Prison report: Lula in, Leopoldo out

While all kinds of terrible things are happening in South America and around the globe, that continent recently supplied us with a couple of pieces of very good news.

Lula

In Brazil, almost a year after socialist President Dilma Rousseff’s removal from office, her mentor, former President Luiz Inácio Lula da Silva, has been sentenced to nine years and six months in prison. Both were brought down by their roles in the Petrobras scandal, a.k.a. Operation Car Wash, the largest scandal ever in the history of that nation. Lula, a Worker’s Party politician who served two terms in Brazil’s highest office and who anointed Rousseff to succeed him, was found guilty of corruption and money-laundering. Lula plans to appeal the verdict; meanwhile, four – count them, four – other corruption trials lie ahead of him.

Dilma Rousseff

The specifics of Lula’s corruption are tawdry and rather dull: he was found guilty of taking a massive bribe – in the form of a luxury beachfront apartment – from a construction company, OAS. In addition to presenting Lula with the apartment, OAS also gave Lula’s party about $27 million in bribes in return for a suspiciously lucrative contracts with Petrobras. At the trial, Lula denied having anything to do with the apartment in question.

Protégé and mentor in happier times

It’s hard to explain just how staggering the conviction of Lula is in his home country. He’s not just a former president but a national icon. His admirers believe that his socialist policies helped boost the Brazilian economy, lifting millions out of poverty. As a result, he’s widely revered as a folk hero, the ultimate man of the people, the very personification of socialist largesse – so that the idea of him raiding the treasury on behalf of OAS in exchange for an apartment seems a particularly cheesy sort of betrayal.

Lula is actually eligible to run again for president, and, prior to his conviction, was leading the polls in the run-up to next year’s elections. But if his appeal fails, he won’t be allowed to be a candidate. In any case, his conviction has surely diminished him in the eyes of at least some of his fans.

Leopoldo López

So that’s the good news from Brazil. Meanwhile, the Supreme Court of Venezuela, which is basically a tool of President Nicolás Maduro, took an action that surprised the world: it ordered that Leopoldo López be removed from prison, where he has languished for more than three years, and placed instead under house arrest.

Nicolás Maduro

López, of course, is someone whose fortunes we’ve been following pretty closely on this site: as we wrote in March of last year, he is “the chavista regime’s most eloquent critic [and] the opposition’s most charismatic leader” and was plainly locked up “for no other reason than that he is …by far the most potent threat to the power of…Maduro.”

Hugo Chávez

This is a man who, as mayor of one of the five municipalities that make up Caracas, was recognized for his erudition and eloquence and showered with international awards for excellence and transparency in public service – making him the very antithesis of the crude caudillo Hugo Chávez and his lunkhead successor, Maduro. As we have put it previously:

López is so manifestly everything that Maduro is not, so completely the Gallant to his Goofus, that it seems almost too tidy a scenario; if this were a film script, the producer would almost certainly order the writer to make the villain at least somewhat less buffoonish and corrupt and the hero somewhat less noble and courageous.

Liliana Tintori at the White House in February with President Trump, Vice President Pence, and Senator Marco Rubio

Our most recent mention of López here was in March, when we noted that his wife, Liliana Tintori, had met with President Trump at the White House not long after the latter’s inauguration. At the time, Trump issued a call for López’s immediate release. It was more than President Obama had ever done for López, and it may well have made a difference.

In any event, López is out of jail, and that’s good news. But, like the rest of the people in his country, he’s not yet entirely free. We’ll continue to keep an eye on the course of Venezuela’s fortunes, and Leopoldo’s.

Exit Rousseff

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Dilma Rousseff

Well, it’s over. On Wednesday, Brazilian president Dilma Rousseff was removed from office.

Back in January, we wrote about the increasing calls for Rousseff’s impeachment by ordinary Brazilians who had lost faith in her government’s disastrous socialist policies, who were disgusted by the massive scandal surrounding the government oil firm, Petrobras, and who – bottom line – were determined not to let her turn their country into another Venezuela.

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Olavo de Carvalho

Brazilians, commented Romanian-American political scientist Vladimir Tismaneanu, were turning out to be less susceptible to utopian promises than their neighbors in Venezuelan and Argentina. Philosopher Olavo de Carvalho observed that Brazilians weren’t just rejecting Rousseff – they were rejecting “the whole system of power that has been created by the Workers’ Party, which includes intellectuals and opinion-makers in the big media.”

