After Lula-era excess,
the Car Wash generation upends Brazilian politics
Misha Glenny* (Financial
Times: March 18, 2016 )
AS Brazil has
succumbed in the past two years to a political, economic and constitutional
crisis, its people have grown worryingly polarised — further undermining what
was heralded as a great emerging economy success story.
Many are incensed by the revelations of mass corruption at
the state oil company Petrobras . Equally, they are appalled by the
president’s handling of the economy. Her
ratings have plunged almost as fast as the currency; support for her
impeachment has risen, along with unemployment and inflation.
Demonstrations against the president’s Workers’ party (PT)
are spreading and turning violent. But neither the president nor Mr Lula da Silva
— still the party’s mastermind and great symbol — nor her supporters are likely
to go down without a fight. The political rhetoric on both sides disguises
considerable vested interests. So, while the economy begs for stability, the
country appears set for even greater turmoil.
The possible impeachment of the president is moving to the
centre of the political stage. The greatest threat to Ms Rousseff lies in the
revelations of corruption at Petrobras. Although she has not been directly
implicated, much of her party’s senior leadership has — a fact that is driving
the street protests.
Added to that, the end of the commodity boom reveals that
part of the economic transformation of the 2000s was an illusion. Mr Lula da
Silva used the boom to build up his reputation, domestically and globally, as a
friend of both the markets and of the poor. But last year, Brazil’s economy
shrank 3.8 per cent. The era of largesse is over and structural weaknesses in
the economy are all too obvious: excessive dependence on commodities,
unproductive jobs in the state sector, overgenerous pension provisions, a
weakening tax base and low levels of investment.
As if it were not hard enough to shake off apocalyptic
visions, the mosquito-borne virus Zika has added a biblical touch to this
demonic mess. Were it not for Syria, migration, the UK’s EU referendum and
Donald Trump, Brazil would dominate global headlines. It may yet do so as the
city of Rio de Janeiro, with its distressed infrastructure, prepares to host
the Olympics in August. The International Olympic Committee has identified
significant problems with Rio’s readiness. The prospect of national
embarrassment looms.
Meanwhile, the primary challenge to Ms Rousseff and Mr Lula
da Silva is from the judiciary. Driving
the “Car Wash” investigation into Petrobras and the Mensalão scandal that
preceded it, are the supreme federal tribunal, the public prosecutor’s office
and the federal police. Historically these branches of the criminal justice
system were regarded as pliant facilitators of the venal habits of governments
and economic elites. But in the past
decade they have shown a greater willingness to take on corrupt politicians and
their business partners in a series of criminal investigations.
Operation Car Wash has been probing payments allegedly made
by big construction companies and other corporations to Petrobras in order to
secure lucrative contracts. The money was then channelled to parties, including
the PT, and individual politicians. PT
members claim the judiciary is acting as a cat’s paw for the super-rich elite
and its political allies, who want to take revenge on the party for its support
for the working class and poor.
That does not quite square with the facts. The head of the opposition, who denies
wrongdoing, is currently being investigated on suspicion of having taking
money. Marcelo Odebrecht, the boss of the country’s largest construction
company, was last week jailed for 19 years. Until now the fabulously rich captains of
industry believed themselves immune from judicial threat. For Brazilians,
Odebrecht’s imprisonment is even more startling than the investigation into Mr
Lula da Silva. If the elite is using Car
Wash to protect itself they are not doing a very good job.
In a country renowned for institutionalised corruption, the
rules have changed: anyone is vulnerable
to Brazil’s new breed of Untouchables — police, judges and prosecutors. Central among these is Sérgio Moro, who is in
charge of many of the Car Wash cases.
The 43-year-old Harvard-educated judge is representative of
a generation who in the 1990s drifted away from politics, which they saw as
mired in graft. Some sought an outlet
for their idealism in the law. The result can now be seen in these
investigations, where many of the officials involved are now in their thirties
and forties. The officials have proved less susceptible to bribery and
intimidation than those pursuing political careers at the top level.
Things are going to grow considerably worse in Brazil before
they get better. It is going to be a tumultuous few months in the run-up to the
Olympics. But ultimately Brazilians must embrace the changes that Mr Moro and
his colleagues are pursuing if the country is ever to break the back of the
cosy relationship between big money and rapacious political parties.
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