Editorial, by Stone Korshak
RIO DE JANEIRO, BRAZIL – Watching Brazil in the last year reminds me of the slow, tragic, predictable and inevitable collapse of some child star’s younger sibling that has flown too close to the sun while the media watches every self-destructive step.
Maybe that is a little harsh, but in the last ten years we have seen Brazil handed the golden goose (pre-salt oil discovery off the southeastern coast), and suddenly everyone wanted to be involved. Brazil, long-termed as ‘the country of tomorrow, that always will be’ – seemed to be finally having its day.
The socialist-leaning government, headed by PT (Partido dos Trabalhadores or Workers’ Party) seemed to be doing all the right things. It was protecting the oil access to avoid being exploited by the international oilmongers (Local Content laws). It was investing heavily in social equality measures (Bolsa Família and Minha Casa, Minha Vida), and promising to dedicate oil proceeds into education.
Perhaps most importantly, it passed the “Ficha Limpa” law (Clean Record), which dictated that citizens convicted of certain crimes be ineligible for public office. The crimes that prohibit one from holding public office include corruption, drug trafficking and fraud, within eight years of completing their sentences.
The law was just barely passed in 2010, and was applied for the first time in 2012, and again in 2014. In 2012 the law barred 312 candidates from taking public office, and in 2014 there were 497 candidates deemed ineligible to run by the Ministério Público Federal – MPF (Federal Prosecutor’s Office).
Ficha Limpa will hopefully turn the ship of institutional corruption around so at least Brazil sweeps it under the rug like most developed countries do. However the key word is “convicted” and in 2010 the Brazilian courts produced only 416 final judgments in corruption crimes and 547 cases of money laundering – about ten percent of the average that is in the U.S. court system each year.
BUT, back to the analogy, when Brazil starts to stumble in the public eye. It started with the Mensalão corruption trial finally opening in 2012. Seven years after the scandal surfaced, Brazil’s Supreme Court began to hear the huge cash-for-votes corruption case that took some of the shine off former President Lula’s legacy and the reputation of the ruling PT party.
The most prominent of the 38 high-profile defendants, who are accused of corruption, racketeering and money laundering, is José Dirceu, former chief of staff to Lula. He is convicted and goes to jail, although shortly after is transferred to “house arrest” and granted a “work release”. But the blood was in the water.
Around this time the price of oil fell, and the commodities market fueled by China began to cool. The hardball that Brazil played with the multinational oil companies drove those investments away and the economy seemed to grind to a halt, including the once blazing real estate market.
The PT won the closest election since Brazil’s re-democratization in 1985 and kept Dilma Rousseff as President in October 2014, and also managed to pull off the Word Cup without any disasters (off the pitch) in June-July. Yet there was more trouble brewing, the Lava Jato (Carwash).
Brazil’s federal police arrested 24 people accused of laundering over R$10 billion in six states across Brazil on March 17, 2014. Former Petrobras director, Paulo Roberto Costa, was arrested at the beginning of the operation and entered a plea-bargaining deal with prosecutors for a lighter sentence by naming some of those who benefited from the schemes while he was a director at Petrobras (2004-2012).
In July 2015 both ex-President Luiz Inácio Lula da Silva and current Speaker of the House of Representatives Eduardo Cunha were being investigated in two different inquiries, by August 2015 the same former Chief of Staff José Dirceu was arrested (AGAIN) for his involvement, and the cost of the corruption scandal ballooned to an estimated R$187.2 billion, or 3.4 percent of GDP.
It’s unbelievable. Then we fast-forward through more recent events, President Rousseff’s public approval ratings plummet to eleven percent. She gets caught on tape plotting to shield Lula from prosecution by hiring him as her Chief of Staff, which gets blocked.
The Brazilian real (R$) currency falls to less than half its highpoint to the U.S. dollar, and the economy slows to the lowest since 1990. A financial mismanagement/cooking-the-books accusation paves the way for Rousseff’s impeachment case. The Zika virus puts a cloud over the Olympics, and we are all holding our hands to our face wondering what will happen next.
Contrary to the modern definitions of tragedy and comedy, a writing professor once told me that in story-telling, the ancient Greeks defined a Tragedy as a story where the hero does not change and is doomed to repeat their mistakes, and Comedy is a story where the hero does learn, and does change.
We have yet to see where Brazil’s story will lead, but who can stop watching?