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Dilma the terrorist: a mug shot

Today, on the other side of the Brexit vote and the GOP’s nomination of Donald Trump, it’s hard not to wonder whether the grassroots Brazilian effort to oust Rousseff is part of a spreading global thumbs-down for corrupt, supercilious socialist elites. If so, good show. 

As it happens, we spent that whole week in January on Rousseff, recounting her beginnings as a rich girl who joined a revolutionary terrorist group called COLINA; her entry into politics (a career in which, from the outset, she distinguished herself by her combination of administrative incompetence and genius for making and exploiting connections); and, finally, her increasingly disastrous tenure as president, capped by the Petrobras scandal, described by the Wall Street Journal as “the biggest corruption case ever in a country with a long history of scandals.”

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Kim Kataguiri addressing an anti-Rousseff rally

We also profiled one of the leaders of the anti-Rousseff movement, 20-year-old Kim Kataguiri, whose activism was spurred when one of his college teachers praised the socialist policies of the ruling Worker’s Party. Kataguiri responded by making a series of You Tube videos promoting free-market capitalism and founding the Free Brazil Movement, which has grown like kudzu.

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Rousseff with Lula

In March, we noted the arrest of a Rousseff sidekick, the imprisonment of two more of her cronies, and the resignation of her justice minister; in April, we reported on a government raid on the home of former president – and fallen saint – Luiz Inácio Lula da Silva. (We also noted Rousseff’s unsuccessful, and patently ludicrous, attempt to shield him from prosecution by naming him as her chief of staff.) Not long after, we reported that Marcelo Odebrecht, the CEO of Brazil’s biggest construction firm – and, naturally, a close associate of Rousseff’s – had sentenced to 19 years for bribing authorities in connection with Petrobras contracts.

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Glenn Greenwald and David Miranda

Later in April, we learned that notorious journalist Glenn Greenwald (of Edward Snowden scandal fame) and his husband, David Miranda, were on Team Rousseff, with Miranda signing his name to a Guardian op-ed accusing Rousseff’s opponents of seeking to engineer (what else?) a “right-wing coup.” In a July profile of callow, reliably far-left Salon columnist Ben Norton, we pointed out that he’d used the same exact words as Miranda, calling Rousseff the victim of a would-be “right-wing coup.”

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Evo Morales

And now – well – here we are. She’s out. Congratulations to the people of Brazil. Needless to say, this doesn’t mean an instant turnaround for their country –that’ll take serious, comprehensive reform – but it’s a necessary start. 

Oh, and then there’s this news. In reaction to the “right-wing coup” in Brasilia, three of Rousseff’s fellow socialist economy-destroyers – Rafael Correa of Ecuador, Nicolás Maduro of Venezuela, and Evo Morales of Bolivia – all recalled their ambassadors. Well, birds of a feather and all that. Let’s hope their days in power are numbered, too.

Weisbrot’s friends

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Mark Weisbrot

We’ve devoted this week to Mark Weisbrot, who for years has served as an economic advisor to and ardent defender of the most notorious, incompetent, and corrupt regimes in South America. Since he’s the founder and grand poobah of something called the Center for Economic and Policy Research (CEPR), it’s not unreasonable to ask a few questions. For example: who, exactly, is providing the funds to pay Weisbrot’s salary and keep his “center” afloat? And who are the other powerhouses who make up this “center,” which represents itself as a hotbed of serious economic analysis?

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Walden Bello

Well, as it turns out, most of CEPR’s staffers and directors have more of a background in organized left-wing activism on issues like global warming and women’s rights than in economics. No fewer than three members of CEPR’s small staff (John Schmitt, Deborah James, and Alexander Main) used to work for the “Information Office” of the Venezuelan government – which isn’t exactly famous for its world-class economic acumen. As for CEPR’s “board of directors,” it includes Filipino congressman Walden Bello, a critic of capitalism and globalization who’s written such books as Capitalism’s Last Stand?: Deglobalization in the Age of Austerity (2013). In a piece on free trade, Bello put the word “free” in scare quotes. In November 2010, Bello called Néstor Kirchner “remarkable,” “an exemplary figure in the Global South when it came to dealing with international financial institutions.” Pronounced Bello: “Along with Hugo Chavez of Venezuela, Lula of Brazil, Evo Morales of Bolivia, and Rafael Correa of Ecuador, Kirchner was one of several remarkable leaders that the crisis of neoliberalism produced in Latin America.”

