Tag Archives: Dilma Rousseff

Political reform, Furnas and Political Party Financing in Brazil

AécioDuto

The norm up until now in Brazil is for companies to make political contributions, many of them in so-called second set of accounting books, illegal under the election law, either to parties or to political candidates directly. Thus, a tough rooted plant has been established that dominates Brazilian politics that has been fed and grown over decades. This tends to delay any movement that is made against such a system, because many people gain through it, to the detriment of the general well-being of the country. The politicians gain, who then place their chosen people in selected governmental or state company posts, and these people then work on their behalf, siphoning off funds and enabling favours.

The campaign to impeach the current President is in place to avoid any change to this established pattern. The Vice-President who is to take over should the move to impeach be successful has already alluded that the investigations into such political financing will be buried and suppressed.

Up until Dilma passed the recent law on political financing, every party was obliged to fund their campaigns by such irregular, under the table means. This was known and acknowledged, but accusations and investigations of such practises have been handled differently, depending on who the targets are. Opposition parties to the current government have been repeatedly accused and documented as having participated in such activities, but the Judiciary has not been seen to be even handed in who they investigate.

One such example of this syndrome is the Furnas List. This scheme for siphoning off funds from the state electricity company, Furnas, started in 1996 and was reinforced in 2003 when the then Governor of the state of Minas Gerais, Aécio Neves of the opposition PSDB party, asked the newly elected President Lula, for Dimas Toledo to be placed in Furnas in a position of trust and this was accepted, being the only such request he made.

Through false front consultancy companies, Dimas Toledo then siphoned off funds to candidates from various parties, but 68% of the total of about US$10 million went to the then governing PSDB. Despite this list being public since 2006, no-one on the list has been prosecuted for it, although a journalist and the person who published the list were imprisoned to try and suppress public knowledge of the scheme.

President Dilma turned off this tap of irregular funding to her leading opposition party and has since passed a law to limit private corporation funding of political parties and politicians, which is one of the reasons why the opposition is up in arms against her and her government, baying for impeachment.

Lessons from the Mensalão scandal

The Mensalão or Big Monthly Pay-off scandal rocked the first Lula government in 2005, just as the campaign for his re-election was starting. It began with the denunciation by one of the party leaders within the government coalition, but not of Lula’s Worker’s party, that many members of the Congress in that coalition were receiving large payouts to vote through legislation. In exchange for support of the government, this party was given the freedom to place their men in positions within the Post Office in posts of trust.

To go back to an earlier point in the story, Lula had swept to power in 2002, to change the face of Brazil from one of feudalism into the great nation that it was destined to be. That was his and his party’s vision, and was the mandate he received at the ballot box, but this was to cause great opposition, which is why these scandals are surfacing now.

However, the key players in this scandal, not the ones who were vilified by the media, had been put in their respective positions in the previous government, which was a conventional neo-liberal monetarist one, privatising many of the huge key industries for multi-billion sums and generating many new billionaires. The scandals of this previous government in fact only came to light after it had left office, and have largely been untouched by either the Judiciary or the traditional mass media.

In fact, the video that caused a huge outcry that soon followed the first denunciation, showing the supposed paying out of large sums of cash by an ex-official of the Brazilian Post Office to two businessmen stuffing it into their underpants, was false. It was in fact made by the lawyer of the ex-Post Office executive in order to pressure for payment.

These  and other media outcry tactics led to convictions of 25 of the 40 defendants, despite the lack of concrete evidence on the concocted charges. However, the mass media continue to push the message that these convictions were part of a pattern of corruption of that government, which both the media and elements of the Judiciary wished to see ended and replaced. As the Americans say, the elephant in the room is that there was no evidence. Only the bloggers and a handful of journalists actually tell the truth, with the rest prancing about like the emperor with no clothes.

