Brazilian Attorney General Roberto Gugel announced Wednesday that his office will investigate a claim that former Brazilian President Luiz Inácio “Lula” da Silva was aware of the massive 2005 vote-buying scheme known as the “mensalão,” in which members of Lula’s Partido dos Trabalhadores (Workers' Party—PT) and other politicians bribed Brazilian lawmakers to back PT initiatives in Congress.
Former businessman Marcos Valério, who was sentenced to more than 40 years in prison by the Supreme Court in October for his involvement in the scandal, alleged that the former president had authorized loans for the scheme and used some of the money to pay for his personal expenses. Valerio made the accusations in testimony before prosecutors at the Ministério Público Federal (Federal Public Ministry—MPF) in September after he was convicted, which were published in the Estado de São Paulo last week.
Speaking outside the Supreme Court on Wednesday, Gugel said that he was skeptical of Valério’s version of events, but said they merited investigation nonetheless. “Marcos Valério has frequently made statements that can be considered bombastic, and when we analyze them further, there’s nothing there. But we’ll see what there is in his testimony that could motivate a future investigation,” Gugel said.
Lula, who left office in 2010 with an 87 percent approval rating, has flatly denied the accusations. At a metalworkers’ union gathering in São Paulo on Wednesday, the former president alluded to Valério in his comments, saying that “what most harms my adversaries is my success.” Eight Brazilian state governors and a number of deputies visited Lula to express their support for him on Tuesday.
Joaquim Barbosa was elected on Wednesday as Brazil’s new Supreme Court president in a plenary session held by the court's 10 justices. His two-year tenure begins in November with the retirement of the court’s current president, Carlos Ayres Britto.
Barbosa was appointed by former President Luiz Inácio Lula da Silva to the Supreme Court in 2003 and is the only Afro-Brazilian to have ever served on the court. Barbosa is currently presiding over the high-profile mensalão (“big monthly payout”) trial, involving a congressional cash-for-votes scheme that surfaced in 2005.
Brazil has the largest black population behind Nigeria, with Afro-Brazilians representing 53 percent of Brazil’s population. Though there are a total of 200 million people of African descent in Brazil, they face significant challenges in reaching the higher echelons of society. Barbosa has constantly criticized what he views as pervasive racism and social inequality. For example, illiteracy rates among Afro-Brazilians run as high as 20 percent, but drop to only 6 percent for whites.
Barbosa came from humble beginnings. He was born as the son of a builder and was educated in Brazil's state school system. He then moved to the capital, Brasília, where he studied for a law degree at the city's best university. To support himself through college, he worked as a typist and a domestic worker in one of the city's courts, and later began a successful career as a public prosecutor.
"Barbosa made history today, as it is very rare in Brazil to see Blacks in positions of power in the corporate world, in universities and in government," said Marcelo Paixão, who directs the Laboratório de Análises Econômicas, Históricas, Sociais e Estatísticas das Relações Raciais (Laboratory of Economic, Historical, Social and Statistical Analysis of Race Relations—LAESER), a research center that focuses on issues of race at Brazil's Universidade Federal do Rio de Janeiro (Federal University of Rio de Janeiro—UFRJ).
There is one story dominating the Brazilian headlines: The mensalão, a huge corruption case that could taint the legacy of former President Lula and the reputation of his Partido dos Trabalhadores (Workers’ Party—PT) to which his successor Dilma Rousseff belongs.
Certainly the scope is wide. With 38 high-profile defendants including former ministers, bankers and wealthy businessmen, 600 witnesses and, according to calculations by Globo, a slush-fund of more than R$100 million ($49.7 million) in public funds, the mensalão has been dubbed the “trial of the century” by commentators here.
Prosecutors charge that, from 2003 to 2005, public money was handed to some members of the ruling coalition as a “mensalão”—roughly translated to “big monthly payment”—to ensure their support on key votes. The money was allegedly moved through government contracts granted to private companies, which then redistributed the funds amongst legislators.
The defendants deny the accusations, originally made by whistle-blower Roberto Jefferson, president of the Partido Trabalhista Brasileiro (Brazilian Worker Party—PTB) who belonged to Lula’s coalition but did not support Dilma’s bid for the presidency. If found guilty of the charges, which include corruption and racketeering, the defendants could face prison terms of up to 45 years.
Top stories this week are likely to include: Dilma Rousseff in Washington; Sixth Summit of the Americas on Saturday; Chávez possibly seeking treatment in Brazil; Maras and Zetas reportedly joining forces; and Boudou under investigation.
Dilma in Washington: Brazilian President Dilma Rousseff begins a three-day visit to Washington today, where she will meet with her U.S. counterpart Barack Obama. This is Rousseff’s first visit to the U.S. since taking office in January 2011. Aside from meetings at the White House, Rousseff will speak at the U.S. Chamber of Commerce later today, and give a public speech at Harvard University tomorrow. In the Financial Times, Moisés Naim calls for the two countries to agree to a trade deal as a tangible outcome. Adds AQ Editor-in-Chief, Christopher Sabatini, “There will be plenty to discuss, from improving bilateral commerce and investment, Brazil’s recent flurry of legislation favoring local content and business, Iran, and—I hope—the upcoming presidential elections in Venezuela.”
Summit of the Americas on Saturday: Cartagena, Colombia, will host this weekend the Sixth Summit of the Americas, the regional conference of heads of state organized under the aegis of the Organization of American States. This year’s theme is “Connecting the Americas: Partners for Prosperity.” But will the summit yield any significant results? Notes Sabatini: “While this will be a great opportunity to show off how far Colombia has come in the 18 years since the summit process started, there is really very little the summit can accomplish beyond speeches and vague promises.”