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Danny Glover

Also on the CEPR’s board is Julian Bond, an activist and former NAACP head who’s compared the Tea Party to the Taliban. Neither Bello nor Bond is a trained economist. The most familiar name on the list is Danny Glover – yes, that Danny Glover, of Lethal Weapon fame, whose love for Hugo Chávez, for Fidel Castro, and for Communism generally we’ve already discussed on this site. Needless to say, Glover isn’t an economist either.

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Dan Beeton

Then there’s CEPR’s International Communications Director, Dan Beeton. In August 2014, he wrote a paean to Cristina Kirchner’s newly appointed Minister of the Economy that read less like the work of a sober economist than of an overly gushing publicist. Excerpt: “Alex Kicillof, the telegenic economy minister famous for his Elvis-style sideburns, has emerged on the international stage as a heroic figure championing the Argentine people. Kicillof is perhaps reminiscent of another bold, young economy minister in a different South American country: Ecuador’s Rafael Correa, whose public sparring with the World Bank in 2005 helped to launch his political career.”

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Robert Naiman

Finally, check out CEPR staffer Robert Naiman, who, after Néstor Kirchner’s death, eulogized him at the Daily Kos website for “defying Washington and the International Monetary Fund.” Naiman also recommended Oliver Stone’s documentary South of the Border, which represented Kirchner as a hero – and which, as we’ve seen, was written by Weisbrot. Who’s Naiman? In addition to his work at CEPR and his writing for sites like Daily Kos and the Huffington Post, he’s served as Policy Director for a website called “Just Foreign Policy,” and as head of the board of the “progressive” news website Truthout, as a member of the steering committee of Gaza’s Ark (which is all about repeatedly violating Israel’s sea blockade of the Palestinian territories).

Back to Weisbrot tomorrow for a wind-up.

Defending Dilma: Greenwald and Miranda

In recent weeks we’ve watched the massive Petrobras scandal in Brazil spread wider and wider, taking down politicians and business figures, big and small, until it finally reached the most powerful person in the land: the country’s corrupt president, Dilma Rousseff. She is now facing impeachment.

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Brazilian Congressman Jean Wyllys

On April 20, Shannon Sims of Forbes reported on the novel responses by Rousseff’s stooges to the legislature’s vote to impeach her. Some of them are describing it as a “right-wing coup” – a ridiculous way to characterize a constitutionally legitimate action that is amply justified by Rousseff’s conduct in office. There are other, equally absurd takes on the impeachment: Congressman Jean Wyllys has called it “sexist,” an effort by anti-woman reactionaries to unseat Brazil’s first female head of state.

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Dilma Rousseff

Rousseff herself is one of those who have called the impeachment a coup. She’s responded in a characteristically authoritative way, threatening to have Brazil removed from Mercosur, the South American common market, if she’s removed from office. She’s accused her potential successor, Vice-President Michel Temer, of being a leader of the “coup” – a charge that he denied angrily, rejecting the notion that Brazil is “some minor republic where coups are carried out.”

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David Miranda

Meanwhile one David Miranda contributed an article to the Guardian in which he purported to explain the “real reason Dilma Rousseff’s enemies want her impeached.” Never mind her corruption in office. Rousseff, insisted Miranda, was being targeted by “rich and powerful” conservatives and the major corporations they own, for no other reason than that they oppose her left-wing politics.

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Glenn Greenwald

Who is David Miranda? You may have run across his name while reading about the scandal surrounding Edward Snowden, the former contractor for the U.S. National Security Agency who stole sensitive secret papers and passed them on to journalist Glenn Greenwald, who in turn published them in the Guardian. At the height of the controversy, in August 2013, U.K. police detained Greenwald’s husband at Heathrow Airport on his way from Berlin to Rio de Janeiro and seized thumb drives containing tens of thousands of classified British Government documents. They’d been given by Snowden, who’d received asylum in Russia, to Laura Poitras, a partner in Snowden’s scheme, who’d then passed them on to Greenwald’s husband so that he could deliver them to Greenwald, with whom he lives in Rio.

The name of Greenwald’s husband? David Miranda.

