Lessons of the fall

Bello – The Economist, 05/21/2016

ON A bright and breezy morning in Brasília on May 12th, hours after the Senate had voted to start her impeachment for budgetary misdemeanours and thus suspend her as president, Dilma Rousseff walked down the front ramp of the Planalto palace to address a few hundred supporters of the Workers’ Party (PT). As she vowed defiance, behind her left shoulder stood Luiz Inácio Lula da Silva, her predecessor as president and the PT’s founding leader. He looked downcast and pensive, several times wiping his brow and his eyes with a handkerchief. No doubt he was contemplating the probable end of more than 13 years of PT rule.

Behind Ms Rousseff’s impeachment lies a double political failure. The PT once claimed a monopoly on ethical politics; in the public mind, it is now identified with leading a scheme to loot Petrobras, the state-controlled oil company, of more than $2.4 billion to fill its own campaign coffers and the back pockets of allies. And Ms Rousseff, whom Lula sold to the country as a top-notch manager, proved to be an incompetent steward of the economy.

So what went wrong for Latin America’s biggest left-wing party? The answer starts with the PT’s ideological ambiguity. Formed in 1980 by dissident trade unionists (such as Lula), radical priests, grassroots social movements and Marxist intellectuals, the PT claimed to be a new kind of party, of radical democracy and the dispossessed.

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A Final Defense of Dilma Rousseff

Brian Winter – Americas Quarterly, 05/11/2016

Back in March 2014, when the Petrobras scandal was just getting started, some of President Dilma Rousseff’s top aides saw a golden opportunity to kill the investigation – or at least badly wound it.

Márcio Anselmo, the Federal Police deputy in charge of the probe, had given an interview (which can be seen here) to Jornal Nacional, Brazil’s most-watched news program. On-camera and on-the-record, Anselmo and others laid out the main points of the case, which would soon become notorious: A former Petrobras board member who had accepted a Land Rover as a bribe, the money launderer whose plea-bargain testimony would prove key, and the sordid connections with some of the country’s biggest construction companies.

Everyone in Brasília knew the stakes were huge. The election was just six months away, and Rousseff was facing a tight race. But some ministers were convinced the TV interview was actually a blessing in disguise. They believed Anselmo had broken a dictatorship-era statute that, they argued, prohibited Federal Police officials from discussing cases in progress with the media. Fire him, they urged Rousseff. Fire him now and attack the investigators for using the media to selectively leak information damaging to the government.

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Petrobras boomtown turns desolate as refinery’s billions vanish

Sabrina Valle and Carlos Caminada – Yahoo Business, 05/04/2016

Located just 30 miles east of Rio de Janeiro’s bustling Copacabana beach, Itaborai looks like many oil boomtowns after the bust — except the deserted stores and empty glass towers that loom over this town of 220,000 speak of some bigger cataclysm than the collapse of crude prices.

“They said this would be the new oil city,” says Jefferson Costa, one of scores of migrants from Brazil’s impoverished north lured here by a multibillion-dollar petrochemical project that was supposed to create more than 100,000 jobs. Work on the complex, known as Comperj, has stopped, and unless new investors materialize, the single refinery now standing may never produce a single drop of fuel. “It’s empty inside,” says Costa, a plumber who lost his job six months ago when construction came to a halt. “People say it will become a large warehouse.”

Comperj has become a symbol of pervasive corruption at Brazil’s state-run oil producer, Petrobras. A sprawling investigation by federal police and prosecutors dubbed Operation Carwash has revealed massive graft, implicating construction conglomerates, banks, oil service providers, shipbuilders and politicians. About 2 percentage points of the 3.8 percent contraction in Brazil’s gross domestic product last year can be attributed to the effects of the scandal on the company and its suppliers, according to estimates from Tendencias, a consulting firm based in Sao Paulo.

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Dilma Rousseff, facing impeachment in Brazil, has alienated many allies

Andrew Jacobs – The New York Times, 05/01/2016

BRASÍLIA — They were idealists, united in the struggle against Brazil’s military dictators.

