Latin American Research Centre
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A corruption scandal, an economic crisis, protests on the streets, and the possibility of a presidential impeachment. These events describe the current political crisis in Brazil, but they could also easily be about 1992. At that time, Fernando Collor -- the first democratically elected president after over twenty years of military dictatorship -- was impeached. He was accused of taking part in a corrupt influence-peddling scheme for private gain. The scandal was triggered by his brother Pedro Collor’s declaration of how the arrangement worked. Once a popular president, Collor’s approval rating fell from 71% in 1989 to a low of 9% in 1992 when he was removed from power. This year, Dilma Rousseff became the most unpopular president since Collor, with polls indicating an approval rating of only 8%, and she currently faces the same impeachment proceeding as Collor in 1992. In the second year of her second mandate, Rousseff has been accused of meddling with government accounts to hide the true extent of Brazil’s economic problems. On April 17th, 367 out of the 513 deputies of the lower house in Brazil voted for her suspension; and on May 12th, the upper house approved the impeachment motion. Rousseff has since then been “temporarily” replaced by Vice-President Michel Temer. The impeachment should be finalized in the coming months once the full plenary of the upper house passes judgment. If 2/3 of the Senate approves, which will likely be the case, Rousseff will be ejected from office and Temer will be president.
Just as in 1992, the impeachment is linked to a corruption scandal. At the center of this scandal is Petrobrás, Brazil’s state-run oil company, and a scheme involving overpriced contracts with the largest construction companies in the country. In a mutually beneficial arrangement, companies won Petrobrás contracts at the same time as politicians had an arrangement with Petrobrás executives. The money involved in the scheme was thus used to fund political parties and bribe other politicians and executives. Until now, the Public Prosecutor’s Office (Ministério Público) estimates that the arrangement involved at least U$1.8 billion, which far surpasses any previous corruption scheme in Brazil. There is no evidence that Rousseff herself participated in this corruption scheme, but investigations have shown that her Workers’ Party (PT) – along with the rest of the main parties in the country – is very much involved. Currently, over fifty politicians have been named “persons of interest” in connection with this case. Within her party, these include former President Lula (who preceded her in power), José Dirceu (Lula’s former chief of staff), and Senator Lindbergh Farias. Those implicated from other parties include Collor, who is currently a senator, and the former Speaker of the lower house, Eduardo Cunha.
The possibility of Rousseff’s impeachment and the corruption scandal have both triggered protests across the country. These public demonstrations, which are far from homogeneous and have a wide variety of goals, have also been fueled by the worst economic recession in a generation. The economic crisis is all too familiar for Brazilians who experienced the shrinking economy of the late 1980s and early 1990s. Many at the time protested against Collor and called for his impeachment on the basis of his poor management of the economy and his alleged involvement in a corruption scheme. Ironically, some of those protesters included Farias, Dirceu and Lula, who are today themselves accused of corruption and influence-peddling. All these resemblances between the early 1990s and 2016 seem to confirm the popular Brazilian saying that “nothing ever changes in Brazil”. But is that really the case?
The similarities make it easy to overlook two fundamental changes to Brazilian democracy since the early 1990s. First, while in power, Dilma Rousseff could not govern as Collor did, just as Michel Temer cannot do so now. Collor was President when there were no real checks on presidential power. He governed the country as if he was above all other institutions. He bypassed Congress, often ruled by decree, and ignored all parties (even his own). That was not the case for Rousseff, who – just as every president since Collor – has had to build a large coalition among different parties, perpetuating the Brazilian “coalition presidentialism” governing style. This is a consequence of Brazil’s highly fragmented party system, which forces presidents to work through coalitions to be able to govern. This system was still nascent in the early 1990s, when the newly democratic country was adapting to a new constitution, promulgated in 1988, and to a new party system. The need for coalitions comes with a number of drawbacks, but it also means that presidents must compromise. Temer, who was Rousseff’s Vice-President, is actually from a party that historically had opposed the PT.
More importantly, a range of institutions now holds presidents accountable. This situation is vastly different from the early 1990s, when the only real checks on presidential power were regular free and fair elections. The grounds used for Rousseff’s impeachment is an example. The Court of Accounts (Tribunal de Contas da União), which already existed when Collor took office, audits government spending. Rousseff is far from the only president in Brazil to manipulate government finances. But, for the first time since Brazil transitioned to democracy, the Court of Accounts rejected the budgetary accounts, judging them in violation of constitutional and fiscal principles (including laws created in the 2000s). This kind of institutional oversight over presidents’ actions is much stronger today than in the early 1990s, and can no longer be bypassed. In March of this year, Rousseff appointed former President Lula as her chief of staff, giving Lula immunity against the investigation on the Petrobrás scheme. If he took office, he could only be prosecuted with the approval of the Supreme Court (Supremo Tribunal Federal). The Public Prosecutor’s Office, which has become the most autonomous and independent institution in the country, did not allow that appointment to take place; the Supreme Court then suspended Lula’s appointment.