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Miranda at the airport in Rio de Janeiro, after his detention at Heathrow

This past January, Britain’s Court of Appeal ruled Miranda’s detention at Heathrow legal. The editors of The Spectator approved, describing Miranda as “a mule for industrial-scale sabotage” and arguing that “the right to a free press [does not] extend to the indiscriminate release of secret documents which put agents’ lives in danger, or alert terrorists to the gaps in our capabilities.” Indeed, as The Spectator pointed out, many of Miranda’s staunchest champions in Britain, who invoked the freedom of the press in his defense, are not consistently fans of press freedom; on the contrary, their real reason for standing with Miranda was patently that his actions were potentially very harmful to the U.S. and Britain and very helpful to those countries’ jihadist enemies.

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An anti-Rousseff protest in Sao Paulo last December

It is no coincidence that Miranda, who in his capacity as Greenwald’s “mule” acted against the interests of the U.S. and Britain, is now standing shoulder to shoulder with the socialist regime of Brazil. His claim? That the massive, ever-growing street rallies against Rousseff’s corrupt regime are something of an artificial phenomenon – almost a mirage. The protests, he maintains, didn’t happen organically: they were incited by the anti-Rousseff media. Moreover, being “disproportionately white and wealthy,” the protesters themselves are “not remotely representative of Brazil’s population.” Miranda, as it happens, had already made much the same argument in an earlier article, published in March and written in collaboration with Greenwald and Andrew Fishman. 

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Anti-government protest in Venezuela: a picture from 2014

Attentive readers of this website may recall that supporters of the corrupt, authoritative governments of the late Hugo Chávez and his anointed successor, Nicolás Maduro, in Venezuela, have used much the same arguments (they’re rich, they’re white, they’ve been ginned up by the media) to discredit opponents of chavismo. The Tea Party movement in the U.S. has also been dismissed in similar terms. Somehow protesters aren’t authentic if they don’t fit the right demographic.

In this photo provided by Brazil's Presidency, Brazil's President Luiz Inacio Lula da Silva, left, and Brazil's newly elected leader Dilma Rousseff, make a sign of victory, at the Alvorada palace, in Brasilia, Brazil, Monday, Nov. 1, 2010. (AP Photo/Brazil's Presidency, Ricardo Stuckert) NO SALES
Dilma and Lula

It’s worth noting, by the way, that the chavistas in Caracas have longstanding ties to Rousseff and her predecessor, Luiz Inácio Lula da Silva, in Brasilia. And the ideological continuities are obvious. And just as the chavistas’ incompetent administration, socialist policies, and corrupt conduct have combined to drag Venezuela’s economy into the gutter, so it has become increasingly obvious that the exact same attributes on the part of Brazil’s rulers threaten to bring down its own economy, which not long ago seemed to be on the verge of First World-level prosperity.

In any case, whatever you may think of Greenwald’s other activities, it’s certainly interesting to see him and Miranda – who made their names trying to compromise American and British security, all the while seeking to paint themselves as principled – shamelessly carrying water for the socialist thugs who run Brazil. 

Marcelo’s way

The Odebrecht Group is one of those conglomerates whose international reach and level of diversification make one’s head spin. It’s the largest construction outfit in Latin America; Braskem, one of its innumerable subsidiaries, is Latin America’s biggest petrochemical producer.

“They are more than a company,” a Brasilia-based consultant, Thiago de Aragão, told the Wall Street Journal recently; “they are a symbol of modern Brazil.”

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American Airlines Arena

Indeed. It’s Odebrecht that is responsible for Miami’s $213-million American Airlines Arena, where the Miami Heat play. It’s Odebrecht that is Angola’s top private employer, with over 24,000 employees in that country alone. At this moment, among many other projects, Odebrecht is building a highway in Ghana that will connect the capital, Accra, to remote eastern regions of the country; it’s expanding and adding bridges to a highway that links Guatemala’s main ports with the Mexican border; it’s upgrading a major airport in Mozambique; it’s constructing an elaborate hydroelectric facility in Portugal; it’s installing “the world’s deepest and most complex sewage pump station” in Abu Dhabi. In 2014 the group celebrated its seventh decade in business.

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Marcelo Odebrecht

On March 8, the firm marked another milestone. That was the day on which its CEO, Marcelo Odebrecht, the grandson of the company’s founder, was sentenced to 19 years in prison after being convicted of paying $30 million in exchange for contracts and influence at Petrobras, the state-owned Brazilian oil firm that is at the center of the massive corruption probe known as Operation Car Wash. According to prosecutors, Marcelo’s firms “used Swiss bank accounts to launder nearly $270 million in bribes” between 2006 and 2014.

