was the president of the largest construction company in the country, and the second largest privately owned corporation in Brazil.
Along with the construction and engineering companies, the Curitiba investigation disclosed the breadth and depth of the relationship between the business community and the political system in Brazil. One government administration leaves, the next one comes in and companies alone or in cartels pay for benefits, from both state-owned companies and powerful government departments. In exchange for tolerance and access, they finance political parties and pay politicians individually. The tip of the iceberg was exposed by the dollar dealers arrested by the Federal Police in Paraná, Alberto Youssef, Carlos Habib Chater, Nelma Kodama – and Paulo Roberto da Costa, a former director at Petrobras, who was also sent to prison. According to several of them, Petrobras senior managers had been accomplices in the pillage of the company, each of them representing a political party. Others were in charge of the money laundering and distribution of proceeds.
The presidential electoral campaign began in June 2014. It was a tough race, which resulted in a very close outcome, leaving no doubt as to how divided the country had become. Only two candidates remained in the second round, Dilma Rousseff of the Workers’ Party and Aécio Neves of the Brazilian Social Democracy Party. Both parties claimed victory before the ballots had been counted. But on 26 October 2014, Dilma Rousseff was re-elected with 54,501,118 votes (51.64%) to Aécio Neves’s 51,041,155 (48.36%).14 Brazil was, indeed, divided.
Four days after the results were announced, Aécio Neves and the Brazilian Social Democracy Party formally asked the Superior Electoral Court for a recount. They wanted the electoral process to be audited and verified by specialists chosen by a coalition from the losing parties. They alleged that the election results were false, but the intention was to cast doubt over the legitimacy of Dilma Rousseff’s mandate, to have her victory annulled. It was the first time since the military dictatorship that a losing candidate had challenged election results and attempted to veto a majority vote. The country was becoming increasingly radicalized. Several factions played up the dichotomy, which rendered dialogue – previously difficult – impossible. In the public arena, and even in the most private spaces, political discussions had become highly contentious, and ugly.
President Rousseff was slow to realize the severity of the crisis, and the speed with which it was unfolding. Throughout the campaign, she had promised that upon her re-election she would keep economic policies on track. She pledged her government would not adopt restrictive or recessive measures – it was precisely the opposite of what her adversaries were promising. President Rousseff underscored economic policies she considered inviolable. She declared she would maintain government investment in education, healthcare, housing and social work and would also safeguard social programmes, including the right to holidays and to social security (including the annual extra month, the ‘13th salary’). Nonetheless, for three weeks after being sworn in, President Rousseff was holed up inside the Planalto Palace in Brasília; then finally, in January 2015, she did exactly the opposite of what she had promised. The administration began the new mandate with a complete about-turn: the developmentalist agenda for which she had been elected was discarded. They took aim at unemployment insurance, survivor pensions and salary allowances, among other policies. The administration adopted a plan that was both anti-interventionist and orthodox, in practice very similar to what the opposition had proposed. It was a plan that, during her campaign, President Rousseff had referred to as a quick road to ‘recession, unemployment, salary decreases and an increase in socio-economic inequality’.15
The president’s disastrous manoeuvres led to an economic policy entirely in opposition to what she had promised. It seemed as if she believed that, given the fiscal problems and the economic crisis, there was nothing left to be done except to rely on traditional solutions. The government paid dearly for this about-turn. President Rousseff had managed to destabilize her base and provide ammunition to the opposition, who were still trying to delegitimize her mandate.
It was probably at this juncture that a window of opportunity appeared. Between the start of President Rousseff’s second term in January 2015 and the impeachment vote in the Senate in August 2016, an increasing number of people adhered to the idea that democratic presidential elections could be vetoed, that their own will could be imposed on society. It is one thing to criticize and question poor government management which led to a rampant increase in public debt; it is another thing entirely to attempt an institutional change through frankly dubious legal manoeuvres, with the clearly defined goal of removing the president from office.
