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.