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Judge Sergio Moro

The presiding judge, Sergio Moro, said Marcelo Odebrecht was “directly involved” with this systematic bribery and money-laundering and “guided the work of others.” This intimate involvement was demonstrated by (among other things) incriminating messages stored on eight cellphones found at Marcelo’s home. While other construction executives nabbed in the probe have bought themselves shorter sentences by turning state’s evidence, Odebrecht refused to spill the beans, saying that he would punish his own kids more harshly for tattling than for cheating.

Marcelo Odebrecht in happier times, with Dilma Rousseff and Raúl Castro

Given the conglomerate’s dimensions and its importance to the Brazilian economy, the arrest and conviction of Marcelo – who took over the reins of the family firm in 2008, at age 40, and whose nickname is “Prince of the Contractors” – is of obvious significance. According to the Journal, Marcelo’s arrest in June of last year caused an economic earthquake, contributing to the onset of Brazil’s current recession. But what makes these developments even more momentousness is Marcelo’s intimate relationship with the Rousseff administration. When the president met with business leaders, Marcelo was invariably present. “Some of the other executives,” one São Paulo businessmen told the Journal, “were jealous that he always got invited and they had to fight for a seat at the table.”

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Lula

Marcelo is close not only to Dilma Rousseff but to her predecessor and mentor, former President Luiz Inacio Lula da Silva, who is himself being investigated for allegedly accepting illegal funds from Odebrecht.

One thing about having global reach is that when you get in trouble, the investigations, too, will have a global reach. Swiss and Portuguese authorities are now looking into charges of wrongdoing by Marcelo, and several other countries are considering similar probes.

Brazil: seeing the monster

Time for another quick trip down to Brazil.

We’ve reported earlier on the multibillion-dollar Petrobras scandal, which is making every American political scandal since Watergate – put together – look like a mere bagatelle. In recent months, as the investigation has widened, more and more top-level businessmen and politicians have been implicated in the kickback scheme centered on the country’s state-run oil firm.

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Dilma and Lula

And just as with Watergate, the net has reached ever higher. In just the past few weeks, authorities have raided the home of the beloved ex-president Luiz Inácio Lula da Silva (known popularly as Lula) and detained him for questioning, in response to which President Dilma Rousseff tried to name Lula as her chief of staff to protect him from prosecution – only to have the appointment blocked by a federal judge. Meanwhile, Rousseff herself has been drawn into the probe, leading to calls for her resignation or impeachment. In short, it’s looking very much these days like an endgame.

Brasil, Brasília, DF. 18/10/2005. O doleiro Alberto Youssef, operador do mercado financeiro que teria ligações com a corretora Bonus-Banval, depõe na sub-relatoria de Movimentação Financeira da Comissão Parlamentar Mista de Inquérito (CPMI) dos Correios, no Congresso Nacional, em Brasília (DF). - Crédito:JOEDSON ALVES/ESTADÃO CONTEÚDO/AE/Código imagem:161138
Alberto Youssef

Things have come a long way since March 2014, when, as David Segal of the New York Times reported in August, Alberto Youssef, described by Segal as “a convicted money launderer and former bon vivant,” sat in his jail cell and told two lawyers that about to reveal information to them that would bring down the Brazilian republic. As Youssef listed the names of the parties who, he claimed, had enriched themselves with Petrobras funds, the attorneys became increasingly aghast; one of them, Tracy Reinaldet, told Segal that “in Brazil, we know that corruption is a monster. But we never really see the monster. This was like seeing the monster.”

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João Vaccari Neto

In the case of Petrobras, the monster is many-headed one. So far over 100 indictments have been issued, several politicians arrested, and over a dozen companies sued. We’ve examined the cases of João Vaccari Neto, treasurer of the ruling Workers’ Party, and party hack Renato Duque, both of whom have been sentenced to long prison terms, the former for corruption and money-laundering, the latter for padding Petrobras contracts and transferring the excess take to party coffers.

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Joao Santana

We’ve discussed Joao Santana, Rousseff’s answer to Clinton campaign strategist James Carville, who was arrested for knowingly accepting payments from those illicit funds. And we’ve surveyed a number of others who’ve been nabbed for their roles in this massive scheme – among them, Paulo Roberto Costa, Petrobras’s former supplies director; Ricardo Pessoa, owner of UTC, a major construction company; and José Dirceu, Lula’s ex-chief of staff. Then there’s a couple of guys who turned state’s evidence: former Petrobras manager Pedro Barusco, who admitted he’d pocketed almost $100 million in dirty money, and businessmen Julio Camargo, who confessed to paying Petrobras $4.5 million in bribes.

