Featured Q&A from the Latin America Advisor

Inter-American Dialogue, 04/22/2013

Director of the Brazil Institute, Paulo Sotero, was interviewed by the Latin America Advisor on the mensalao trial.

Q: Prosecutors in Brazil announced April 5 that they have opened an investigation of former President Luiz Inácio Lula da Silva in connection with the so-called “mensalão” vote-buying scheme. The scandal has already led to several convictions, including that of Lula’s former chief of staff, José Dirceu. Have the prosecutions dealt a significant blow to corruption in Brazil? How is the scandal, and now the probe involving Lula, affecting the country’s politics ahead of next year’s presidential election?

A: Paulo Sotero, director of the Brazil Institute at the Woodrow Wilson International Center for Scholars: “Politically, the mensalão episode is over. Brazil’s electoral politics will be governed this year and next by the effects of an underperforming economy on inflation and jobs. If the economy deteriorates in ways that reverses President Dilma Rousseff’s very high approval ratings, it could open political space for the opposition to revive corruption as an electoral issue, particularly if the current federal investigation of mensalão-related charges against President Lula lead to an indictment. In an unfavorable economic scenario, that improbable outcome could complicate Rousseff’s re-election campaign and Lula’s re-emergence as an alternative presidential candidate, which was an unlikely development even before the Supreme Court returned verdicts with prison sentences against 12 of the 25 people who were found guilty in the mensalão trial. That said, the historic mensalão trial resulted from pressure from a changing society fed up with Brazil’s tradition of high-level impunity. It represented progress in the fight against corruption, even if the sentences are ultimately reduced in the ongoing final stage of judicial review. The trial, broadcast live, was a teachable moment for Brazil’s expanding middle class and a younger generation of political leaders now emerging. Whether they learned from it remains an open question. Nothing, however, will change the fact that 37 people with special connections to power, including key advisors to the most popular president in Brazil’s history, were brought to justice and two-thirds of them were found guilty by a majority of judges nominated to the Supreme Court by that very president and by his handpicked successor, who felt compelled to declare that she does ‘not tolerate corruption.’ ”

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Brazil to investigate ex-president Lula in vote-buying scandal

Reuters, 04/06/2013

A Brazilian federal prosecutor has opened an investigation into allegations that former President Luiz Inacio Lula da Silva was involved in a vote-buying scheme in Congress that led to the conviction of close aides for corruption.

The federal prosecutor’s office said in a statement late on Friday it asked the federal police to probe accusations of a businessman at the centre of the corruption case, Marcos Valerio, who alleged that Lula not only knew about the illegal scheme but received money from it.

Lula has repeatedly denied the allegations that he knew of the vote-buying scandal known as the “mensalão,” under which operatives from the ruling Workers’ Party paid lawmakers in Congress to back the government’s legislative agenda. The scandal, which erupted in 2005, almost brought down Lula’s government at the time and led to the biggest political corruption trial in Brazilian history.

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Brazil opens inquiry into claims of wrongdoing by ex-president

Simon Romero – The New York Times, 04/06/2013

Brazil’s Public Ministry, a body of independent public prosecutors, has begun an investigation into a claim connecting former President Luiz Inácio Lula da Silva to a vast vote-buying scheme that involved the channeling of funds to the governing Workers’ Party.

The inquiry, which was announced in the capital, Brasília, on Friday and comes after several months of analyzing testimony, opens a new phase in what has arguably been Brazil’s largest corruption scandal, already involving the conviction of Mr. da Silva’s powerful former chief of staff, José Dirceu de Oliveira e Silva, on conspiracy and bribery charges last year.

The move by the Public Ministry, which asked the federal police to carry out the investigation, is thought to be the first time that Mr. da Silva has been directly investigated in connection to the scheme, called the mensalão, or big monthly allowance, for the regular payments that some lawmakers received. The scandal emerged in 2005, during Mr. da Silva’s first term as president. At 67, he remains a towering figure in Brazilian politics.

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Brazil: prosecutor to analyze testimony by suspect about former president

Simon Romero – The New York Times, 01/09/2013

The prosecutor general, Roberto Gurgel, said Wednesday that he would analyze testimony in which a businessman convicted in an embezzlement and vote-buying scheme tied Brazil’s former president, Luiz Inácio Lula da Silva, to the scandal.

The businessman, Marcos Valério de Souza, received a 40-year sentence in October after he was found to have operated much of the scheme, the mensalão, or “big monthly allowance,” named after payments received by legislators.

The Supreme Court’s trial of suspects in the scheme resulted in the conviction of senior figures, including Mr. da Silva’s former chief of staff, who was sentenced to nearly 11 years in prison. In testimony, Mr. de Souza said he deposited funds in 2003 for Mr. da Silva’s “personal spending,” in an account controlled by another aide to the former president. After Mr. de Souza’s assertion, Mr. da Silva said he could not “respond to a lie.” Mr. Gurgel said no decision had been made on a formal investigation.

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Dilma faces mounting difficulties

The Economist, 12/13/2012

The administration of President Dilma Rousseff and the ruling Partido dos Trabalhadores (PT) have been put on the defensive following a new corruption scandal as well as recent fall-out from the largest corruption trial in Brazilian history, known as the mensalão (“big monthly stipend”), in which several PT officials have been sentenced to prison by the Supreme Court. Moreover, Brazil’s economy is struggling to recover from a slowdown that began in 2011, despite the government’s stimulus measures. Even though unemployment is at historically low levels, these developments threaten to erode Ms Rousseff’s popularity and complicate the political scene in 2013.