As democracy flourished, so did their careers. One of them, Paulo Ziulkoski, became the leader of an association of Brazilian cities. The other, Dilma Rousseff, rose even higher, becoming the president of Latin America’s largest country.

But their friendship soon fell apart. During a contentious meeting with the nation’s mayors in 2012, Ms. Rousseff rejected pleas for a share of Brazil’s soaring oil revenues. After the room erupted in jeers, Mr. Ziulkoski said, she stormed up to him, poked a finger in his face and humiliated him with a string of expletives.

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How Brazil, the darling of the developing world, came undone

Nick Miroff and Dom Phillips – Washington Post,  04/15/2016

It was called the “Brazil model,” or simply “the Lula model,” back when this country’s economy was roaring and its president, Luiz Inácio Lula da Silva, was a superstar of the developing world.

By balancing support for big business with big social-welfare programs, the union boss turned statesman presided over an era of growth that lifted tens of millions of Brazilians out of poverty. Lula’s presidency cut a new template for a Latin American left that had long insisted class struggle and revolution were the only road to fairness. The coronation came when Brazil was chosen to host the 2016 Summer Olympics, confirming its rise as a global power.

Now Brazil is limping to the Games. Its economy is facing its worst crisis since the 1930s. A Zika virus epidemic rages. And on Sunday, lawmakers will vote on whether to impeach President Dilma Rousseff, Lula’s hand-picked successor. Impeachment appears increasingly likely.

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Impeachment and Brazil’s ‘Que Se Vayan Todos’ moment

Brian Winter – Americas Quarterly, 04/06/2016

When Argentina’s economy collapsed in late 2001, everybody was absolutely sure whose fault it was. Aloof, hermetic and increasingly prone to slurring his words in public, President Fernando de la Rúa had managed to trash the government’s fiscal accounts in just two years in power. Steakhouses and nightclubs were empty, unemployment was nearing 20 percent and cash was so scarce that much of the economy reverted to the barter system – trading haircuts for groceries, family heirlooms for rent. As Christmas approached, looting broke out at supermarkets and anti-government protests turned violent. Finally, on the evening of December 20, De la Rúa hand-wrote a resignation letter, muttered something to his secretary about collecting the soaps from his private bathroom, climbed the stairs to the palace roof and flew away in a helicopter.

Perfect, Argentines said. Now we can get out of this mess. But the next president was so overwhelmed by the challenge that he quit too, setting off a chain reaction that would ultimately see five different presidents in only two weeks. Appalled, Argentine protesters adopted a new slogan – ¡Que se vayan todos! or “They all must go!” Banging pots and pans, millions took to the streets to demand that the entire political class – the president, Congress, everybody – step aside to allow for a top-to-bottom renewal.

Fast-forward 15 years, and Brazil is now having a similar moment. The economy is not as bad as Argentina’s was, and nobody has yet boarded any helicopters. But the Brazilian public appears to be arriving at the same conclusion – that nobody currently on the political stage is competent or clean enough to address the enormous crises facing the country.

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Brazil’s Supreme Court crimps crusading Judge Sergio Moro’s pursuit of ex-leader

Reed Johnson and Luciana Magalhaes – Wall Street Journal, 04/01/2016

SÃO PAULO—Many Brazilians regard Judge Sergio Moro as a folk hero for his aggressive investigation of a giant corruption scandal implicating dozens of politicians and businessmen. But this week, Brazil’s Supreme Court dealt Mr. Moro a symbolic if incremental setback, telling him to hold off in his pursuit of his highest-profile target, former President Luiz Inácio Lula da Silva.

The cat-and-mouse contest between Mr. Moro and Mr. da Silva has riveted Brazilians since March 4, when the judge issued a warrant allowing federal police to detain the former president for questioning about his alleged role in the multiyear bid-rigging-and-bribery scheme surrounding state oil company Petróleo Brasileiro SA, or Petrobras.

Tensions escalated days later when President Dilma Rousseff offered Mr. da Silva, her political mentor, a cabinet post as chief of staff. The appointment, which is still in limbo due to another judge’s ruling, would effectively shield Mr. da Silva from prosecution, under a legal provision that ministers and sitting legislators can be investigated and indicted only by the Supreme Court.

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