But these names are just the tip of the iceberg. Several other big shots from both the public and private sector have also gone down, some of them since our previous look at this debacle. We’ll spend the rest of this week making their acquaintance.

A desperate move in Brazil

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Joao Santana

On February 23, as we noted yesterday, Joao Santana, the James Carville to Dilma Rousseff’s Bill Clinton, was unceremoniously arrested in connection with the massive police probe into price-fixing, bribery, and kickbacks at Petrobras, the Brazilian state petroleum firm. Only six days later, Brazil’s justice minister, Jose Eduardo Cardozo, resigned. Why? Because he, too, had been implicated the corruption? No – because members of the ruling Workers’ Party were furious at him for having failed to put an end to the corruption investigation, known as Operação Lava Jato (Operation Car Wash). Cardozo, a veteran member of the Workers’ Party who has previously served as congressman and mayor of São Paulo and who has long been counted as a “close and reliable friend to the president” and as one of her “most faithful champions,” was the second member of Rousseff’s cabinet to leave in recent months; the first was Joaquim Levy, who resigned in December from the position of Minister of Finance.

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Jose Eduardo Cardozo

Cardozo’s resignation came in the wake of news that the probe had broadened to included none other than Luíz Inácio Lula da Silva, Brazil’s widely revered ex-president, who was in office from 2003 to 2010. According to reports, courts were on the verge of subpoenaing Lula’s financial records. Cardozo’s refusal to interfere in police efforts – and thus keep the damage from spreading to more and more fellow Workers’ Party members – spelled the end of his tenure at the Ministry of Justice. Although Brazilian police are technically under the ministry’s authority, the Minister of Justice has no legal authority to interfere with their activities.

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Rousseff and Lula in happier times

Operation Car Wash has already taken down a long list of top business leaders and Workers’ Party politicians. But as the probe closed in on Lula, the panic in the circles surrounding Rousseff intensified – as did outrage at Cardozo for failing to rein in what loyalists insist on describing as a political witch hunt. Lula, who had already been confronted recently with questions from the police about his children’s shady financial activities, is now being scrutinized over renovations performed at two of his properties, a luxurious beach-front apartment and a rural estate. The renovations were performed by construction firms implicated in the Petrobras corruption; Lula insists, however, that the two properties don’t belong to him.

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Wellington Cesar

Is Cardozo totally out of the government? Far from it. In a neat twist (leave it to corrupt autocrats to come up with moves so rich in poetic irony), he’s been shifted to the job of Attorney General – a position in which he’ll be tasked with protecting Rousseff & co. from the very same investigators who’ve been allowed to proceed with their work under his authority. Meanwhile, Cardozo’s replacement at Justice, one Wellington Cesar Lima e Silva, is expected to lean on those investigators to lay off Lula – and, of course, the president herself. 

It’s looking likelier by the day, however, that any efforts to fend off the fuzz may be in vain. On March 1, the media reported on a plea bargain in which eleven officials of Andrade Gutierrez, Brazil’s second-largest engineering firm, admitted to having paid over $1.27 million under the table to suppliers for Rousseff’s 2010 campaign. As Reuters put it, this testimony represented “the first direct link between the widening ‘Operation Carwash’ investigation into bribes and political kickbacks at state-run oil company Petrobras and the election of Rousseff.”

The sands are shifting fast in Rousseff country. Stay tuned. 

 

The 20-year-old scourge of Brazil’s stooges

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Dilma Rousseff

In recent days we’ve been observing how Brazil – which, a few years ago, looked as if it was on the verge of becoming a prosperous, developed First World-style nation – has rapidly declined, during the presidency of Dilma Rousseff, into an economic disaster zone. Meanwhile, the most massive corruption scandal in the country’s history has brought down one member of her administration after another. In the months after her re-election in October 2014, Rousseff dropped from an 80% to an 8% approval rating. Millions are now calling for her impeachment.

Among the most prominent of them is Kim Kataguiri, who turns 20 years old today.

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Kim Kataguiri, with a laptop reading “Less Marx, More Mises”

Just over two years ago, when he was an obscure college student, Kataguiri attended a history class in which the teacher attributed Brazil’s economic success – which would soon evaporate into nothingness – to the welfare-state policies pursued by Rousseff and her predecessor (and Workers’ Party colleague) Luíz Inácio Lula da Silva.

