The Old Way

The idea of a parliamentary inquiry of corruption in the government
resulted from an unlikely, rather irrational alliance—a marriage
of extremes with nothing in common, except the wish
and need to harm the government's image at a critical time.

Adhemar Altieri

Brazil's age-old defining phrase and cliché description, "land of contrasts," is in no danger of becoming outmoded. On the contrary, Brazil at times seems determined to retain this trait it should be working hard to shed. The second half of March offered a vivid, wide-ranging example of how Brazil insists on perfecting the art of making available both the best and worst of everything. This example pits obsolete, at times obscene, always inefficient political practices on one side, and an orderly, focused, even admired economic management team on the other.

What further exposed these two extremes was a political battle that dominated the scene, over the installation of a broad ranging but vaguely defined parliamentary inquiry into government corruption. At a glance, not a bad idea: to deny that corruption exists in Brazil would really be a waste of valuable time, so why not investigate? So popular was the proposal that most of the public bought it. Surveys indicated the majority of respondents throughout the country believed government corruption to be a serious problem, and were in favor of the inquiry.

But how the proposal came to be is a telling aspect. The idea resulted from an unlikely, rather irrational alliance—a marriage of extremes with nothing in common, except the wish and need to harm the government's image at a critical time, when economic pressures are mounting from within and beyond. A broad, unfocused inquiry into government corruption, and its numerous opportunities to grandstand before live cameras, certainly have the potential to accomplish what the two allies have in mind.

The partner on the right in this endeavor, politically and otherwise, was until recently a key government ally. Antonio Carlos Magalhães from Bahia, the buffoonish former Senate president whose cohorts lost the battle for the presidencies of the Senate and the Lower House of Congress, fell badly out of favor with the government when he resorted to wholesale charges of corruption, and insinuations about President Fernando Henrique Cardoso's willingness to oppose corruption in government. Magalhães' accusations were meant to try and force the President's hand against the eventual winner of the Senate presidency, and main benefactor of the legislative battle, Senator Jader Barbalho. It backfired, and Magalhães is now out of the mix and looking for revenge.

The other half of this alliance is the left wing led by the PT, the Worker's Party. Anything it can generate that harms the government in any way is considered useful—this has been standard fare for years. Cooperation and constructive criticism are out of the question. The party has already decided to focus its 2002 presidential campaign on what it sees as misguided economic policies, a formula it has tried for three consecutive elections with its emblematic leader as the candidate, Luis Inácio Lula da Silva.

Three consecutive defeats, and it seems they're going to try and make it four—but they won't be blamed for not trying hard enough. Several mayors elected by the PT in October of 2000 have joined the effort, and frequently blame the urban problems they promised to solve in their campaigns on federal government policies. Yes, this precocious campaign is definitely under way (even though there's no sign of a government candidate)…

A most interesting element: many of the corruption charges that supposedly justify a parliamentary inquiry came from Magalhães himself, as part of an obnoxious mud-slinging duel with Jader Barbalho during the already mentioned legislative clash. Even before that, Magalhães—technically a member of the governing alliance—habitually attacked government members and actions according to his own political and personal convenience of the moment, an attitude that certainly accelerated his demise from the bosom of government. Most of his accusations are based on newspaper clippings and plenty of innuendo—what he and others in Brazil like to describe as "dossiers". Although he always promises hard evidence, none has ever been produced.

In a country with so much that can be substantiated and ought to be investigated, the only possible reason for calling an inquiry to rehash news clippings would be making political noise—in that respect, the government had a point in criticizing the proponents, and working to prevent the launch of the inquiry. But the government was equally disappointing when it once again resorted to tried, tested and true Brazilian political tactics. In a fragmented political scene like Brazil's, with 26 political parties looking for a piece of the action, one might even argue there's hardly another route available. But this is also the type of argument Brazilians have been hearing for far too long, and it does serve to perpetuate wrongdoing and corruption where it indeed exists.

