Brazil awash with corruption


On 24 January 2018 the court of appeal in Brazil confirmed a 10-year sentence handed down to former Brazil president Lula da Silva in July 2017. ‘Lula’, as he is popularly know in Brazil and around the world, is appealing the ruling to a higher court, and he is also running for president of Brazil in 2018. Lula served two terms as president between 2003 and 2011. Lula’s party, the Workers Party (PT), and his supporters in the unions argue that the charging and conviction of Lula by the courts is part of a coup that is being organised by the ruling class of Brazil to push back the gains that the PT had made for the working class when Lula was in power. Lula’s reforms and policies led to dramatic reduction in poverty in Brazil, and he remains very popular, especially among the poor in Brazil.

Brazil is the largest and most important country in South America or Latin America. Well known for its football, Brazil was also notorious for the poverty of its people, and for the concentration of wealth in a few hands. Around 1994 Brazil competed with South Africa for the most unequal society in the world. As a result of Lula’s policies, inequality has been reduced dramatically due to education policies and grants of different kinds. During this time Brazil has also seen an increase in corruption. Some say that this increase is because the PT government passed laws that made it easy to expose corruption. The scandals, however, also involve leading officials in the PT. Many politicians and business people have been jailed in a chain of corruption scandals that have gone right up to the office of the current President, Temer.

PT and the freedom struggle in Brazil

Besides poverty, inequality and the love of football Brazil has many other important similarities to South Africa. Brazil is a much larger country, with a population of over 208 million. You can fit about seven South Africas inside Brazil. It is the largest country in Latin America, and it achieved independence in 1822. In 1964 Brazil was taken over by the army and in the 1970s and 1980s the working class of Brazil was involved in major struggles for democracy and for improvement in their living standards. Lula was a unionist and major leader of the struggle, and he and the PT finally came to power in 2003, 18 year after the end of military rule.

PT gets caught up in corruption

The ruling class in Brazil has a long history of corruption. When the PT came into power in 2003 it was a minority government and needed the support of many other small parties to govern. It was in this context that the “Big Monthly Allowance” corruption scandal broke out. In court cases held from August 2012, it emerged that between 2003 and 2005 the PT paid these parties monthly bribes to ensure that they keep voting with the PT government. Members of these parties were paid about R130 000 per month. A senior member of the PT government, Lula’s Chief of Staff Jose Dirceu, was accused of running the scheme and was sentenced to ten years in jail along with many others.

Carwash

The “Big Monthly Allowance” turned out to be a small affair when compared to what came next. In 2014 police were surveilling some criminals who were suspected of money laundering at a petrol station. Their arrest and what they revealed led to the discovery of the biggest corruption scandal in history. The small-time criminals revealed that they were running rackets involving thousands of people organised by the country’s most powerful business people and politicians. This scandal, known as “carwash” because it distributed cash via petrol stations, involved Petrobas and Odebrecht. Petrobas is the largest State Owned Enterprise in Brazil. It produces, distributes and sells oil and gas internationally. Like Eskom here in South Africa, Petrobas is the most important SOE in Brazil, although it is much bigger than Eskom. Odebrecht is a Brazilian multinational with business in all continents and more than 60 countries, including South Africa. It specialises in construction, drilling and petrochemicals.

Odebrecht received large and overpriced contracts from Petrobas, and in return it gave kickbacks to all the political parties, politicians and businesspeople in Brazil. The carwash scandal also involved corruption in 11 countries in Latin America where Odebrecht gave bribes to presidents, politicians, political parties and business people. In Brazil, the scandal involved parliamentarians with at least 45 of them facing investigation. Odebrecht executives have also implicated many more politicians who have not yet been charged. It is this scandal that led to the arrest and conviction of Lula. It is alleged that Lula got an apartment built and furnished from these kickbacks.

The ruling class in Brazil was shaken by carwash, and even the current president Temer was caught on tape admitting his knowledge and participation in this corruption scandal. In this tape he admits that the reason they removed Delma Rouseff from the presidency in 2016 was because she did not want to close the carwash investigation. Delma Rouseff was the PT President who took office after Lula finished his term in 2011. In August 2016  the parliament of Brazil impeached  and removed her from office and she was replaced by Temer. The courts are now siding with the rich and are delaying the cases.

The deep culture of corruption within the Brazilian ruling class sucked in the PT when it came into power. Like the ANC, PT politicians who were activists organising in unions and in the mass movement, joined the corruption of the ruling class when they came to power.

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