Sergio Moro, the #vazajato, and Reflections on Stephenson by Mark Langevin

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Matthew Stephenson’s The Global Corruption Blog is the recent epicenter of discussion and debate on the behavior of Justice Minister and former judge Sergio Moro in light of The Intercept’s #vazajato revelations. Stephenson is a notable authority on corruption and anti-corruption efforts, and his successive posts (with open comments) on the #vazajato reflect the importance he gives to the question of impartiality and due process in the Lava Jato prosecutions and convictions between 2014 to 2018 and directly involving former judge Moro. I do not personally know Prof. Stephenson but I applaud his transparency, his efforts to detail his arguments, and his attention to this brewing scandal in Brazil.

In his latest post, “The Biggest Beneficiary of the Lava Jato Leaks Is Jair Bolsonaro,” Stephenson argues that The Intercept revelations based on leaked conservations among the Lava Jato prosecutorial taskforce and judge Moro may in the end benefit President Jair Bolsonaro over his opponents. Stephenson writes,

“I worry that the biggest beneficiary of VazaJato may be President Bolsonaro, and the biggest loser may be the Brazilian left. I say “worry” because I view Bolsonaro as a dangerous bigot and wanna-be authoritarian, one who is also likely to worsen Brazil’s corruption problem.”

He identifies four reasons behind his concern.

  1. The Intercept revelations undermine Sergio Moro as Justice Minister and one of the most important checks on President Bolsonaro’s authoritarian reflex and “lawless, corrupt, or outrageous tendencies.”

Here Stephenson argues that while Moro may demonstrated poor judgment by joining Bolsonaro’s cabinet, the move did place the former judge in position to constrain the worst of the president’s tendencies. That is, Moro could advance the anti-corruption campaign (including new legislation) while preventing the president from intervening in ongoing corruption investigations and prosecutions. Accordingly, #vazajato undermines this check and balance effect by undermining Moro’s popularity and credibility.

Stephenson’s reasoning assumes that Moro is a just and decent person who works in good faith, whether in his capacity as judge during the Lava Jato trials or as Justice Minister. With respect to The Intercept’s revelations, he finds the evidence of judicial misconduct “less clear” than The Intercept and others suggest, and finds that claims of Moro’s “ideological bias especially flimsy.”

In this blog post, Stephenson does not treat earlier reporting and debate of Moro’s judicial misconduct, including Alex Cuadros’ fair minded piece for The Atlantic on February 2, 2018. Cuadros investigates the aftermath of Lava Jato and reports,

“In March 2016, then-President Rousseff appointed Lula to her cabinet. Moro reacted by releasing a secretly recorded conversation in which she implied that the purpose of the appointment was to shield Lula, her mentor and ally, from prosecution. For exposing a private conversation with a sitting president, Moro was reprimanded by a Supreme Court justice. But another justice blocked Lula’s appointment, and he was soon indicted. Rafael Mafei, a law professor at the University of São Paulo, was among those to suggest that Moro should be removed from the case. “Personally, I don’t have confidence in Moro’s impartiality to judge Lula,” he said. Still, it was Moro who handed down Lula’s conviction in July last year.”

Cuadros does not treat all the criticisms of the Lava Jato, but his article does pierce the cheerleading bubble and raise questions about the motives driving the zealous prosecution carried out by Lava Jato taskforce and the behavior of Moro. Geoffrey Robertson, Lula’s international roving attorney and representative at the United Nations Human Rights Committee, argued in Foreign Affairs that Brazil’s federal judicial system is chock full of authoritarian attributes that open the door to rampant judicial misconduct. In the case of Lula, Robertson finds that Moro failed to guarantee the constitutional due process rights afforded to any defendant.

It is interesting that Stephenson avoids inclusion of any early, credible and critical treatment of Moro’s judicial behavior and the Lava Jato taskforce’s practices (it may be that Stephenson has treated these in earlier posts, but without citing them). Could Stephenson’s avoidance of these earlier claims, backed up by the published #vazajato leaks, lead him to prematurely conclude that Moro worked in good faith and any mistakes were not motivated by personal or political motives?

