Brazil's scandal-ridden year
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Dec 15, 2015  |  Vote 0    0

Brazil's scandal-ridden year

The country's problems -- presidential impeachment, kickbacks, bribes -- may prompt politicians to clean up the system


BRAZIL — until recently a rising star on the world stage — is having an annus horribilis. A massive kickback scandal at the government-controlled oil giant Petrobras has led to charges against Petrobras directors, politicians and executives of some of the country’s largest companies. President Dilma Rousseff is under impeachment proceedings. And on Tuesday, authorities searched the homes of Eduardo Cunha, the speaker of the chamber of deputies, who is accused of accepting $5 million in bribes and stashing it in Swiss bank accounts.

Humberto Saccomandi, an editor at Valor Economico, a financial daily published in Sao Paolo, explains why Latin America’s largest economy — and the world’s seventh largest — is unravelling.

Why is the president facing impeachment?

The formal accusation is that Dilma illegally manipulated budget figures. For a lot of people, this is a poor basis to impeach a president. But the bigger issue here is political corruption. The people are outraged about the corruption case at Petrobras, and Dilma was the person sitting in the chair (Rousseff was chairwoman of Petrobras during part of the graft ring’s period of operation).

Will the impeachment succeed?

Nobody knows. The proceedings began in Congress earlier this month. But the Supreme Court has suspended them until it can rule on how the process should proceed. Also remember that the man at the centre of the impeachment case is Eduardo Cunha, himself accused of corruption.

What kind of corruption case went on at Petrobras?

It was a kickback scheme where officials took bribes from companies they gave work to and used the money to finance political campaigns of the ruling Workers Party and of other parties in the government coalition. Petrobras officials have pegged the total of all bribes at nearly $3 billion. So really it is the whole political system being exposed as corrupt.

Is this a new problem for Brazil?

No. It is a long-standing one. Our political system is very fragmented. With 30 parties in parliament and Congress, nobody has a majority. So how do you get a majority? By buying it. No president has ever tried to change the way politics is done.

What is the impact for the country?

It is affecting the economy, which is expected to shrink by 3 per cent this year. We already are in a difficult environment because of the drop in commodities prices. This makes it even tougher. People are really angry.

Why should Canadians care?

We share the same values and not many countries in the world share these values. We have good relations in multilateral forums. This crisis undermines all of that. There will be a ripple effect in Latin America from Brazil’s troubles.

Is there any upside?

This scandal may finally prompt the politicians to clean up the system. Plus, it shows that the institutions are working better than they used to. The justice system and the federal police are independent and able to do their job.

Toronto Star

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