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LatinNews Daily - 21 October 2015

Brazil's Cunha gains time

Development: A debate over parliamentary rules looks set to delay the opening of the Brazilian congress' ethics committee inquiry into Eduardo Cunha, the speaker of the lower chamber of congress, and the man with the sole responsibility to initiate impeachment proceedings against President Dilma Rousseff.

Significance: Members of the left-wing Partido Socialismo e Liberdade (PSOL) and Rede Sustentabilidade, the party of former presidential candidate Marina Silva, had hoped to start the inquiry this week. But Cunha’s allies in the congressional committee have argued that three ordinary parliamentary sessions need to elapse from the time the complaint was first presented. With the latest revelations showing that Cunha’s name and passport was used to open bank accounts in Switzerland, despite him telling congress earlier that he had no foreign bank accounts, the speaker’s support on the 21-person committee is estimated at between five and nine. Even many of his erstwhile allies expect Cunha to be stripped of his mandate as deputy (there is no mechanism for removing him as speaker). The question is how long that process will take and what damage Cunha will wreak in the meantime

  • José Araújo, the president of the ethics committee, said, “if it was up to me the session would have already started. But the committee directorate thinks differently”. Araújo added that he hoped the case would be concluded by the end of the year, but admitted it could be subject to further delays. On 19 October, Cunha, from the nominally-government allied Partido do Movimento Democrático Brasileiro (PMDB), reiterated that he had no intention of quitting and that his enemies would have to wait until the next speaker’s elections to see him replaced.
  • Cunha has also been engaging in a trans-Atlantic war of words with President Rousseff, while tours Sweden and Finland. While Rousseff publicly lamented the latest corruption allegations against Cunha, whom the public ministry believes had US$24m in Swiss bank accounts, Cunha responded by regretting the fact the “Brazilian government was involved in the worst corruption scandal in the world”. Rousseff then shot back that the Brazilian government was not involved in corruption, only some individuals. Last night Cunha provoked her again: “I didn’t realise Petrobras [the state-controlled oil firm] wasn’t part of the government”.
  • How seriously to take this trade of insults is difficult to tell. Many in the opposition who favour impeachment are reluctant to criticise Cunha as they need him to begin impeachment proceedings against Rousseff. On the other hand, the government sees an opportunity to reach out to Cunha, with the possibility of going easy on the investigation against him in return for the dismissal of the impeachment claims. Also, the government needs congress to function effectively in order to pass more austerity measures and prevent a credit rating downgrade by a second international ratings agency, which would result in serious capital flight.

Looking Ahead: The PMDB’s party conference has been pushed back to November. Cunha has urged his party colleagues to vote to abandon the Partido dos Trabalhadores-led ruling coalition. It is clear that the PMDB is seriously split over the issue: a vote to leave the government, though unlikely, would have a serious impact on governability.

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