Brazilian Blues

This week in North Philly Notes, Philip Evanson, co-author of Living in the Crossfireblogs about the arrest of the former President of Brazil, Luis Inácio Lula da Silva.

On Friday, March 4 following a 6 a.m. raid on his home by federal police, former President Luis Inácio Lula da Silva was detained and taken to São Paulo’s Congonhas airport for questioning. The action was based on an order of compulsory conveyance (Mandado de condução coercitiva) issued by Judge Sergio Moro who has been overseeing the Petrobrás corruption cases. The order was treated by most legal experts here as an abuse of power by Moro. This mandado is used in instances when a person of interest refuses to appear before police to answer questions. But Lula always said he was a ready to appear. The former head of the Brazilian bar association (OAB) said the early morning arrest was equivalent to kidnapping Lula. Moro is said to have acted this way out of fear for Lula’s safety, also because he feared there was a coordinated effort underway to destroy evidence that might incriminate Lula and undermine undergoing investigations. Therefore, while enemies of Lula and the PT or Workers Party celebrated the former president’s arrest as more evidence of his guilt, jurists have tended to condemn it as an abuse of power. If there were a danger to his person, Lula should have been asked if he felt the need for “coerced” protection. For example, did he think a mob was gathering with the intention to harm him, and therefore required that police arrest and place him in protective custody?

The brunt of the interrogation of Lula apparently involved two properties—a spacious oceanfront apartment in São Paulo state, and a rural retreat or sitio in the interior of São Paulo—and donations to the Lula Institute. The federal police suspect that Lula is the owner of the two properties which have been spruced up, upgraded by construction companies condemned for paying bribes, and for overcharging in contracts signed with Petrobrás, the Brazilian national petroleum company. In other words, contractors guilty of illicit gains, meaning the stealing of public money and the money of private Petrobrás investors. Lula, therefore, would be the beneficiary of stolen money. Also, there were questions of large contributions to the Lula Institute by firms, or by individuals profiting from corrupt Petrobrás contracts. The police investigators and Judge Moro are trying to determine if these contributions are quid pro quo arrangements—payments to Lula because he had something to do with making possible and effectively executing the corrupt contracts. In addition, relatively large sums were paid by the Lula Institute to a firm acting as the agent for high priced Lula Institute lectures in which one of Lula’s sons is a partner.
In the scale of the Petrobrás corruption scandal which may involve billions of dollars, the questions to Lula involve relatively small sums as was demonstrated by police as they honed in on a couple of inexpensive amusement style pedal rafts found at the sitio’s pond. Presumably they were for use by members of Lula’s family, such as grandchildren, and other visitors. Were these pedal rafts gifts from individuals or firms convicted in the Petrobrás scandal? If not, who bought and paid for them. Lula’s interrogators apparently pestered him with questions about the inexpensive rafts, also about the equivalent of $1,000 that his wife Marisa had in a checking account. Lula had been asked about these and other matters in a previous round of questioning. There were also questions about the transportation and storage of documents, furniture and gifts from Lula’s presidency. Was this provided free of charge by firms involved in corrupt govt. contracts, hence another instance of Lula and his family benefiting from stolen public money?

The day’s drama only built after Lula was released. He went to the Lula Institute to meet and address supporters. There he took the microphone, and delivered a remarkable half hour improviso describing what had happened, condemning the selective release of information taken in plea bargains, also media bias, and winding up in defense of the social programs of the PT and achievements of his administrations. He was clearly speaking at a critical moment for himself, the PT and his successor President Dilma Rousseff in circumstances of great personal stress and when his supporters expected much. And they got it in riveting, spontaneous, improvised speech, a demonstration of Lula’s continuing power as a persuasive, masterful speaker in which he still has no equal in Brazil. Lula said he felt invigorated and was prepared to travel the length and breadth of Brazil taking the case of the PT to the people, and that while he had doubts, he might yet run again for president.

So what will happen? The Chamber of Deputies has the power to impeach President Dilma Rousseff, but has no moral standing to do this until it first removes Eduardo Cunha as president of the Chamber. Cunha is now formally charged by the Supreme Court with extortion and money laundering in the Petrobrás scandal. But Cunha apparently has too much political intelligence for members of the Chamber who do not know how to remove him. As president of the Chamber he has the power to stay or start the impeachment process. According to one commentator, as long as he stays the process, pro-government deputies will support him. Since he also can start it, he has the support of anti-government deputies who stand by and wait. Second, if not impeached, the election of Dilma Rousseff and VP Michel Temer in 2014 can be overturned by the High Electoral Court (Tribunal Superior Electoral) on grounds that the sources of campaign contributions were corrupt. In this case, a new election would be called. I suppose the most interesting feature of this political crisis for the historically minded is charges of corruption on a large scale such as are present today when aired in earlier periods as during the presidential terms of João Goulart (1961-1964), Juscelino Kubitschek (1956-1961) and Getulio Vargas (1951-1954), could bring into being relatively quickly civil-military conspiracies leading to coup d’etats as happened in 1954, and l964. Today’s charges of corruption are treated as accusations to be investigated and that must be proved in courts of law. This is hailed as evidence that Brazil’s democratic political institutions are strong. Claims by defenders of the government that a coup or golpe de estado is in the making do not get traction.

Meanwhile, Dilma is not able to “govern” as she is more or less completely absorbed in trying to save her mandate. This is happening at a time of unprecedented recession now approaching 3 years, whereas the historical record that officially begins in 1901 shows Brazilian recessions defined as negative GDP growth never last more than 1 year, except for 1930-1931. The recession exacerbates the political crisis. Though now experiencing unemployment caused by the lengthy recession, the Brazilian economy remains large by world standards. However, its status has been that of a full employment, low wage economy in which a majority of Brazilians are poor as they had always been. It was true in the colonial era of slavery when Brazil undoubtedly had the largest western hemisphere economy as demonstrated by the number of slaves that Brazil was able to pay for and bring from Africa even when the price of slaves might be high. Small wonder that Brazilian slave owners, and the Brazilian elite largely thought they were right in staying with a slave based economy and civilization, the construction of which they had overseen. Such an attitude continued after independence 1822, and helps explain why Brazil was the last western hemisphere country to abolish slavery in 1888. I do think the traditional Brazilian way of running their economy is coming to an end, and something quite different will emerge, a sharp departure from past practices due to the fact that the long term high growth Brazilian economy observed from the l870’s to the 1970’s and that made up for all sorts of shortfalls in other areas such as social development ended in the 1980’s and shows no sign of returning. Except for the period 2003 to 2011 which was a period of strong economic growth due to high prices for international commodities in which Brazil was highly competitive, the Brazilian economy has stagnated since the 1980s, especially the industrial economy. This is in contrast to other South American national economies, except that of chaotic post-Chavez Venezuela. The situation in which Brazil does less well in economic growth and development than neighbor nations is disconcerting for Brazilians, hard to swallow or explain. Meanwhile, the stage is being set for the mass demonstrations on Sunday, March 13 which will see groups of demonstrators protesting against President Dilma Rousseff and her government filling the main streets of large cities. The other side will have their day of demonstrations on FridayMarch 18.

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