This group brought together a wide variety of interests hostile to the federal government, including business people, industrialists, bankers, members of parliament, journalists, judges and some sectors of the middle class. They favoured legislation that served their immediate interests, and organized an opposition coalition that put forth unified objectives, while operating independently.16 And beyond that, they had a goal in common, which was to topple the government. This coalition was able to instigate protests and to bring together a handful of parliamentary leaders willing to act against the interests of the government, from within and from outside of congress, among whom were Eduardo Cunha, then president of the Chamber of Deputies; Michel Temer, then vice-president of Brazil and the president of the Brazilian Democratic Movement Party, and Senador Aécio Neves, then president of the Brazilian Social Democracy Party. Over the course of a year and a half, an unbelievable series of crises befell the Rouss
eff administration. It was a very long list: unemployment increased and the economic situation deteriorated; accusations of corruption flowed in from Curitiba, initially focused on the Workers’ Party, especially on the former president, Lula; protests and intolerance were ever more common; Congress systematically boycotted the administration’s initiatives; meanwhile, the vice-president openly conspired to take over the leading role. Matters went from bad to worse when the Fundão dam burst, leading to several deaths in Mariana, in the State of Minas Gerais. It was the worst environmental disaster Brazil had ever experienced. On the heels of that calamity, there was an outbreak of the Zika and dengue viruses, the handling of which proved how ill-prepared the government was to cope with such emergencies, not to mention the lack of policy.17 Not even Brazil’s defeat in the 2014 World Cup match against Germany could further upset the country. If up till then the major crises seemed to happen mainly on the football field, they were now a part of daily life.
The opposition coalition armed themselves with pragmatism. Their plan was to champion the government’s downfall and to determine who should take over in the interim and which changes should be implemented in the short term. They came up with a scripted policy wherein the crisis in Brazil was, in essence, inextricably linked to the government in general and to President Rousseff in particular. And yet there was something different in this assault; it remained strictly within the boundaries of democratic ritual. Making use of the tools of democracy and following the law to the letter in order to oppose democratically established values and institutions was a manoeuvre entirely unheard of in Brazilian history.
The foundation of the manoeuvre was the so-called ‘fiscal pedalling’, the term used by economists to describe government postponement of a given payment from one month to the next, or from one year to the next. The recourse inflates the Treasury’s cash position and artificially ameliorates the primary surplus, which allows the government to present fictitiously improved financial results. The system had been used by previous administrations; in fact, the metaphor could not be more appropriate – after all, if the cyclist stops pedalling, the bicycle falls over.18
In December 2015, the call for impeachment was taken up by then president of the Chamber of Deputies, Eduardo Cunha.19 Mr Cunha proved to be a very strong leader. He managed to take congressional corruption to an entirely new level by obtaining illegal campaign funding for nearly 100 candidates to the Chamber of Deputies. His political power derived from his position of leadership over a cohesive block of nearly 250 parliamentarians from eight different political parties, whose relationship in some cases was one of cronyism. This group was known as the ‘blocão’ – big block. Mr Cunha, an adversary of the administration since 2014, regularly relied on blackmail and threats to his opponents. The call for the impeachment of President Rousseff was passed in the Chamber of Deputies on 17 April 2016 and confirmed by the Senate on 31 August 2016. Mr Cunha was arrested and sent to jail and later sentenced to fifteen years in prison for corruption, illegal remittances of moneys offshore and money laundering, as determined by Curitiba Federal Judge Sérgio Moro.20
It will take some time before we are able to fully access what took place in Brazil over the course of 2015 to 2017. Routine procedures in adherence to the rule of law were used to serve interests contrary to the democratic values preserved in our public institutions. This manoeuvre was undertaken and accepted by a portion of the Brazilian population without due critical judgement and without recognizing the cost to Brazil’s democracy.21
Today everyone, or nearly everyone, acknowledges that President Rousseff committed grave administrative infractions. Furthermore, she did not fulfil her administration’s fiscal obligations and, during an election year, she approved highly irresponsible government spending. It is also true, however, that the impeachment was justified by a congress whose members were in large part accused of corruption. The government’s infraction was serious, but the opposition had a clear agenda: to remain in power using the very same methods that they had accused President Rousseff of employing. This leaves us with an unavoidable question: is the use of these methods to remove an elected official justifiable in the name of the public good? The legal mechanisms used by the opposition deputies were utilized for the same reasons – or even more spurious ones – than those of President Rousseff, accused of governing ineptly.