There has been a consistent pattern during the Mensalão episode, the Lava Jato operation and the whole impeachment effort, of distortion of the truth, of a coordinated campaign by the mass media, elements of the Judiciary and a targeted social media campaign to implicate the PT and Lula at any cost. The desperation to find evidence has become obvious to many people now, of judicial abuse of power, of media bias against the truth, a media which is controlled by five or nine families, depending on the breadth of scope of inquiry.

This mass media has a vested interest in defeating democracy, because they control an oversize proportion of revenue and of opinion-forming capacity, and a less democratic government would enable exchange of favours as they have always been used here, as well as Globo, the largest of these media organisations being investigated for tax evasion through tax havens and offshore companies in the Panama leaks, to give but one example. This information is only available through the bloggers, who are hounded and persecuted judicially, and can be censored in this manner, because the truth is ugly, from the point of view of the mass media at least. These few families receive a large amount of advertising revenue from government and public companies which they are not anxious to lose or share out, much less lose that power of influence over opinion-forming, which is a powerful mixture, and the reality is that it has gone to their heads.

Just as in the impeachment farce, the mensalão convictions were obtained through lies uttered by Supreme Court Judges and the Chief Prosecutor, that there was in this case illicit use of public funds from the Chamber of Deputies and from the Banco do Brasil for use by the PT. These have been shown by various official reports and by documents from Banco do Brasil to have been all perfectly legal, and was a regular bank loan taken out to finance the Party`s election campaign, but the lie that was propagated was preferred, because it served the purpose of dirtying the image of the PT and of Lula.

One can conclude from examination of the evidence and the facts that, at best, the Judiciary, the Prosecutor and Judges were negligent with the truth, which would lead one to expect that for Justice to be done, this would be admitted and corrected. But that is not so. Not one of these people have come forward to express even a doubt about the conclusion, from which we have to conclude that these people choose to believe in the correctness of their conclusions, and are therefore fully responsible for having chosen sides already, not with the truth, but in accordance with a pattern that has repeated itself in the Lava Jato operation and the effort for impeachment of the President.

So consistent is the bias, that we are obliged to conclude that this is by choice. The characters involved have shown by their conduct and absence of backing of their words that they are not concerned with ascertaining the truth, but prefer to convict on the basis of concoctions of untruths. Such blindness or bias, gives Justice a bad name.

One of the key persons and witness in this circumstance fled to Italy to avoid persecution, but was successfully extradited back to Brazil in October 2015. This, of course, is very embarrassing to Brazilian Justice, when justice has neither been served or seen, when the only hope is that the country wakes up and rectifies such patterns of injustice.

The question remains, if that consistent pattern of injustice, repeated and criticised by legal experts in Brazil in the handling of the Lava Jato “scandal”, who is behind it and what is there to be gained or lost by such handling?

The Lessons of Operation Lava Jato

This operation to investigate a money laundering case was officially launched in March 2014, and within a week reached the preventive detention of a procurement director of Petrobras, the Brazilian state oil company. The operation is still ongoing and has resulted in many convictions and many more preventive detentions, with suspects being involved from large state and private companies, and many politicians from a wide variety of government and opposition parties.

The result has been a wave of popular outcry and highly emotional accusations being raised by the established media and corporation backed opposition groups against the government and the Worker’s Party, leading to widespread cynicism about politicians of all colours.

A few cooler heads have likened the situation to the Mani Pulite (Clean Hands) operation in Italy, where the Judiciary mounted a similar operation to this one in Brazil, successfully convicting many leading politicians, including former Prime Ministers. The effect was to change the face of Italian politics drastically, with the two leading parties that had alternatively shared power over the last 45 years being reduced to very minor players. However, in the aftermath, the leading judge, who had meanwhile enjoyed huge popularity, himself entered politics and was eventually accused of corruption, facing disgrace, with the allegation that the new Prime Minister, Silvio Berluscone, based in Milan which was the centre of the scandal, owner of one of the leading Milan football clubs and a dominant media holding, being said to have brought this about.

