Brazil & Southern Cone - September 2007 (ISSN 1471-4431

Brazilians' hopes that the supreme court's decision to accept the "mensalão" case in late August would trigger a movement to punish corrupt politicians were dashed just a few weeks afterwards. In mid-September senators acquitted the president of Brazil's senate, Senator Renan Calheiros, in spite of a recommendation from the senate's ethical council to impeach him for having breached "parliamentary decorum" by accepting bribes from a construction company. Calheiros's acquittal made it absolutely clear that politics is still above justice in Brazil. 

Following a five-day hearing in late August, Brazil's supreme court judges agreed, unanimously, to take on a corruption case involving allies of President Lula da Silva. The case refers to the "mensalão" scandal, denounced by the public-prosecutor general, Antonio Fernando de Souza, over a year ago. De Souza accused a group of 40 former ministers, government-allied congressmen, managers of state-owned companies and businessmen of orchestrating a corruption scheme to siphon money from state-owned companies. The money was allegedly used to pay monthly allowances to allied congressmen - hence the name "mensalão" - so they could pay campaign debts. In this way Lula's leftwing Partido dos Trabalhadores managed to win support for government bills from ideologically unrelated, but nominally allied, parties. 

The supreme court accepted De Souza's charges against all 40 people, ranging from embezzlement, money laundering and tax evasion. Among the most prominent accused are one-time influential politicians such as José Genoí­no, the PT leader at the time the "mensalão" scandal broke out. Another is José Dirceu, who served as Lula's chief of staff until being dismissed in July 2005 over the scandal. Dirceu, who was considered Lula's political heir up to then, was subsequently impeached by his peers in the lower chamber of congress and lost his political right to stand for eight years. Most other serving politicians accused, however, were acquitted by their peers.

Still, the supreme court's decision to accept the "mensalão" was seen as a chance for Brazil's justice to redeem itself in the eyes of ordinary Brazilians: Brazilian courts are notoriously lenient in cases of white-collar corruption and in over 40 years the supreme court has not convicted a single politician implicated in corruption. Yet, increasing popular pressure forced supreme court judges to abandon their customary argument that they needed to accept the status quo to guarantee "governing stability", even if that meant not bringing corrupt politicians to account. Significantly, the popular outcry over the "mensalão" and the supreme court's decision to accept the case prompted a wave of euphoria among Brazilians and the country's press that "things have changed" and that white-collar corruption would finally be punished.

Calheiros dashes hopes for change
The euphoria did not last long. Just over a fortnight after the supreme court took the "historic decision" to accept the "mensalão" case, Brazil's senate dashed hopes for change when it acquitted its president, Senator Renan Calheiros, despite a report from the ethical council of congress recommending his impeachment for his involvement in corruption. The council found enough evidence to suggest that Calheiros accepted bribes from a construction company lobbyist and used false documents in his defence, which breaches "parliamentary decorum".

Calheiros was acquitted by 40 votes to 35, with six abstentions, in a secret ballot. For the press it meant that 46 Brazilian senators "collude with corruption". Significantly, the press picked on the disparity between the number of those who declared they voted in favour of Calheiros's impeachment and the actual number of votes counted with this intent. On the day before the vote the newspaper Folha de São Paulo counted, based on declarations made by senators, the necessary 41 votes that would lead to Calheiros's impeachment. Hours after the vote, the website G1 conducted a poll with senators, in which 46 declared to have voted in favour of Calheiros's impeachment. For the current affairs magazine Veja there is no other conclusion but one: "11 senators are liars". 

Crucially, the vote on the senate's floor was carried out in secrecy, thus allowing senators to vote differently from their declaration without fear of public reprisals. Meanwhile, supreme court judges had to publicly declare their decision over the "mensalão" case, allowing the public to exert pressure against them. Indeed, just after the decision was taken to accept the case a supreme court judge declared "we had a knife to our throats". The vote recommending Calheiros's impeachment in the ethical council was also carried out in the open and the result was that only Calheiros's most faithful allies dared to vote, not based on evidence but on political partiality, against the recommendation.

This led to another public outcry and the condemnation of Brazil's senate as a "secretive privileged club". The case may bring some positive outcomes, though: the lower chamber's justice and constitutional commission approved the creation of a special tribunal to rule just on white-collar corruption involving serving politicians, who enjoy parliamentary immunity from common prosecution. In effect, lawyers of corrupt politicians distort this privilege to drag out cases in the supreme court until their legality expires, leading to Brazil's notorious 'injustice system'. Another decision, this time taken by the senate's justice and constitutional commission, was to abolish all secret votes in congress, including on impeachment recommendations. The danger is these decisions will never be implemented, or at least they will not be implemented until the ethical council of congress rules over the other three corruption proceedings still pending against Calheiros. 

Significantly, Calheiros would not have been saved without Lula's discreet, albeit omnipotent, backing. Presently, Lula's main concern is the approval of a constitutional amendment extending a tax on financial transactions, the CPMF, and a new budget regulation which gives the government complete discretion on spending up to 20% of its total revenues (the current limit is 5%). In order to have the bill approved the government was forced to disburse R$21.7m (US$11.5m) to finance pet projects backed by lower chamber deputies who are nominally government supporters, but have no ideological links with the government's projects. Lula also had to appoint several associates of his political allies to management positions in state owned companies to guarantee support. 

This attitude is in line with Lula's notorious declaration, while campaigning for the presidency in the 1990s, that Brazil's congress is made up of "a bunch of crooks". For the Brazilian press he managed to prove that assertion by interfering in favour of Calheiros and with this "brought the senate to its knees". According to Veja, the deal was that Lula would support Calheiros by pressuring PT senators to abstain from the vote on his impeachment (see next page). In exchange the most unprincipled faction of Calheiros's party, the Partido do Movimento Democrático Brasileiro, would stay in line with the government over the CPMF. The PMDB is the largest party in Brazil's congress. 

Calheiros has already started to work for Lula days after his acquittal to have the CPMF approved. While the bill is likely to be approved in the lower chamber, not least because generous cash disbursements and positions guarantee the maintenance of a government-allied majority, it faces fiercer opposition in the senate. Calheiros and his allies, however, have already started to manoeuvre to lure support from unprincipled opposition senators. It was reported that two of those are ready to change party and move to the PMDB.

Bugs
Following last month's controversy over alleged bugging of supreme court judges [BSC-07-08], the federal police and the Brazilian Intelligence Agency (Abin) opened fire against each other. The new Abin chief, Paulo Lacerda, the former federal police director, wants Abin to be legally allowed to use recording devices in its investigations. Currently only the federal police are legally allowed to use bugs. According to Lacerda, Brazil is "now in the frontline of the war against drugs and terrorism" and the device is important to prevent "damage to society". His suggestion, however, was not welcomed, not least because Abin is directly linked to the presidency while the federal police are nominally independent. 

A new old scandal
The institutional relations minister, Walfrido Mares Guia, was cited in a federal police investigation as the leader of a corruption scheme involving members of the opposition. The scheme, mounted to finance a gubernatorial campaign in Minas Gerais in 1998, is considered as the beginning of the "mensalão". Guia belongs to the unprincipled Partido Trabalhista Brasileiro, which supports whoever is in government, left or right. The PTB's illegal campaign financing scheme was adopted by the PT at the federal government level after 2003.