[NYTr] Brazil: A Scandal a Day? (Hostile COHA Report on Lula)

[All the News That Doesn't Fit]

[A blistering take on Lula's Brazil, a land of "corrosive
corruption," "juicy scandals," Lula's "treasonous acts," "betrayal,"
"Faustian bargains," etc., etc. -NY Transfer]

Council on Hemispheric Affairs - Aug 10, 2007
http://www.coha.org/2007/08/10/brazil-a-scandal-a-day-while-lula-takes-in-the-sights/

Brazil: A Scandal A Day While Lula Takes in the Sights

• As Very Successful Diplomatic Sojourn to Caribbean Basin Nations
Concludes, the Nation’s Moral Core Unravels

• Lula Signs Faustian Pact with the Country’s Political Cabal, 
as His Misled Former Supporters take to the Streets

by COHA Research Associate Jenna Schaeffer 

President Luiz Inacio “Lula” da Silva returns home from his six-day
five-nation trip that began Sunday August 5 and took him to Mexico,
Honduras, Nicaragua, Jamaica and Panama. Stressing his favorite
subject, sources of energy-and in particular the sale of Brazilian
ethanol (along with the topic of bio-fuels and alternative forms of
power), Lula’s trip was a triumph for Brazilian diplomacy and his
compelling personality and persuasive charm. However, it will only
briefly mask the shameful state of Brazil’s public life as well as
Lula’s treasonous acts against his own professed system of values.

After Lula was elected in 2002 by a commanding victory, Brazilians soon
discovered the Faustian nature of the deal that they had unknowingly
signed with their new leader. In exchange for orthodox economics as
well as the rhetoric of leftist policies but not their realities, and
bear hugs for such leftist Alexandrian figures like Venezuela’s Hugo
Chávez, they would get the makings of a full dinner pail. What they
weren’t told was that every morning they would wake up to a new,
increasingly tawdry scandal, which would brush by Lula ever so lightly,
but never precisely enough to firmly embrace him. Brazilians soon came
to live with the fact that under Lula, they were living under one of
the most corrupt political systems in Latin America, even though they
couldn’t bring themselves to believe that their beloved leader had
double-crossed them, it almost seemed that this hardly mattered. This
was because Lula had put some well-liked anti-poverty and social
justice programs into place, jobs could be acquired, and they found his
anti-imperial, Forest Gump-like persona good enough to win their
plaudits.

But if Brazilians were prepared to have their hearts broken by facing
up to the ugly facts besieging them–Lula, and the appallingly venal
political system in which Lula had become such an ebullient player–then
they were bought out for peanuts. Instead of providing leadership, Lula
charmed his followers and made them love him with the same kind of
calculated, irresistible style of a rock star or a cinematic hero who
were more faithfully relying on a stock formula than a midnight
conversion. Instead of struggling to do it the hard, but just, way of
building permanent institutions that incorporated a democratic ethos,
Lula wasted his talents on constructing a Potemkin village that was as
false as it was deceiving.

A Betrayed Brazil Begins to Speak Out

His current trip has given Lula somewhat of a respite from the
dispiriting crisis dogging his administration since the July 17 crash
of TAM Linhas Aeras SA jetliner in Sao Paulo, along with a
demonstration in Brazil’s capital last Saturday in which participants
denounced Lula’s government as corrupt, heartless and cheating (which
went back months before the scandals began to mount). Police estimate
that approximately 3,000 demonstrators participated in the march as
they sang the country’s national anthem and carried posters demanding
Lula’s ouster.

Although the demonstrators were relatively few in number, the fact that
a protest movement was even mounted was an indication that Lula’s magic
is faltering. Despite the mounting crises at home, Lula’s trip has to
be considered a success, particularly the agreement of cooperation
signed last Monday with Mexican President Felipe Calderón. It included
measures for the production of bio-fuels, exactly the kind of economic
stride that manages to keep Lula’s approval rating high, even though
explosive revelations of corruption are slamming away at the basics of
his administration.