I do not think we can draw any precise conclusions about the motives behind Moro’s conduct or conversations at this point. However, there was plenty of evidence of judicial misconduct before the #vazajato and reason enough for Moro to step aside from overseeing Lula’s first trial on corruption charges. On July 13, 2017 I wrote of the Lula X Moro confrontation,

“Judge Moro has zealously pursued the former president through Brazil’s odd system for Federal judges that allows them to act as prosecutor, jury and judge all together in a confusing whirlwind of conflicting institutional interests. Rather than tread lightly and guarantee constitutional due process, Judge Moro used every power under his authority to publicly condemn Lula before the trial began, and may have engaged in unethical or illegal acts related to the wiretapping of then President Dilma.”

Also, I was increasingly concerned over Moro’s national and international appearances, some of which were financed by organizations with a direct interest in the politics of Petrobras and the impeachment of former President Dilma Rousseff of the PT. As it stands, Moro and chief prosecutor Deltan Dallagnol pursued both personal and political ends through their questionable conduct related to the Lava Jato prosecutions and convictions. I do not understand why Prof. Stephenson would give Moro the benefit of the doubt at this point. Clearly, The Intercept revelations indicate that Moro did not act in good faith and was motivated by values quite distant from upholding constitutional due process.

If Stephenson chose not to extend the benefit of the doubt, then his reasoning regarding Moro and the #vazajato might be very different. Cautious skepticism makes it much easier to understand Moro’s transactional agreement to serve in the Bolsonaro government, and agreement to provide greater credibility to the new government in exchange for the next seat on the Supreme Court bench. Just the appearance of such a quid pro quo should be sobering to those still inclined to believe that Moro is not a politician and is a decent man.

2. Second, Prof. Stephenson argues that the implicit assertion that anti-corruption investigations like the Lava Jato are politically motivated, and that the country’s “legal and judicial institutions are themselves biased and corrupt, helps Bolsonaro more than the PT or other left-wing parties right now.”

The professor and many others logically assume that the leaks undermine the credibility of Brazil’s legal system and the federal judiciary. They may be correct, and no one can blame Brazilians for lowering their trust in these essential democratic institutions. Yet, there exists another possibility. Brazilians who share democratic values, whether they are conservative, liberal or social democrat, are increasingly aware of the intersection of politics and the judiciary, opening the way to greater civil society efforts to reform the Public Ministry and Judicial branch to put the squeeze on judges and prosecutors who illegally conspire to achieve a conviction or plea bargain. Yes, the immediate impact of the leaks on Moro’s credibility could make the struggle for accountability more difficult in the short term, but there are no alternatives for a state governed by the rule of law.

There is also a third argument than counters Stephenson’s worrisome outlook for the Brazilian left. If everyone is corrupt, then a majority of voters will elect those candidates and parties who redistribute income away from the wealthy and toward a majority of much poorer workers and their families (the rouba mas faz effect).

Stephenson may be correct, but the alternative outcomes are just as likely. We will not know until the municipal elections in 2020 and the general elections in 2022.

3. Third, Stephenson continues his line of thinking to suggest that The Intercept’s revelations frame anti-corruption efforts as the singular domain of conservatives in Brazil.

Stephenson does not offer any evidence for this assertion. It would be difficult because Stephenson admits that he does not read Portuguese. To advance his argument he would need to understand the written and voiced narratives that are whirling around Minister Moro in recent weeks. Stephenson prefers to offer his critique of the left with respect to its messaging on the Lava Jato and the recent leaks. This is the weakest link in Stephenson’s piece.