That just seemed wrong,” Kataguiri said in an October 2015 interview with Time Magazine, which named him one of the year’s most influential teenagers. To Kataguiri – a grandson of Japanese immigrants – it was obvious that Brazil’s growth was a result of “the commodities boom and our relationship with China.” In recent years, China had become Brazil’s #1 trading partner, with the value of trade between the two nations climbing from $2 billion in 2000 to $83 billion in 2013.

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The Free Brazil Movement’s logo

Kataguiri responded to his teacher’s sunny socialism with a You Tube video in which he spoke up for the free market. The video went viral. He followed it with other videos, in which, as Yahoo News has reported, he and a group of like-minded friends, who call themselves the Free Brazil Movement, “often don wacky costumes and dress up as political figures such as Fidel Castro.”

The Free Brazil Movement’s positions are clear. It calls for the introduction of a free-market system, with lower taxes, a smaller government bureaucracy, and complete privatization of publicly held companies. It also demands the impeachment of Rousseff, whose Workers’ Party Kataguiri (now a college dropout) views as “the nemesis of freedom and democracy.” His heroes? Politicians Ronald Reagan, Winston Churchill, and Margaret Thatcher, and economists Friedrich Hayek, Milton Friedman, and Ludwig von Mises.

 

As Brazil’s economy faltered, and then, with terrifying rapidly, spiraled down into the dustbin, Kataguiri and his movement became increasingly popular. On March 15 of last year, when over a million Brazilians attended anti-Rousseff rallies, Kataguiri spoke to an audience of 200,000 at a protest in São Paulo.

CCbJYzSWgAAfp64Pointing out that he had himself “emerged through the Internet,” Kataguiri told Time that he has

a great hope that the internet can have a serious effect on the political world and can bring change. It can improve knowledge, participation and transparency in politics. Now, politics in Brazil looks very bad. Everyone steals. But I have hope that in 20 years things can be different. I have hope that our generation can change the ways things are done.

Dilma Rousseff: decline and fall?

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Dilma Rousseff

Last week we explored the presidency of Brazil’s Dilma Rousseff, who in recent months has seen her throne shaken by the Petrobras scandal – described by the Wall Street Journal as “the biggest corruption case ever in a country with a long history of scandals.” Even Rousseff’s predecessor as head of state, Luiz Inácio Lula da Silva (whose own administration was almost brought down by the 2005 Mensalão scandal), has been under scrutiny in this season of scandal, with authorities looking into shady financial activities involving both Lula and his son as well as into accusations that the former president had lobbied illegally (and profitably) for Odebrecht, a huge Brazilian conglomerate.

In this photo provided by Brazil's Presidency, Brazil's President Luiz Inacio Lula da Silva, left, and Brazil's newly elected leader Dilma Rousseff, make a sign of victory, at the Alvorada palace, in Brasilia, Brazil, Monday, Nov. 1, 2010. (AP Photo/Brazil's Presidency, Ricardo Stuckert) NO SALES
Lula and Dilma, 2010

Even as the Petrobras probes were widening and arrests adding up, Brazil’s economy was in free fall. Brazil’s GDP, which had experienced annual growth of over 5% during the century’s first decade, sunk below 3% in 2012 and 2013 and to 0.1% in 2014. On September 9, 2015, Standard and Poor downgraded Brazil’s credit rating to junk status. Over the course of 2015, Brazil’s economy actually shrunk by 2.7%. Meanwhile, Rousseff’s numbers also dived. In December 2014, her approval rating was at 80%; by March 2015, it was at 34%; by August, 8%. In that month, protesters around the country called for her impeachment. By September, she’d become “Brazil’s most unpopular president in recent democratic history.”

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João Vaccari Neto

In that same month, party treasurer João Vaccari Neto was sentenced to over 15 years in prison for corruption and money-laundering, the latter of which involved over $4 million. Sentenced to prison alongside Vaccari was Renato Duque, who received a more than 20-year term for “inflating contracts at Petrobras” and funneling the excess profits into the coffers of Rousseff’s Workers’ Party. 

