Perspectives on Brazil’s Crisis / by Mark Langevin

Prepared by Mark S. Langevin, Director of BrazilWorks
March 19, 2016

Brazil’s political crisis deepened this past week following former President Lula’s forced deposition in São Paulo, including:

  • Massive opposition demonstrations on March 13th calling for the president’s ouster,
  • President Dilma naming Lula as Minister of the Presidential Office (Casa Civil),
  • Immediate efforts to stop the nomination through court injunctions; and
  • Massive demonstrations on March 18th supporting the president. 

Few doubt that Brazil faces a watershed moment and increasing numbers of political risk analysts are indicating the President Dilma’s impeachment by the Brazilian Congress or removal by the Supreme Electoral Tribunal (TSE) is likely. Yet, the road ahead seems uncertain, except for the increasing political polarization that began with the popular mobilization of June 2013 and accelerated in the aftermath of President Dilma’s narrow second round, reelection victory in the October 2014 presidential election.
Below are citations and summaries of recent publications that provide concise analyses to the political crisis and the recent twists to the Lava Jato corruption investigations.
Who is Who in Brazil’s Complicated Lava Jato Corruption Allegations?
Esther Fuentes
Council on Hemispheric Affairs
March 17, 2016
Fuentes provides a summary of the Lava Jato corruption investigation and characterizations of the outstanding accusations made against congressional leaders along with President Dilma and former President Lula. Most of whom where named by Senator Delcídio do Amaral (Workers Party-Mato Grosso do Sul) in his plea bargain testimony that was publically released by the Operation Lava Jato taskforce headed up by Federal Judge Sergio Moro.
And They All Came Tumbling Down: Brazil’s Spiraling Political Corruption Scandal
By Sean W Burges and Fabrício H. Chagas-Bastos
Australian Institute of International Affairs
March 18, 2016
Burges and Chagas-Bastos present a critical and concise analysis of the recent twists to the political crisis, the forced deposition of former President Lula, and his subsequent naming as minister by President Dilma Rousseff. They correctly note that the non-partisan, disinterested judicial process as become politicized and opposition to the president and her Workers Party has pulled out all the stops to remove her from office.  They write,
“While the Lula/Dilma story is getting the most attention, it is really just one sub-plot of the larger story. The political investigations, manipulation of legal processes and spin by the various aspirants to the presidency are breathtaking in their transparency and dispiriting in their abdication of republican spirit in favour of personal interest. The extent to which this sort of cynicism is embedded in Brazilian politics became clear this week when details were released of Senator Delcídio do Amaral’s plea bargain with federal prosecutors. In his 242-page confession he implicated nearly every significant figure in Brazilian politics. He was clear that Lula, Dilma and their coterie knew how Petrobras was being used to advance their political plans. Moreover, Delcídio claims the opposition was in on the act, with de facto leader Aecio Neves himself benefitting from illegally diverted funds.”
Burges and Chagas-Basto point to Brazil’s institutional corruption as the underlying dynamic that calls into question the credibility of both the Workers Party administration and their opposition, and remind readers that what makes this crisis different is the glaring absence of political leaders who can rise above this crisis to seek a resolution that achieves political stability without ripping apart the institutions of Brazilian democracy.
Do Brazil’s Street Protests Spell the End for Rousseff?
by Matthew Taylor
Council on Foreign Relations       
March 17, 2016
Taylor’s piece provides a frame for understanding the recent evolution of Brazil’s political crisis and the Lava Jato operation’s recent impact on the crisis by accelerating the push toward presidential impeachment. He poses legitimacy as a central concept for understanding the increasing political polarization surrounding both the impeachment process and the recent actions of the Lava Jato operation taskforce, including the questionable recording and public distribution of telephone conversations between President Dilma and former President Lula, including talks about naming Lula as Minister of the Presidential Office (Casa Civil).  While this week’s events inflame the crisis and propel the impeachment effort, they also call into question the legitimacy of the congressional opposition.
Taylor concludes,
“Politicians deciding whether to support impeachment are also thinking about the day after. Already, there are allegations pending against every single politician in the line of presidential succession: Vice President Michel Temer, Chamber President Eduardo Cunha, and Senate President Renan Calheiros. Delcídio Amaral’s testimony even raises a cloud over the fourth in line, STF President Ricardo Lewandowski, as well Rousseff’s rival in the 2014 race, opposition leader Senator Aécio Neves. If the selection of a new president were thrown to the Congress—which it would be unless Temer survived or Rousseff and Temer were removed before the end of 2016—there are very few politicians who are both unsullied by allegations and simultaneously capable of pulling together the governing coalition needed to approve any meaningful reform that might jumpstart the moribund economy.”
Taylor outlines the paths toward Dilma’s removal from office, but warns that even those in a position to govern after the president’s departure may lack the political legitimacy to end the crisis and steer the country toward an even keel.
Brazil scandals: Closing in
Joe Leahy
Financial Times
March 14, 2016
Leahy details a report that pivots from former President Lula’s forced deposition to explore the political economy underlying the escalating political crisis, fed by the Lava Jato scandal. He warns that,
“The escalation of the corruption investigation has opened a dangerous chapter in the political and economic crisis afflicting Latin America’s biggest country.”
Leahy correctly pins the rapid rise in opposition to President Dilma to the economic downturn, rising inflation, and the inability of the government to reverse course to reset the conditions for economic growth. He weaves an analysis of the mounting calls for President Dilma’s impeachment or removal with the deepening fiscal crisis and recession, punctuated by quotes from pundits predicting that the crisis represents a historic mobilization against corruption and in favor of greater fiscal responsibility and transparency.  However, Leahy does not carefully examine how the political crisis, especially the growing political distance and even hostility between the executive and legislative branches, complicates efforts to resolve the budget gap and carry out the reforms capable of setting the conditions for future recovery.
Scandals Have Made Brazilians Less Tolerant of Corruption on High Places
Paulo Sotero
Brazil Institute-Wilson Center
March 9, 2016
Sotero makes the argument that Brazilian attitudes toward governance and accountability have changed and now provide a solid political foundation for the ongoing Lava Jato corruption investigation and prosecution. He writes,
“Brazilians’ tolerance for corruption has been dramatically reduced. As of the end of February 2016, 84 notable politicians, business executives, and associates had been convicted in federal courts of embezzlement of public funds, conspiracy, and money laundering, and had served or were serving hard time. The crimes in most cases were related to bribes paid over a decade in contracts between state oil giant Petrobras and is suppliers.”
Sotero does not question the possibility of judicial over reach or even malfeasance, but focuses on the increasing political support for holding corrupt politicians accountable through criminal prosecutions and convictions under the Lava Jato operation. Since this piece was written, there has been increasing criticism of Federal Judge Moro’s investigatory methods, including wire tapping President Dilma’s telephone conversations.