Brazil’s Scandals are as Notable as They are Plentiful

Since Brazilian President Luiz Inacio “Lula” da Silva took office in
2003, scandals galore, with names such as Hurricane, Anaconda and
Vampire, publicly have invoked the names of judges, police commanders,
members of Congress (including four da Silva cabinet members) and most
recently, the President’s own brother, all who have been scarred by the
corrosiveness of corruption. These woeful events have given the
appearance that Lula’s presidency has become a rout, having invoked the
expectation that some kind of scandal would occur every day, with the
reverberation of some reaching the highest levels of Brazil’s
institutional existence.

Although President Lula took office with a much heralded vow to
distance his administration from Brazil’s habitually dirty politics,
under his rule, corruption, in fact has been maintained as a shrine to
his personal deity: Saint Teflon. The best that his administration has
been able to do is to unleash the relatively clean federal police to
herd and corral the nation’s tainted national, state and local police
who usually only answer to the country’s corporative and co-opted
political system. The scheme of the malefactors has been to protect
tainted government officials, as well as guarantee judicial rulings
which could be counted on to be habitually accommodating of white
collar corruption. However, despite the surge of scandals that have
come ever closer to tarnishing President Lula himself, amazingly
enough, nothing yet has touched him personally and, not surprisingly,
(due to the public’s cynicism on such matters), he is still enjoying
high approval ratings as minimal inflation, a soaring stock market and
mainly cosmetic environmental adjustments have kept a lid on unrest.

Slot Machine Scams

A major scandal during President Lula’s first term occurred in 2004 and
involved his trusted assistant and former Chief of Staff Jose Dirceu,
who was caught on videotape negotiating campaign donations from a
crooked banker involved in extorting payoffs for candidates of Lula’s
Partido dos Trabalhadores (PT). Although the government at the time was
able to avoid a congressional investigation into the case, Lula’s
ruling PT Party’s image as an ethical and honest party was gravely
damaged. Moreover, despite the popularity of gambling in Brazil, Lula,
together with the majority of the country’s elite, remains opposed to
its formal legalization, even though this position ignores the huge
potential revenue which legalization could bring. Perhaps, this is
because bankers who engaged in illegal gambling practices predictably
have provided clandestine funding for electoral campaigns in the past;
offering financing that the campaigns would not have ever seen if
gambling were to become a legal activity. The federal police believe
that this illegal gambling ring was worth US$130,000 daily, according
to some sources.

>From Judges to Ministries: No Branch is Bypassed
Another scandal linking illegal gambling to a number of judges erupted
earlier this past April. Among those involved was Supreme Court judge
Pablo Medina, who was accused of receiving bribes to allow 900 slot
machines, that earlier had been seized by customs, to be recovered by
their importers, despite the fact that these types of machines had been
outlawed in Brazil in 1946. However, Medina was never arrested because
his judicial status grants him “special rights” which only provides for
common investigations of suspected embezzlers if these are sanctioned
by the Supreme Court. His case will most likely be dismissed and he is
sure to not see any time in prison. In fact, Medina is currently
negotiating his retirement which, most likely, will be on a full
pension.

Additionally, Mines and Energy Minister Silas Rondeau resigned in May
over accusations that he received kickbacks for government contracts.
His resignation marked the fourth time in recent years that a member of
Lula’s cabinet has been forced out of office over corruption
allegations. Rondeau allegedly accepted a $50,000 bribe from a
construction firm that was hired to provide electricity to rural areas
in Lula’s “Lights for Everyone” initiative. In a broader plan dubbed
“Operation Razor,” police arrested close to 50 people, including a
number of politicians, on suspicion of involvement with the siphoning
off of federal funds from infrastructural and social projects in six
Brazilian states (including in two of Brazil’s poorest regions).
Authorities say officials received cash and gifts to steer contracts
toward projects that were either overcharged or never built. Although
there was strong evidence of their involvement, Brazil’s courts failed
to order the arrest of the three men because of their elevated
political status. These bureaucratic scandals, like the others that
have beleaguered Brazilian politics for decades, rapidly come and go,
making it difficult to separate one from another, but one can usually
be certain that they will occur with absolute regularity.