In addition, new institutions have been created since Collor’s time. An example is the Office of the Comptroller General (Controladoria Geral da União), created in 2001 as an anticorruption institution and restructured in 2003. Over the years, this institution’s activities have become broader in keeping the executive branch accountable. Temer recently made the controversial decision to “transform” this institution into the Ministry of Transparency. The consequences of this move are still unclear, but the institution’s members have not submissively accepted this change and have taken part in numerous protests in Brazil’s capital, Brasília. Beyond that, most institutions now make their reports available on their websites for all citizens to have access. This includes the Public Prosecutor’s Office, the Office of the Comptroller General, and the Court of Accounts. They also make available the names of individuals being investigated or prosecuted because of wrongdoing. There is also the Transparency Portal, which makes the information on government spending available. This trend, which began through laws promulgated in the mid-2000s, has increased societal accountability as the public at large can now monitor government activities and accounts. NGOs and civil associations such as Contas Abertas and the ANTC have become a bridge between citizens and the government, making it easier to understand and interpret governmental actions and spending.
The second difference between the early 1990s and today is that beyond constraining presidential power, these institutions have made great advances in fighting corruption. For instance, although it only “exploded” in the media in 2014, the Court of Accounts since at least 2008 has been reporting that contracts of Petrobrás involved larger amounts than they should. In addition, over sixty institutions currently collaborate under the umbrella of the “National Strategy to Combat Corruption and Money Laundering”, sharing anti-corruption strategies, information, and mechanisms. Bilateral partnerships have also been formed, led by autonomous institutions rather than the Office of the President. The Federal Police’s partnership with the Public Prosecutor’s Office, for instance, is especially relevant because it allowed corruption to be prosecuted as a criminal offense. This has had great impact on how the investigation concerning the Petrobrás scheme has unfolded, for it was through this partnership that evidence was found.
Finally, when comparing the early 1990s with today, it is important to note that Collor’s involvement in a corruption scheme only became public because his brother decided to speak up; the scheme concerning Petrobrás, by contrast, was uncovered and is being investigated because institutions are working properly. The outcome of both scandals is also worth observing. In 1994, the Supreme Court found Collor not guilty of “passive corruption” because of lack of evidence, which occurred because of a poorly-run operation in which the federal police confiscated some computers before they had obtained a warrant to do so. By contrast, there have already been over 100 persons of interest imprisoned during the ongoing investigation on the Petrobrás scandal. This number includes high-level politicians and top executives of some of the richest companies in Brazil. In addition, 16 companies are being prosecuted and around U$840 million have been recovered.
Democracy in Brazil is far from perfect and the corruption scandal is the best example of how much things still need to change. Politically, some consider Rousseff’s impeachment to be a coup, since she is the only one to face the consequences of fudging government accounting when other presidents have done the same (read more about this here; for other reasons, read here and here). Constitutionally, presidents can be impeached based on such grounds, but most congressmen’s stated reasons for their pro-impeachment votes on April 17th did not refer to these grounds at all. Besides, most of them themselves face charges such as electoral fraud and bribery. Temer, in turn, is far from an ideal replacement to Roussef. Not only would merely 2% of Brazilians vote for him (according to Datafolha’s polls), but he has himself recently been accused of being linked to the Petrobrás scheme (see the news here, here and here) and of violating election laws. True, Brazil’s “coalition presidentialism” and the fraught relationship between the executive and the legislative branches suggest that its democracy can still be improved. At the same time, institutions are undoubtedly working much better than they used to. Both the uncovering of the Petrobrás scheme and the fact that presidents can no longer ignore or bypass institutional checks as they could in the early 1990s are clear examples that Brazil has come a long way.
Suggestions for further reading and videos:
- Read the first interview Pedro Collor gave to the media about his brother’s alleged corrupt acts.
- For Fernando Collor’s version of the facts behind his impeachment, watch this interview.
- Read the the newspaper Folha de São Paulo’s brief explanation of what the main names in Rousseff’s impeachment were doing during Collor’s impeachment.
- Watch the lower house’s deputies statements on why Rousseff should be impeached.
- Watch the statement of Fernando Collor, as a senator in the upper house, on Rousseff’s impeachment and how it compares to 1992.
- Watch the public statement Rousseff gave when the upper house approved the impeachment motion.
- Read Folha de São Paulo’s simple explanation of the Petrobrás scheme. See the list of politicians that have been considered persons of interest at some point.
- For details of the investigation on the Petrobrás scheme, see the Public Prosecutor’s Office’s WebPage on the case and the Federal Police’s Special Page on the Car Wash Investigation. For the operation’s results, see the chart on the Car Wash Investigation in Numbers.
- Watch the Financial Times’ short video about the Petrobrás scheme, how the investigation started, and corruption in Brazil.
- Read the New York Times’ short summary of how the impeachment process works in Brazil.
- Read The Economist’s summary of the most unusual reasons congressmen provided to justify why Rousseff should be impeached on April 17th.
- Watch Rousseff’s interview to The Intercept on why she believes her impeachment is a coup d’état (Subtitles in English available).
- Watch Michel Temer’s interview to CNN on why he believes Rousseff’s impeachment is not a coup.