Like any Revelation, Investigation and Prosecution (RIP), the #vazajato challenges established narratives and opens up space for reinterpretation of the facts on the ground. At this point no one political force has clearly replaced the old narrative, but Brazilians are deepening their understanding of the Lava Jato, its direct consequences for economic development, the behavior of the Supreme Court with respect to both due process and corruption, and finally, Moro himself. The eye of this whirlwind is Lula, as Stephenson indicates, but the professor sweeps the Lula effect under the rug without properly placing his conviction by Moro in legal, historical or electoral perspectives. In the end Lula may not have the last word, but for now it is clear that Brazilians are searching for the real truth, and if they find that Lula was improperly prevented from registering his presidential candidacy in 2018 then there will be hell to pay.

Regardless, the search for the truth will likely lead to greater efforts to squeeze politics out of the judiciary. As Stephenson indicates, the struggle for accountability is historically the domain of the Brazilian left, not the conservative-nationalist politics that triggered the remarkable rise of the PSL in the 2018 elections. In power, Bolsonaro and his PSL have not yet demonstrated a principled commitment to fighting corruption. To the contrary, the corruption allegations against Senator Flavio Bolsonaro and Minister of Tourism Marco Alvaro Antonio (PSL) substantiate Stephenson’s concerns and may lead the opposition to innovate stronger anti-corruption legislation. There are plenty of opportunities for the Brazilian left to reassume its historical mandate to fight corruption and privilege.

4. Stephenson places the last brick of his argument at the feet of the Workers Party and its efforts to retain Lula as the center-piece of national politics. He argues that #vazajato contributes to the “Brazilian left’s unhealthy, counterproductive obsession with Lula.”

Stephenson offers this reason from a sympathetic angle and through a political analysis. He argues that

“Bolsonaro is one of the biggest beneficiaries of anything that gets the opposition to spend its time focusing on the past, and on Lula, rather than on the future.”

We can all sympathize with Stephenson’s implicit directive that the Brazilian left spend more time on envisioning Brazil’s future rather than dwell on its past. Yet, it is nearly impossible to think about the future without understanding Lula’s historic role and his consequential presidency (2003 to 2010). Moreover, we cannot clearly understand President Lula’s success without understanding how Brazil operates and the underlying conditions that permitted the first social pact that included all Brazilians without exception (Brasil para todos).

One important condition for social inclusion was the deal with the devil that we now call Lava Jato. It is inconceivable that Lula’s government could expand opportunities to all Brazilians without partially coordinating efforts to finance the very expensive electoral campaigns of the PT and its more clientelistic allies (many of which now support the Bolsonaro government). Yes, I just said it. Brazilian social democracy was dependent on crony capitalism under Lula and Dilma. No wonder the Brazilian left is thinking through Lula and his legacy since there is not a clear path for restoring social democracy in Brazil.

Stephenson and many others are correct to suggest that Bolsonaro was the biggest beneficiary of the Lava Jato.  Yet, It is highly unlikely that Bolsonaro and Moro can make sense of the experience and the fallout of the #vazajato to double down on fighting corruption. Moro now seeks protection from Bolsonaro and his PSL and it appears that he intends to shield the Bolsonaro family and its allies from corruption allegations. This is the decision of a man who knows that further leaks will lead a majority of Brazilians to conclude that his judicial misconduct is as corrupt as those rightly convicted of Lava Jato related crimes.

Bolsonaro and his PSL cannot save Moro from his hypocrisy. Besides, President Bolsonaro has other issues to grapple with, including his family’s penchant for petty corruption and his government’s preference for unforced errors and high-profile incompetence. Stephenson will have to wait for the 2020 municipal elections to test his hypothesis about the aftermath of the #vazajato. It is just too early to count the Brazilian left out. Rather, mayoral candidates from the PT and its allies may win the larger cities and make in-roads into the smaller towns of pivotal states like Minas Gerais, Rio de Janeiro and Sao Paulo. If the Bolsonaro government is not seen as effective in arresting economic decline and unemployment then the Brazilian left could also make gains in the presently conservative states of Parana, Rio Grande do Sul and Santa Catarina. Democracy surprises.