Corruption in the Family

This June, another gambling incident has risen to the surface; this
time the culprit is President Lula’s brother, Genival Inacio da Silva,
otherwise known as: “Vava.” Given the previous gambling scandal
involving Dirceu, this new act of dereliction has to be supremely
embarrassing for Lula, who recently was forced to defend his brother’s
alleged involvement with an illegal gambling ring. Lula began to speak
out on the subject with public remarks that praised the federal police
for an “extraordinary job” in dismantling another illegal gambling
ring. However, outside of this setting, Lula adamantly privately
defended his brother, assuring all who will listen that Vava “… has no
involvement.” Representatives of the president’s brother deny any
wrongdoing, lamely insisting that Vava was seeking a “loan” from the
alleged gambling boss, not a bribe. Interestingly, the federal police
have a recorded telephone conversation between Vava and a suspected
gambling kingpin, in which the former is demanding cash. Telephone
intercepts, that are part of a federal police operation known as
“Checkmate,” have led to the arrest of dozens of lofty names involved
in this gambling scam. “Checkmate” is just the latest in a series of
theatrically-titled scandals that have come to dominate the headlines
of Brazilian dailies, which have gone a long way in clouding Lula’s
reputation, which previously was based on his “Teflonic” reputation for
effortlessly being able to shake off scandals.

Juicy Scandals

Many of the scandals in Brazil involve enticing details that news
sources lunge at, as they compete for the most lurid headline. One such
case involves a close ally of the president, Senate President Renan
Calheiros. In May, a major Brazilian newsweekly reported that Calheiros
accepted payoffs from a leading construction company – which now has
stretched the corruption scandal into the innards of Lula’s
administration. The newsweekly Veja reported that a construction
company paid rent on an apartment for Calheiros as well as a nearly
$6,000 regular stipend for his three-year-old daughter. Meanwhile, the
Senate has failed to adopt any indictment accusing him of being
involved in the crimes, with Calheiros vehemently denying the
accusations of bribery as well as refusing to take a leave of absence
in order to respond to the formal accusations. His defense team is
questioning the legality of any possible police investigation, citing
his parliamentary immunity.

Additionally, the “Party House” scandal involved corrupt lawyers
purportedly consorting with call girls. The powerful Finance Minister
Antonio Palocci resigned in April 2006 after it was confirmed that he
was among the merry-makers. Nor has the nation forgotten last year’s
“Big Monthly,” which consisted of monthly cash-for-votes bribes and
which involved a political aide who was detained at an airport with
$200,000 stuffed in his pants and luggage. Then there was the
“Bloodsuckers” affair where members of Congress were implicated in
kickbacks linked to the purchase of purposely overpriced ambulances.
With no shortage of details, such high profile acts of venality have
dominated Brazil’s front pages for the past few years, to the shame of
many Brazilians, but not all.

Immunity Laws

Unfortunately, in the face of these rampant scandals, lawlessness in
Brazil undermines the hard work of some elements of the federal police
because it benefits a category of corrupt government officials to the
detriment of the entire nation. The fact that congressmen, government
officials and judges possess parliamentary immunity is one of the main
reasons corruption remains so tempting, and operates at such a high
level, despite efforts by the Brazilian federal police, and the use of
new transparency tools to uncover corruption scandals. Since 2003, the
federal police have turned up numerous corruption schemes on the way to
arresting over 5,000 people, none of whom were high-level serving
politicians at the time. The main legal privilege granted to serving
politicians is that they can only be adjudicated by the Supreme Court.
Appeals can be made which clog up the court docket and in many
instances will prevent judges from reaching a final verdict. Brazil’s
self-protective judiciary also ensures that only a small percentage of
the over 1,000 civil servants and judges arrested in recent months by
the federal police were ever actually investigated after being picked
up. According to Latin News, “in over 40 years no case of impropriety
against politicians being judged by the Supreme Court has resulted in a
sentence.” Thus far, in most of the scandals, the serpent in the grass
has been government funds being siphoned off by means of overpriced
contracts with private contractors. These projects are usually granted
without a proper tendering process in exchange for illicit pay offs.
Although Brazilian authorities promise an overall reform of this policy
of “privileged” treatment every time a corruption scandal breaks out
anew, these putative reforms never end up materializing.