Senator Rose de Freitas,22 leader of Mr Michel Temer’s provisional government, went straight to the point in an interview just days before the impeachment vote: the so-called ‘fiscal pedalling’ technique was a mere formality, a pretext. President Rousseff’s demise was based not on those accusations alone; it was the entire scenario. ‘Why did the government topple? In my opinion, it had nothing to do with this “pedalling” business, [that] was beside the point. Quite simply, the government was in a state of paralysis, with no direction and without any basis to govern. People were fed up and Congress wouldn’t give her the necessary votes to pass legislation.’23 The senator was being sincere, but the justification of the ‘pedalling’ accusation had become difficult to sustain. There was no unanimity of public opinion as there had been in the case of former President Fernando Collor de Mello’s impeachment proceedings and subsequent resignation in 1992. Brazilian citizens remained divided: on 13 March approximately 500,000 protesters demonstrated on Avenida Paulista (São Paulo), screaming, ‘Out with Dilma!’ and beating pots and pans from their apartment windows. Five days later, a significantly smaller number, approximately 100,000, took to the same avenue with placards reading, ‘There will be no coup’.
A telling sign of the times was the two-metre-high metal fence built around the Ministries Esplanade (the location of many important federal government buildings in Brasília), ordered by the Federal Secretariat of Public Safety precisely on the day of the impeachment vote. There was a clear, quasi-didactic meaning behind the move: to separate those demonstrating in favour of impeachment from those demonstrating against. The wall transferred the divide in Brazil from the realm of the symbolic to that of the real, right inside the capital city. As far as the opposition was concerned, the solution to the national crisis was to attack the Workers’ Party government, which they blamed for the chaotic state of affairs. They believed Vice-President Michel Temer could work a miracle, that he could put together a team capable of ending the crisis in the short term. Government backers, on the other hand, denounced what they called a coup d’état and what they saw as the attempt to obstruct the democratic process. There were also those who questioned the probity of the entire process. ‘Paralysis, lack of direction and of ability to manage the country may be motives to want to overturn the government – and thousands took to the streets demanding precisely that, but they are unjustifiable causes for impeachment,’ noted journalist Elio Gaspari in his Folha de S. Paulo newspaper column, the day before the impeachment vote. He explained it didactically: it was not constitutional.24
The impeachment of President Dilma Rousseff laid bare just how serious the crisis was in Brazil. The situation was made worse by the prevailing loss of faith in politics and in politicians. As a matter of fact, what followed only increased the cynicism, as example upon example of poor governance came to light. Instead of behaving with transparency and honesty, in keeping with the democratic values so painstakingly incorporated into the system, many politicians who came into power behaved in the same old ways. They did not preserve the social gains of previous governments; instead many of them went back to (or had never given up) former habits – patrimonialism, political patronage and cronyism – with ever increasing boldness.
Is democracy in Brazil at risk? The question cannot yet be answered. One thing is certain: democracy is always vulnerable if and when society turns a blind eye to the protection of rights. In a profoundly unequal society, such as Brazil’s, the focus of the distortion must be immediately on human rights and the guaranteeing of said rights, which comes through government financial support.25
Institu
tions cannot protect themselves, and using the rules of democracy to undermine them destroys them from the inside out. This cannot be overstated. After all, one of the first measures undertaken by the Temer administration was to eliminate the various ministerial secretariats dealing with civil and human rights, whose principle goal was to decrease inequality in Brazil and to promote social inclusion. These were the former departments for the protection of women, indigenous peoples, people of African descent and inhabitants of the quilombos. And with the make-up of his Cabinet, President Temer revealed the full extent of his indifference to a pluralistic society. The photo op for his new Cabinet was of white males exclusively, mainly of his generation and socioeconomic group.
A certain imbalance has resulted in the way power is exercised in Brazil. The dynamic has radically changed among the agencies in charge of the balance of power. Especially notable (in such a short time frame) has been the dramatic decrease in authority in the Executive and Legislative branches, as they have failed to curb practices of clientelism and corruption. Currently in Brazil, both the Executive and the National Congress have suffered great losses in their administrative capability, legitimacy and reputation. The situation of the Judiciary, on the other hand, has been diametrically opposed – its sphere of influence has expanded significantly. The risk of this imbalance is that members of any one of the powers begin to view themselves as the sole and virtuous mirror of society. If it is truly fundamental that corruption – so entrenched right now as to be virtually a natural phenomenon – be confronted, it is also crucial that the balance of power among the branches of government be re-established. Otherwise there is a risk there will be untoward intrusion among them as they carry out their responsibilities. And there is a single means by which to prevent the abuse of power. It is called the Constitution.