I share Prof. Stephenson’s observation that the Brazilian left needs to rehabilitate to effectively fight for accountability and equality on behalf of all Brazilians. Yet, I also understand and welcome the fact that Lula will inspire this effort and may play a role in guiding it. He is the central historical figure in Brazilian social democracy and his impact on politics, even from his jail cell, should never be underestimated.

I also share Stephenson’s concern that Bolsonaro may use the #vazajato moment to exercise his authoritarian reflex. However, we should all understand that Bolsonaro was likely to go rogue with or without the #vazajato and Moro. Moro knew this, but he was clearly focused on the transaction that would eventually land him a seat on the Supreme Court.

I have thought about Stephenson’s reasoning, and his arguments lead me to a critical question moving forward.

Will the combination of the Lava Jato, the Bolsonaro government, and The Intercept revelations galvanize public opinion and a political coalition that can advance the struggle for accountability and equality or is Stephenson right to worry about the future of Brazilian democracy?

June 2019 Brazil Risk is High by Mark Langevin

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The June 2019 Brazil Risk Score Is 4: Represents High Country Risk

·       Misery Index/Stable Performance

·       Formal Employment Index/Stable Performance

·       Economic Activity Index/Poor Performance

·       Homicide Rate/Stable Performance

·       Presidential Approval/Stable Performance

The June 2019 Brazil Risk Score of 4 represents a one-point increase from the May score due to low inflation’s contribution to the Misery Index, stable formal employment creation, stable homicide numbers, and stable presidential approval. The misery rate is stable behind very low inflation coupled to high but stable unemployment rates. After a modest adjustment of the March monthly homicide rate, the most recent measure reported, April 2019, is stable and continues below the high rates measured in 2018.  The Central Bank’s Economic Activity Index reports the most recent measure, again for April 2019, with a consecutive slight decline, further reflecting the possibility that the economy may have contracted in the first quarter of 2019.  Last, the June 27 CNI/Ibope presidential approval public opinion poll shows stable presidential approval even though it appears that the rejection rate is inching up over 30% and now registers 32%. Taken together, the excellent and regular ratings remain above 60% and register 64% in this recent poll. While some news outlets emphasize the gradual uptick in President Jair Bolsonaro’s rejection rate, the combined measure of excellent and regular provides a better benchmark for comparative historical purposes. While we expect the rejection rate to continue to show modest increases, the challenge for the president is to stay above 50% for the long run.

Overall, Brazil’s high-risk stems from high unemployment and contracting economic activity.

President Bolsonaro’s emphasis on fighting crime provides him with some reason to cheer the lower monthly homicide rates as compared with the 2018 average of 1.90 homicides per 100,000. Although it should be noted that the trend of falling homicides (although they remain very high in comparative perspective) began in the second half of 2018, well before the new government took office. Also, the president’s approval will likely vary in tandem with economic performance. At this point, it is likely that presidential approval will continue to fall in the second half of 2019 given the dismal performance of the economy and widespread unemployment.

The score of 4, HIGH, brings the BrazilWorks Brazil Risk score just below the average since the inauguration of President Jair Bolsonaro and his administration. The average for January to June 2019 is 4.6%.  

#vazajato and the Politics of Moral Panic in Brazil by Mark Langevin

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The Intercept’s recent revelations about the conduct of former Lava Jato corruption case judge and current Minister of Justice and Public Safety Sergio Moro and federal prosecutors strikes at the very heart of Brazil’s justice system. The #vazajato reinforces the politics of “moral panic” in Brazil but turns the table on those who have successfully employed “moral panic” to compete against the Workers Party (PT), undermine popular support for democratic governance, and elect President Jair Bolsonaro and his Partido Social Liberal (PSL) in 2018.