Brazilian Politics: A Quagmire of Corruption

The present epidemic of scandals in Brazil is partly due to
institutional shortcomings such as widespread patronage, lack of
accountability and oversight, and federal dominance of the less
sovereign components of the political process. Even if scandal-scarred
politicians lose office because of their complicity in illegal
practices—as many have—an inefficient judicial system ensures that most
of those thought to be culpable of such crimes are able to easily evade
prison.

Brazilian prosecutor Mario Lucio Avelar explained: “To stay in jail in
Brazil, you must rape, murder, confess—and have a bad lawyer.” However,
Lula has an alternative explanation. He argues that the onslaught of
official misdeeds reflects enhanced police detection, not more frequent
transgressions. Even amongst the muck and mire surrounding Lula, a new
poll last week indicated that 48 percent of people still believe the
government is doing a good or a very good job. Hopeless as this
appears, approval is still high in spite of a welter of corruption
allegations against Lula’s friends, associates and allies, with the
economy as well not exactly being a bastion of public rectitude.

According to an opinion poll published by the National Transparent
Confederation, Brazilians are pleased with the country’s strong
economic performance, improved wages and social welfare programs.
Additionally, there is a belief among men in the street that many of
the dirty deals affected by officials close to the administration would
not have been examined at all if it had not been for Lula’s expansion
of the two agencies that have uncovered most of the scandals.

Even after such a tortured explanation of Lula’s motives, corruption
still could end up undermining Lula’s second term ambitions. The
unavoidable discrediting of his political cronies threatens to enfeeble
the president’s already fragile governing alliance. Furthermore, public
works fraud alone could undercut his grandiose infrastructure–
including regional projects that involve the energy sector that impact
oil, gas, ethanol, biofuels and electricity projects. He also wants to
develop the transportation industry which includes automotive, railway,
maritime and aerial transport categories. However, the allocated funds
do not seem to be filtering into these development projects; rather,
with predictability, they is more often than not being “re-routed” in
the form of bribes and “loans,” as well as directly into the pockets of
politicians.

Although parts of the federal budgeting process have become more
transparent and the staffs of both the auditor general’s office and the
federal police have grown by 50 percent since Lula took office–both
happy signs–it is still almost impossible to gauge whether the
increasing number of investigations is reducing levels of corruption.
World Bank surveys like the Governance 2007 Report show that most
people perceive there is more corruption in the government now than was
the case 10 years ago. Furthermore, the attempts at reform have been
increasingly hampered due to Brazil’s intensely politicized executive
branch that directly distributes government posts to the party
faithful, as well as within publicly-owned companies.

This system of corruption is engrained in Brazil’s administrative
make-up and costs taxpayers billions of dollars annually in bid-rigging
and other crooked practices. It has been suggested that corruption
costs Brazil as much as US$21 billion yearly due to doctored contracts
granted through a “fixed” system including rigged bidding. One study
has estimated that about 10 percent of federal money destined for
municipalities has disappeared due to graft. According to the NGO
Transparência Brasil, “Corruption is calculated, and corruptors take
advantage of the state’s bureaucratic disarray to profit.”

Is there an Alternative?

Although there are poltical alternatives to Lula’s PT, such as Partido
do Movimento Democrático Brasileiro and Partido da Social Democracia
Brasileira, corruption in Brazil is not a practice associated with any
one particular party, but rather can be seen as endemic to the
political system as an integrated entity. The Brazilian Magistrates
Association maintains that “immunity means impunity” for politicians
and says that this is the reason anti-corruption controls in Brazil are
almost irrelevant. Without an effective regimen of punishment to hinder
corruption, a system of rigged bids and fixes will only continue
increasing in the near future, further debilitating clean and effective
government in the process.