Political rivals from allied parties and the opposition also have begun to stir. In addition, the president faces a mobilisation of political forces in Congress which are opposed to her recent veto of parts of a controversial oil royalties bill. All this points to a more fluid political environment than previously expected in 2013, when Ms Rousseff will be preparing the ground for a re-election bid at the October 2014 elections.

In the latest corruption case, a federal police investigation code-named Porto Seguro has led to arrests and the indictment of several government officials, including the head of the president’s office in the state of São Paulo, Rosemary Nóvoa de Noronha; the deputy attorney-general, José Weber Holanda; and brothers Paulo Vieira and Rubens Vieira , who were political appointees at Brazil’s water and aviation regulatory agencies, respectively.

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First black court chief confronts corruption in Brazil

Raymond Colit, Arnaldo Galvao - Bloomberg, 12/20/2012

Joaquim Barbosa once pored over law tomes while working nights as a typesetter to pay for college. Now he is rewriting them — and the history books as well — as the first black chief justice of Brazil’s Supreme Court and the presiding judge in a landmark corruption case.

Barbosa, 58, rocketed to celebrity for his role in a trial that convicted close aides of former President Luiz Inacio Lula da Silva, who appointed him to the top court in 2003. In a country where few politicians are ever tried for corruption and virtually none go to jail, Barbosa led the way in arguing that Lula’s aides stole public money, used it to bribe lawmakers and should be punished with lengthy prison terms.

The son of a brick-layer and a cleaning lady, Barbosa overcame racial prejudices to galvanize sentiment for cleaner politics. While non-whites make up more than half of Brazil’s population, they hold only 8 percent of seats in Congress and earn half as much as whites, according to the statistics agency.

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A healthier menu

The Economist, 12/22/2012

SO RARELY has political corruption led to punishment in Brazil that there is an expression for the way scandals peter out. They “end in pizza”, with roughly the same convivial implication as settling differences over a drink. But a particularly brazen scandal has just drawn to a surprisingly disagreeable close for some prominent wrongdoers. The supreme-court trial of the mensalão (big monthly stipend), a scheme for buying votes in Brazil’s Congress that came to light in 2005, ended on December 17th. Of the 38 defendants, 25 were found guilty of charges including corruption, money-laundering and misuse of public funds. Many received stiff sentences and large fines.

The supreme court must still write its report on the trial, and hear appeals—though it is unlikely to change its mind. So in 2013 Brazilians should be treated to an unprecedented sight: well-connected politicos behind bars. José Dirceu, who served as chief of staff to the former president, Luiz Inácio Lula da Silva, was sentenced to almost 11 years; Delúbio Soares, former treasurer of the ruling Workers’ Party (PT), got almost nine. Under the penal code, at least part of such long sentences must be served in jail. The justices also decided that the three federal deputies found guilty will automatically lose their seats if and when those verdicts are confirmed.

Lula was not charged, and has always insisted he knew nothing of the scheme. But Marcos Valério, a former advertising man sentenced to 40 years, claims to have evidence that Lula knew what was going on, and that some of the dirty money paid his personal expenses. These allegations may be merely a desperate attempt by a condemned man to bargain down his jail term. The attorney-general characterised Mr Valério as a “player”, and said his claims should be treated with caution. But if he has significant new evidence the mensalão may yet rumble on.

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Brazil’s attorney general says he’ll look into allegations against popular ex-president

AP/Fox News, 12/19/2012

Brazil’s attorney general said Wednesday he will look into allegations that  popular former President Luiz Inacio Lula da Silva knew about a massive  cash-for-votes scheme in Congress that led to the recent convictions of 25  people in a landmark trial.

Roberto Gurgel said he’ll examine statements by businessman Marcos Valerio  that Silva approved of the so-called “mensalao” monthly payout scheme and that  he used cash from it for personal expenses while in office. Silva denies the  allegations.

Valerio was sentenced to more than 40 years in prison and fined $1.3 million  for being what the Supreme Court called the “operator” of the scheme that gave  legislators cash handouts in return for their support of Silva’s policies after  he took office in 2003. Valerio made the allegations against Silva in testimony  to federal prosecutors last September, after he was already convicted but before  he was sentenced. His detractors say that indicates his testimony cannot be  taken seriously.

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Calls for an investigation into Brazil’s ex-leader

Bradley Brooks – AP, 12/13/2012

Pressure is growing for prosecutors to open an investigation into popular former President Luiz Inacio Lula da Silva amid new accusations he knew about a cash-for-votes in Congress scheme that has seen convictions of 25 people, including his one-time chief of staff.

Silva, who left office in 2010 with an 87 percent approval rating and was once called “the most popular politician on Earth” by President Barack Obama, has so far dodged accusations against him. He denies any wrongdoing in what is seen as the biggest corruption case in Brazil’s history.

But now newspaper editorials, opposition politicians and some average Brazilian voters are saying they want to see the Attorney General’s Office order an investigation into allegations made by a top figure in the corruption case that Silva approved of the scheme and used cash from it while in office.

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Corruption scandal nears Brazil’s popular ex-president as calls of probe into his role rise

AP/Fox News, 12/13/2012

Pressure is growing for prosecutors to open an investigation into popular former President Luiz Inacio Lula da Silva amid new accusations he knew about a cash-for-votes in Congress scheme that has seen convictions of 25 people, including his one-time chief of staff.

Silva, who left office in 2010 with an 87 percent approval rating and was once called “the most popular politician on Earth” by President Barack Obama, has so far dodged accusations against him. He denies any wrongdoing in what is seen as the biggest corruption case in Brazil’s history.

But now newspaper editorials, opposition politicians and some average Brazilian voters are saying they want to see the Attorney General’s Office order an investigation into allegations made by a top figure in the corruption case that Silva approved of the scheme and used cash from it while in office.

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