The "formula" found by the government to keep legislators from signing on in support of the inquiry, was the release of funds for budget amendments made over the last four years, but not implemented. Members of Congress often introduce budget amendments to benefit their political base, so when these don't materialize, they face problems at election time. Amendments are also a way to direct funds to favorite causes, or to nonexistent causes: in this case, the funds often "disappear" along the way. Since 1997, so-called "late credits"—unreleased funds for amendments, total R$8.6 billion (about US$4 billion). One political columnist estimated that 400 members of the Lower House cashed in: they were assured that funds would be released for that old forgotten amendment, in exchange for not supporting the proposed inquiry…

The potential size of this mega-handout (there's no way of knowing at this point how much of the R$8.6 billion was actually distributed) would indicate the government had a lot more to fear from the inquiry than noise from the opposition. But the clincher, or what finally guaranteed the proposal wouldn't go anywhere, is even more suspicious. The PMDB party decided in a closed meeting that its members in the Senate would not support the inquiry. The party has 26 of 52 senators. One of them is the recently elected Senate president, and also party president, Jader Barbalho. Because many of the corruption charges to be investigated in the inquiry were aimed at Barbalho, he had no choice but to sign in favor of the inquiry. While he said he had no problem with being investigated, the rest of his party made sure the proposal went down in flames…

Consider that as Senate President, Barbalho is now the third man on the Brazilian political totem pole—he would become president if Cardoso or Vice-President Marco Maciel couldn't hold office for any reason. Since taking on the Senate presidency, there hasn't been a single day when Barbalho wasn't forced to comment on additional, indicting details that continue to pop up involving his name. Worst of all is the charge, documented by the Brazilian Central Bank, that while governor of Pará state in the 1980s, he diverted R$10 million (about US$5 million) in state funds to personal bank accounts—his own, his wife's, other relatives and political associates. This may help explain another charge: that he amassed more than R$30 million in properties (about US$15 million) during his political career, a figure that is totally incompatible with the salaries he earned as an elected official. Consider, finally, the unfortunate fact that Jader Barbalho and his PMDB are who the political end of Brazil's government is now in bed with.

We began this column making reference to a sharp contrast. Indeed it is striking. While all of this dominated Brazil's political front—and we've simplified a few events for brevity's sake, the economic side reaped the benefits of a reasonably level-headed long term game plan: positive indicators and projections collected praise from various quarters, in Brazil and abroad. These include 129 thousand new jobs created in the first two months of the year, and a February unemployment rate of 5.7 percent, down from 8.2 percent in February of last year. For the time being, those in the know are apparently concluding that Brazil can withstand whatever pressures the Argentine crisis or an economic slowdown in the U.S. might generate, and still manage at least 4.5 percent GDP growth for 2001, with inflation at 4.8 percent for the year.

For years now, it has been rather obvious that Brazil's fiscal and economic performances are held back not by a lack of competence among those who hold the purse strings, and certainly not by a lack of overall potential, but by obstacles the political side refuses to deal with and eliminate. Given the choice, self-interest always comes first, and it's bound to get worse as the 2002 mega-elections approach. Brazil's economic team certainly hasn't been flawless—insisting on an overvalued currency for too long, and just recently, raising interest rates and delivering an unnecessary negative signal, are both examples that they do make mistakes, including serious ones.

Still, one can only wonder what Brazil would be like today, if President Cardoso had made more of an effort to run the rest of his administration a bit more like the economic side.

Related sites:

PMDB—Party of the Brazilian Democratic Movement official website (Portuguese only)

http://www.pmdb.org.br

PT—Worker's Party official website (Portuguese only)

http://www.pt.org.br

Adhemar Altieri is a veteran with major news outlets in Brazil, Canada and the United States. He holds a Master's Degree in Journalism from Northwestern University in Evanston, Illinois, and spent ten years with CBS News reporting from Canada and Brazil. Altieri is a member of the Virtual Intelligence Community, formed by The Greenfield Consulting Group to identify future trends for Latin America. He is also the editor of InfoBrazil (http://www.infobrazil.com), an English-language weekly e-zine with analysis and opinions on Brazilian politics and economy. You can reach the author at editors@infobrazil.com  

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