RJ - OPERA«√O LAVA JATO/DUQUE/PRIS√O/ARQ - GERAL - Foto de arquivo de 23/06/2005 do ex- diretor de ServiÁos da Petrobras, Renato Duque, durante entrevista na sede da empresa, no centro do Rio de Janeiro. Ele foi preso esta manh„, pela PolÌcia Federal, em nova fase da OperaÁ„o Lava Jato. … a sÈtima etapa da operaÁ„o que investiga um esquema de lavagem de dinheiro suspeito de movimentar R$ 10 bilhıes. A PF tambÈm prendeu executivos e faz busca e apreens„o em cerca de cinco das maiores empreiteiras do PaÌs, o braÁo financeiro do esquema de corrupÁ„o na estatal. 23/06/2005 - Foto: MARCOS DE PAULA/ESTAD√O CONTE⁄DO
Renato Duque

Not long ago, in response to state employees and business executives who’ve blown the whistle on the massive government corruption on her watch, Rousseff famously said: “I do not respect informants.” She cited with pride her refusal, back in her Marxist guerrilla days, to rat on her comrades under torture. Her remarks, of course, reflect a curious attitude (to put it mildly) toward corruption – and, indeed, toward the very concept of public service and stewardship of the people’s resources. In October 2015, maintaining that the mounting accusations against her in connection with the Petrobras scandal were utterly false, she declared: “I do not intend to leave power.”

dilma_lulaTo be sure, on October 19, a parliamentary commission (consisting mostly of pro-government legislators) issued a report purportedly clearing Rousseff and Lula of personal involvement in Petrobras-related crimes. But that report didn’t end the controversy, and nobody expected it to. Rousseff remains under a cloud, and continues to hold on to power by a thread; in late December, Reuters reported that the lower house of Brazil’s Congress would probably decide by March whether to recommend Rousseff’s impeachment.

Meanwhile her administration’s corruption has dramatically altered Brazil’s image on the world stage. Writing in Forbes on October 22, Kenneth Rapoza summed up  the whole messy situation by noting that while Brazil, according to Transparency International, had been the “least corrupt” of “the big four emerging markets” (not really much of an accomplishment, given that the other three are Russia, China, and India), “2015 has shaped up to be the year that threw all that off a cliff.” The Petrobras scandal, wrote Rapoza, had “made Brazilian politics into Latin America’s Greece.” 

Rousseff: round two

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Dilma Rousseff

We’ve been looking this week at Brazil, where, under Luiz Inácio Lula da Silva, who served as its president from 2003 to 2010, the country’s economy boomed. Then his chief of staff, an apparatchik named Dilma Rousseff, was elected to succeed him – and everything started going down the drain.

Not that Rousseff is fully to blame for this decline. It’s clear that its seeds were sown under Lula, when the president and his ideological allies managed to convince themselves that Brazil owed its new prosperity to their welfare programs, rather than to a massive increase in trade with China. But it was Rousseff who was in charge once growth started to falter. Not understanding how economies worked, she responded to her nation’s calamity by doubling down on taxes, bureaucracy, and tariffs – a disastrous formula that guaranteed increasing stagnation. Nor did it help that the massive government and Workers’ Party corruption set in system under Lula only got worse, if anything, on her watch.  

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At a campaign event

Despite the bad choices of her first term, Rousseff was re-elected (by a very close margin) in October 2014. Comments by her supporters left the impression that she’d won despite her handling of the economy, not because of it. (One voter, Natascha Otoya, while admitting that Rousseff’s government had been involved in “corruption,” “embezzlement,” and “white collar crimes,” said that “as a woman, a feminist and a socialist, I am very glad that Dilma has won! 4 more years for the left, I can only be happy about that.”) According to one source, Rousseff was re-elected only because a law requiring Brazilians to vote had guaranteed a big pro-Dilma turnout in poor regions, where people “feared losing their social programs.” 

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Ronaldo Caiado

Unsurprisingly, her victory was celebrated in places like the New Yorker, where John Cassidy called it a win “for the world’s financial markets.” Brazil, insisted Cassidy, was “no basket case.”

Not yet, perhaps. But after Election Day, things got a lot worse – and did so very fast. “There is a process of economic, social and moral collapse under way,” said Senator Ronaldo Caiado, an opposition politician, on March 15, a mere two and a half months into Rousseff’s second term.

Then came the Petrobras scandal. Petrobras is Brazil’s national energy company. From 2003 to 2010, Rousseff, in addition to her other positions under Lula, had served as chair of Petrobras. Operation Car Wash, a probe into the firm’s operations from 2004 to 2014, began in 2014. It soon uncovered evidence that about $2 billion in company funds had been stolen during that decade by Petrobras officials, construction companies, and politicians – Rousseff included.

More on that probe – and the results thereof – tomorrow.