Richard Miskolci (2007) introduces the concept of moral panic to interpret the politics of gay marriage and social control from a comparative perspective.  For Miskolci, moral panic represents the “way the media, the public opinion and agents of social control react to certain disruptions of normative standards.” Richard Romancini (2018) employs Miskolci’s concept to explore the rise of conservative populism in Brazil during the past decade to create a compelling frame to understand the election of Jair Bolsonaro as well as more recent leaks that cast a shadow over the 2017 conviction of former president Lula on corruption charges. Romancini frames an analysis of the convergence of Brazil’s new conservative movement with evangelical Christian churches, both of which effectively harnessed media outlets to occupy the public sphere by creating moral panic with respect to civil society and government efforts to extend equality to the LGTBQ communities. He sums up the effort,

“Thus, the agents of moral panic do not claim to be opposed to homosexuals or homosexuality, but rather to ‘pedophilia;’ they do not claim to be against the discussion of sexuality and gender equality in schools or the organization and political mobilization of teachers and students, but rather indoctrination.”

Romancini provides a compelling argument that Jair Bolsonaro quickly seized the advantage of moral panic and the question of equality through the publication of his “Information on Gay Kit”  in late 2010. His publication launched a moral panic against the Ministry of Education of then president Dilma Rousseff to undermine governmental efforts to counter homosexual bullying in public schools throughout Brazil, degrade governmental legitimacy, and stir up conservative media populism. As Romancini notes, Bolsonaro’s Information on Gay Kit includes outright lies and misinformation. In 2018 Bolsonaro republished elements of his document and continued to fuel a moral panic as part of his electoral strategy. For Romancini, the politics of moral panic in Brazil has included:

  1. Promotion by conservative groups;

  2. Moral and/or religious element;

  3. Emergence of social changes or a “moral shock” such as the drive for LGBTQ equality;

  4. Use of media populism.

In some ways The Intercept’s damning revelations about the conduct of the Lava Jato taskforce and then judge Moro also fuel a moral panic. The #vazajato, as it is now come to be known, reveals a moral shock (the collusion between judge and prosecutor) and drives a moral panic that now threatens to turn the table on Minister Moro, the federal judiciary, and possibly the Bolsonaro government. The Intercept’s asymmetric strategy seeks to question the legitimacy of the Lava Jato prosecutions directly, and by consequence, the actions that led to the conviction, incarceration and eventual nullification of Lula’s 2018 presidential candidacy. While The Intercept qualifies as an “alternative” media out, it now works with more mainstream journalistic enterprises to publish leaked private conservations between prosecutors and Moro and interpret them in constitutional and ethical contexts. While different than the “gay kit” moral panic unleashed by Bolsonaro in 2010, #vazajato expresses moral outrage through intensive media dissemination across both alternative and mainstream outlets in Brazil.

#vazajato is different than the conservative-evangelical moral panic strategy to the degree that it is based on professional, whistleblower-based journalism that provides oversight of governance institutions and public official conduct. It is effective because the leaks are credible, increasingly perceived as truthful, and provide substance to a political narrative that questions the motives behind Moro’s conduct, especially as it impacted Lula and the 2018 elections. Bolsonaro’s moral panic strategies mostly lack(ed) factual substance and rely on misinformation and outright fabrications but have galvanized an electoral support base through media populism. It is doubtful whether the #vazajato rouses a new political movement or refreshes the Workers Party (PT). However, these credible revelations’ may neutralize the anti-Petismo fervor (opposition against the Workers Party) and degrade the legitimacy of the Bolsonaro government, especially if Minister Moro continues in his present role. Also, the #vazajato may eventually lead to successful efforts to overturn Lula’s conviction, but its accelerating reach goes well beyond the case of Lula. It calls into question the legitimacy of Brazilian courts, and more importantly, the use of extra-constitutional or outright illegal means to fight corruption. Therein lies the rub.

Supporters of the Lava Jato investigations and prosecutions are in a pickle. They are faced with a clear option; endorse any means necessary or embrace due process and the constitutional consequences of Moro’s bad judgement and questionable practices. At a minimum, the #vazajato has confirmed the appearance of misconduct on the part of prosecutors and the judge. This appearance should be enough to convince constitutionalists that something is rotten in the Republic of Curitiba.

