Opinion, by Michael Royster

RIO DE JANEIRO, BRAZIL – Sunday’s paper brought the news from columnist Ancelmo Gois (who knows everybody and everything) that the honeymoon is over. The bride, of course, is President Dilma; the groom is persons unknown, but politicos all. Why? According to Mr. Gois, it’s the Palocci Factor.

The Curmudgeon, aka Michael Royster.
The Curmudgeon, also known as Michael Royster.

One reads in the papers that Chief of Staff and de facto Prime Minister Antonio Palocci, during the four years he was not in Government, increased his net worth by some R$20 million. No, that’s not a typo, it’s a 2 followed by 7 zeroes. How did this happen? Consulting services, says Palocci: “I (meaning my company) used to consult for lots of people.”

Why, you may ask, was ex-Minister Palocci not in Government? The answer is that five years ago he was accused of having used his gardener as a stalking horse, or “laranja” as they refer to them here, for some shady business deals. He denies all the charges, but pretty much everyone believed that Palocci was guilty. So, from 2007 to 2010, he was not a part of Lula’s cabinet. 2010 with Dilma was different, and he has returned to power.

Palocci is a hugely impressive guy—trained in medical school; the mayor of Ribeirão Preto, a large São Paulo municipality; a Congressman who was one of his party’s leaders, and a gifted power broker. This seemingly made him the perfect choice by Dilma to perform the role she had performed for President Lula, i.e. herding cats.

The felines in question are the politicians within Dilma’s own party and those of its chief allies, which are legion. Within each of these parties, there are sub-groups, each with its own political agenda. It often happens that these agendas conflict with each other.

One example is the Forestry Code, federal legislation designed to control everything connected with forests, including how much of them can be turned into former forests, called farms. The bill being debated in Congress would permit a substantial amount of clearing. One powerful subgroup of Dilma supporters, called “ruralistas” (roughly equivalent to the powerful U.S. “farm vote”), approves; another influential subgroup, the “greens”, disapproves. One of Mr. Palocci’s tasks was to herd the squabbling cats into a suitable cage.

Closer to home is the question of a bill passed by Congress which would literally decimate the royalty revenue earned by the State of Rio de Janeiro from off-shore oil exploration. President Lula, with Dilma’s support, knowing that financing the Olympic Games depends upon these royalties, vetoed the bill.

The problem is now that mayoralties around Brazil hunger for more moolah, and have been loudly lobbying congressmen to vote to override the veto. Dilma, with Mr. Palocci’s help, has so far managed to keep the cats from herding themselves into a majority, while a compromise bill wends its way through the legislative weeds.

Both the Forestry Code and the Rio Royalty issues require political trade-offs be granted to competing political polecats. Many believe Mr. Palocci won’t withstand the scrutiny into his personal finances, and if he’s not around to oversee the herding, it’s not clear whom Dilma will find to do the business he will leave unfinished. The honeymoon is now over.

Michael Royster, aka THE CURMUDGEON first saw Rio forty-plus years ago, moved here thirty-plus years ago, still loves it, notwithstanding being a charter member of the most persecuted minority in (North) America today, the WASPs (google it!)(get over it!)


  1. Inflation continues to climb, the Brazilian real falls, forcing deficits increase, while half of all Brazilian families are under increasing pressure to use credit they cannot afford. All this was predicted by Jose Serra during the election. Is it any surprise the honeymoon is over in less than six months? Good work.


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