The aftermath of all this judiciary operation was only that corruption became more sophisticated, remaining endemic in Italian society. I conclude from this that corruption can not be cleaned up by any one single branch of the state, in this case the judiciary, but requires all three, the executive, the legislature and the judiciary to be fully involved in reform. Society learns from these examples, and the failure of Italian society in this case, means that no country has to repeat the same lesson, or rather that once any society sees this being repeated in their own situation, that they can then apply that lesson and make the appropriate adjustments. This is the great hope for the Brazilian situation, that the Brazilians, who are engaged on a massive and widespread scale, will realise this and organise to cancel out this negative element.

The positive side-effect of the military dictatorship in Brazil, was the organisation of civil society, based on the already widespread movement that included the Catholic Church pastoral movement, the literacy and the land reform movements, was that the resistance movement against the repression was successful, but of which the Worker’s Party was only the most high profile component. I consider this to have been the downfall of this party, who considered itself to be the sole component. The result was that this party neglected the other important elements in the recipe, which was the middle-class, one key element of its very own support base. This was evident in the campaign carried out by civil society for direct voting of the President in a mass organisation of public support. With the establishment media actively siding against this campaign, the country was successfully able make the Constitution a legal basis for direct elections of the executive power. All this took place before the internet was available, and this is important, because the Brazilian people learned the value of democracy through actively building it.

The value of the educated classes cannot be underestimated in carrying the torch of human enlightenment forward through the generations. The very success of the Brazilian poverty eradication programme implemented by the Lula government, was to considerably broaden the middle-class, with new layers of families being included in the university educated categories. However, the government did not realise that its economic policies were also strangling the growth it had sought and successfully implemented. In fact, the balance of the national accounts austerity cuts and high indirect taxes on the middle-class, through education fees and costs, health costs not covered by the problematic public health system, transport, in part, led to the shrivelling of the very basis of the Brazilian success

That is why the Brazilian case is so important to watch. The middle classes have turned against the previously popular government. In my assessment, this is partially quite justified, but the elements involved still have to be weighed and judged, because there are other factors in the mix that are not yet fully appreciated. I believe that the weight of the media bias in reporting issues, such as these corruption cases, and reporting or lack  of it, of successes and failures, is one of these.

There have been cases of tax avoidance, including by the Globo media empire, that amount to billions of dollars. Of course, Globo does not advertise this fact, but the blogosphere does. There is a loosely knit network of journalists and bloggers who publish, organise and discuss these questions. When the documents proving the Globo tax scheme came to light, they organised 30 bloggers to publish at the same time, so that no one person or site could be targeted successfully and eliminated from the picture. This is a tactic that was learned by resistance movement during the dictatorship, when trust was a matter of life and death. Humanity has recognised this necessity of sharing, and the whole internet phenomena and communication between humans, is dimly acknowledged by many in this recent innovation.

However, in the Brazilian case, this has resulted in the known persecution of  bloggers and the freedom of the internet, by both employment of the judiciary, allied with media campaign of disinformation against the bloggers. Other corruption scandals and reporting of wealth accumulation from the privatisation programme have been documented, with journalists being persecuted through the courts and the traditional media actively participating to denigrate these alternative sources of information.

The blogosphere has naturally accompanied this whole Lava Jato revelation and reporting process. They have been labelled the ‘dirty press’ by the conventional media and opposing political players. Tactics employed including smear attacks on family members, including small children, physical assault, and the full onslaught through the courts, where judges are able to impose injunctions on reporting of information and impose huge prohibitive fines for having spoken out (http://www.ocafezinho.com/2016/04/21/os-senhores-da-lei-fundamentos-e-funcoes-da-operacao-lava-jato/).

The Daniel Dantas story is a case in point. Already referred to in this series of articles, I shall expand on it to illustrate the difficulties faced. Daniel Dantas was a key figure in the privatisation programme, whereby all the nationalised industries were obliged by law to go through his private company, and he was initially placed on the board of the newly privatised companies with a hugely disproportionate share of the controlling votes. This resulted in the epic court battle for control of the board, between the Brazilian shareholders, that included the public banking sector pension funds and Telecom Italia.