Brazil Risk Remains High by Mark Langevin

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The May 2019 Brazil Risk Score Is 3: Represents High Country Risk

·       Misery Index/Stable Performance

·       Formal Employment Index/Stable Performance

·       Economic Activity Index/Poor Performance

·       Homicide Rate/Stable Performance

·       Presidential Approval/Poor Performance

The May 2019 Brazil Risk Score of 3 represents a one point decline from the April due to the slight dip in economic activity, the reported possibility of recession, and further dive in presidential approval. The misery rate is stable behind very low inflation coupled to high but stable unemployment rates. The monthly homicide rate increased but remains stable and below the high rates measured in 2018. The Central Bank’s Economic Activity Index reports the March measure with a slight decline and reports indicate that the economy may have contracted in the first quarter of 2019. Last, the presidential approval rating, as measured by XP Investimentos/Ipesp, has declined from 67 to 60 (combining both excellent and regular ratings) during the month of May. For now we score approval as poor with a continued negative outlook. Overall, the HIGH Brazil Risk score under the newly installed government of President Jair Bolsonaro reflects the continuation of high unemployment and a sagging economy. At this juncture, the slow economic recovery poses the most formidable challenge to the new government. However, it should be noted that the government’s recent efforts to obtain a “governing” agreement with Chamber of Deputies President Rodrigo Maia and Supreme Court President Dias Toffoli may accelerate congressional approval of President Jair Bolsonaro’s reform agenda in the coming weeks. The “pact for growth” could arrest the president’s falling popularity and raise the confidence of fickle investors.

The score of 3, HIGH, brings the BrazilWorks Brazil Risk score below the average since July 2018 and represents a downgrade from the April 2019 HIGH score of 4. The series mean average since July 2018 is 4.63.

Brazil Risk Score, July 2018 to May 2019

Brazil, Oil & Gas and the Open Acreage Permanent Auction by Mark Langevin

The Brazilian National Petroleum, Natural Gas, and Biofuels Agency (ANP) has adopted the open acreage permanent auction system to further diversify exploration and production activities, with an eye on small and mid sized operators. Over 600 onshore and offshore blocks are now tendered.

The permanent auction features 527 onshore blocks in the Espírito Santo, Potiguar, Recôncavo, Sergipe-Alagoas, Paraná, Parnaíba e Tucano basins and 73 offshore in the Campos, Ceará, Potiguar, Santos e Sergipe-Alagoas basins. See Gustavo Guardarde’s Permanent Auction map of blocks now available for bidding.

31 operators are now registered for bidding. They include:

BP Energy do Brasil Ltda.

Capricorn Brasil Petróleo e Gás Ltda.

Central Resources do Brasil Produção de Petróleo Ltda.

Construtora Kamilos Ltda.

DEA Deutsche Erdol AG

Dimensional Engenharia Ltda.

Eagle Exploração de Óleo e Gás Ltda.

Energizzi Energias do Brasil Ltda.

Eneva S.A.

Êxito Importadora e Exportadora S.A.

Geopark Brasil E&P de Petróleo e Gás Ltda.

Great Energy S.A.

Guindastes Brasil Locação de Equipamentos Ltda.

Guindastes Brasil Óleo e Gás Ltda.

Imetame Energia Ltda.

Karoon Petróleo e Gas Ltda.

Murphy Exploration & Production Company

NTF Óleo e Gás Ltda.

Oil Group Exploração e Produção S.A.

Partex Brasil Ltda.

Petroborn Óleo e Gás S.A.

Petroil Óleo e Gás Ltda.

Petrol Serviços de Sondagem Ltda. – EPP

Petrosynergy Ltda.

Petro-Victory Energia Ltda.

Phoenix Empreendimentos Ltda.

Repsol Exploração Brasil Ltda.

Tucano Serviços de Apoio a Óleo e Gás Eirelli

Ubuntu Engenhria e Serviços Ltda. – ME

Vipetro Petróleo S.A.

Wintershall do Brasil Exploração e Produção Ltda.

Source: epbr.com

Map of Available Blocks under the Permanent Auction