As explained elsewhere in this series, Dantas was able to walk free through judicial intervention, although he ultimately lost his control of the board. However, the judiciary was able to persecute journalists who reported this process, counteracted by financial support garnered through the internet. This is important, because this freedom of information and backing that the internet provides is a new factor, that was not present in the Italian case, for example.

The neglect of the middle-class in Brazil is a key element, because these people are overwhelmingly the users and beneficiaries of the internet. They are literate in the broadest sense of the word, in terms of reading and digesting information, but also of passing this on and influencing the atmosphere within their society. Literacy has many levels, but in the Brazilian case, literacy in the strictest sense of the word, has improved hugely since the first Lula government, as a priority target of government policy, in marked contrast to previous governments. One requirement for receiving the state anti-poverty support, was that all children must be attending school. Such incentives had never existed before, and real disincentives weighed heavily against children going to school, because they could help the family earn some kind of a living, however frugal.

One of the Supreme  Court Judges that so hounded the Worker’s Party has since retired and is now under a deepening cloud of suspicion, most recently in the Panama Papers leak. Joaquim Barbosa, was a negro judge, who enjoyed the limelight of the Mensalão scandal. Only the future can confirm such a role.

However, the Lava Jato pay-off scheme has recently been shown to have been working since the 1980’s, thus spoiling the game, as the target of preference was to have been ex-President Lula and President Dilma Rousseff.

What is behind the Impeachment of Dilma

The move to impeach Dilma Rousseff, the President of Brazil, has its roots in the battle to privatize the Brazilian state oil company Petrobras and to divide up the spoils of the pre-salt mega-oil field among the major oil companies. There are other elements besides this one, but that is key factor. The motive is one of gain.

The campaign of impeachment took root less than a hundred days into her second term in office. In that election she won a majority of just over 51% of the vote, but her hands were tied by the outcome of the election, where the balance of power in Congress swung in favour of her coalition partner party, the PMDB. This party then won the vote within Congress for the Leader of the House, Eduardo Cunha, and the Leader of the Senate, Renan Calheiros.

This supposed ally in government then turned on Dilma Rousseff, alleging impropriety in her administration, kicking off the campaign for her impeachment.

These allegations against her managed to bite recently with the setting up of a Commission of Impeachment, with the Lower House voting for impeachment on April 17th.

The fight has become desperate because she has passed a law severely restricting election campaign finance by companies, and because of the investigations into the handing out of bribes by two state owned companies Furnas and Petrobras, which have long financed campaigns by her two great rival parties, the PSDB and the PMDB.

The operation to investigate the Petrobras scandal is called Lava Jato (Car Wash), a corruption scheme set up in 1997, during the Presidential term of Fernando Henrique Cardoso, and despite all the noise and frenzied activity, has been criticised by lawyers for its heavy-handed use of coercive questioning, preventive detention without conviction and rewarding of judicial agreements in exchange for lighter sentences to name names at the expense of impartiality. Judges and legal experts have said the operation led by Judge Moro is at times simply illegal and often biased to implicate the PT project, which for the last 12 years has made many advances against the neo-liberal project that has become the unquestioned norm in the big media and private financial interests.

Recently Judge Moro, released telephone intercepts of conversations of ex-President Lula and President Dilma in an attempt to forestall Lula’s appointment to a chief of cabinet post in Moro’s campaign to implicate these two in the corruption scandal. Conversations were released directly to the Globo quasi-monopoly media conglomerate, knowing this would have a friendly reception and wide diffusion, even of phone intercepts made after he had withdrawn the warrant. As a result, the Supreme Court Judge, Gilmar Mendes, suspended the appointment by Dilma of Lula to the cabinet office minister to organise the government’s support basis in Congress.

Allegations that Lula was appointed as a cabinet minister recently to avoid criminal investigation by lower courts fail to consider his skill as a negotiator as being the reason for his posting. He is a broad-minded negotiator, something he learned when he was a trade union leader during the military dictatorship at a time when such activism entailed the possibility of being jailed and tortured. His negotiating style is one of inclusion rather than confrontational, and enabled him to lead the country successfully during the two terms of his Presidency.

With the government coalition torn by divisions, the voting base in Congress has become completely fluid and unstable, and it is the job of the Minister for the Cabinet to negotiate these positions constantly on behalf of the government. That is why he was brought in, and the oppositions claims that it was to avoid investigation, throwing mud in every direction, knowing that some of it may stick.

The pro-impeachment campaign has been financed at the very least by three of Brazil’s richest businessmen and quite possibly by U.S. interests such as the Koch brothers, amongst others. When the first large demonstrations erupted, some of the banners carried by protestors were written in English rather than Portuguese, something never before seen in Brazil.

What has been seen and acknowledged before is the uncertainty of obtaining impartial justice. Many of the legal actions and hearings involved in these scandals can take years or be decided by judges who are openly biased, such as Gilmar Mendes, a Federal Supreme Court Judge who is known for his sitting on lawsuits which, amongst other reasons, are contrary to his stated political views, for favouring the unlimited financing of political parties and politicians by companies, in favour of privatization and against the Worker’s Party.

Gilmar Mendes was appointed by Lula’s predecessor, Fernando Henrique Cardoso, who privatized a whole range of state companies, and Gilmar Mendes has also made controversial decisions, such as releasing the banker, Daniel Dantas, charged with siphoning off public funds, financial crimes and attempted bribery. Dantas has been quoted as saying “I am only afraid of the courts of first instance, because up there I can resolve it”, meaning the upper courts. In Federal Police Operation Satyagraha, Daniel Dantas was imprisoned but later released on a ruling by Gilmar Mendes, and the whole legal process was later overturned on a technicality by the Supreme Court of Justice.

In the Mensalão or Big Monthly Pay-off trial, leading Worker’s Party governmental and associated figures were convicted on what was later seen to be unproven factual grounds, carried away by the emotionally charged climate that had been induced in the country by the media.

In this series of articles, the background and explanation of why this has become such a critical battlefield will be outlined. Dilma’s impeachment is the anti-democratic campaign’s last thrust to make the dirt stick from corruption operations, Lava Jato and the Mensalão, that were known to have been set up during the previous regime’s stay in power. Petrobras and the Pre-Salt mega-oil field have become strategic pieces in the energy and the privatization of one of the last state-held companies coveted  by the oil majors, and who have actively lobbied the anti-PT politicians. The Dilma government has enabled legislation to outlaw company financing of politicians and political parties and turned off the flow of money from the huge state-owned Furnas power company to the opposition parties. Also Brazil and the BRICS countries have been making their own arrangements to bypass the well-known Washington Consensus geopolitical institutions. That is why the Brazilian Worker’s Party PT programme is suffering this wave of opposition and why the Worker’s Party gets up the noses of the status quo.

One problem that has come up again and again that in Brazil, which is the so-called independence of the Judiciary. This is a fault of conception and has led to Judicial abuses, because they can consider themselves above the Constitution. This has been shown time after time, and is a lack of humility, and failure to perceive that there is interdependence between the powers, that the Executive and the Legislature are also part of government, that there should be balance. This was idealised in the Constitution of the U.S.A., but even there this has failed to be practised, with Constitutional guarantees having been eroded most obviously since 9/11, and quite possibly with roots before that, not unlike what has happened in Brazil.

This pseudo-independence of the Judiciary means that judges can behave arbitrarily, and some have shown that they do. I believe this is a lack of clarity of thought, and leaves scope for much abuse, choosing in accordance with their own prejudices or that of their sponsors, quite possibly paymasters.

One ex-agent of Federal Police, Armando Coelho Neto, who is an ex-President of the Federal Police Chiefs Association has clearly stated that there is a campaign within the Federal Police against the Worker’s Party, which is an arm of the Judiciary. A truthful and objective assessment of the evidence will show this to be so, as I shall outline in this series of articles.