Chávez May Seek Treatment in Brazil: Although Venezuelan President Hugo Chávez landed in Havana on Sunday to receive his latest round of radiotherapy, Brazilian media has been reporting that Chávez may seek further treatment at Sírio-Libanês hospital in São Paulo. This is the same hospital where former Brazilian President Luiz Inácio Lula da Silva last year successfully recovered from cancer surgery. Specifically, O Globo has reported—citing anonymous sources—that Chávez’ cancer has metastasized and may spread to his liver. Although the Venezuelan embassy in Brasília has denied the reports, pay attention to how this story develops over the coming days.
Maras-Zetas Alliance: Guatemalan authorities this weekend reported that the deadly Mara Salvatrucha gang, which dominates Central America’s Northern Triangle, has formed a pact with the equally dangerous Zetas group in Mexico for control of key drug transit routes from South America to the United States. In an already violence-plagued Central America, the alliance spells bad news for counternarcotics officials and may bolster the positions of Guatemalan President Otto Pérez Molina—a proponent of drug legalization—at this weekend’s Summit of the Americas. “An alliance between two of the region’s most feared criminal networks yet again reinforces the critical need for a real regional approach to reducing insecurity. The drug traffickers don’t respect borders and neither should counternarcotics efforts,” notes AQ Senior Editor Jason Marczak.
Future of Boudou: Argentine Vice President Amado Boudou is now under investigation by federal authorities for his actions as economy minister—in the two years prior to assuming the vice-presidency—specifically that he helped printing company Ciccone Calcográfica get out of bankruptcy. Boudou has denied the charges and still has the full support of President Cristina Fernández de Kirchner and her administration. After a raid of Boudou’s apartment last week, there may be new developments this week on the ongoing investigation.
After just over a century of amicable relations, Brazil has decided to cool its relationship with Iran.
Gone are the days when Brazil's leader, President Luiz Inácio "Lula" da Silva (2002-2010), worked hard to strengthen Brazil's partnership with Iran, defending Iranian interests, sharing and learning from similar policy experiences over cafezinho.
At a time when Brazil has sought every opportunity to engage the international community and increase its influence as a mediator of conflict and peace, why has Brazil's new president, Dilma Rousseff, refrained from strengthening the government's ties with Iran?
The answer lies in Rousseff's personal experiences and geopolitical ambitions.
As someone who experienced human rights violations first hand under Brazil's military dictatorships (1964-1985), Rousseff has been unwaveringly committed to human rights. She has made it crystal clear that she will not support Iran unless President Mahmoud Ahmadinejad seriously addresses this issue.
It's striking how quickly two nations sharing similar economic and geopolitical interests have suddenly distanced themselves from each other and how Brazil's decision may negatively affect Iran's relationship with other countries.
What this also suggests is that amicable relationships between similar nations are never guaranteed and that a sudden change in government interests and aspirations can reverse historic partnerships while having broader geopolitical ramifications.
For Rousseff, personal experiences matter.
As a high school student from the city of Belo Horizonte, she joined a Marxist revolutionary group called Palmares Revolutionary Armed Vanguard (Var-Palmares), which sought to dethrone a military government that repeatedly violated civil and human rights.
In 1970, she was arrested, interrogated and placed in prison. While serving three years, Rousseff was periodically tortured: electrical shocks ran throughout her body; she was incessantly beaten and called names; she was hung upside down in between two steel platforms in what the military called the pau de arara ("parrot’s perch"). By the time of her release at 25, she lost more than 22 pounds and her thyroid glands were nearly destroyed.
Needless to say, these horrific experiences had an enduring imprint on Rousseff's foreign policy views.
Indeed, when questioned about Iran during her campaign trail in 2009, the first two words to often come out of her mouth were "human" and "rights." The Iranian regime's atrocious history of killing thousands of dissidents, when combined with Iranian court orders to have several people stoned to death for violating the law was viewed by Rousseff as "medieval behavior." Moreover, the regime's decision to continuously throw political opponents in jail touched a sensitive nerve with Rousseff.
She made it very clear that before any business took place with Iran, Ahmadinejad would need to stop these barbaric acts. Yet this may prove difficult as Ahmadinejad's political influence is often perceived as limited because of the presence of Iran's Supreme Leader Ayatollah Ali Khamenei.
Being blamed and essentially ignored by Ahmadinejad also didn't help. Last year, Ahmadinejad's media adviser, Ali Akbar Javanfekr, was quoted as stating that Rousseff had "destroyed years of good relations" between them.
Under Lula, Brazil strengthened its political and economic ties with Iran through trade (indirectly via Dubai, estimated at $1.25 billion in 2010) and investment in Iran's oil sector. But when Ahmadinejad visited Latin America this January, he avoided meeting with Rousseff. Apparently he regrets having done so and plans to meet with her later this year.
Rousseff's geopolitical aspirations have also caused her to step away from Tehran. After Lula joined Turkey in 2010 to vote against UN sanctions on Iran for failing to disclose information about its nuclear reactor site and ignoring Secretary of State Hillary Clinton's request to do so, it appears that Rousseff views distancing herself from Iran as a way to strengthen Brazil's relationship with the United States.
Through these efforts, it seems that Rousseff is seeking to garner U.S. support for a permanent seat on the UN Security Council, as well as increasing Brazil's influence in major international financial institutions, such as the International Monetary Fund.
Without Rousseff's support, Ahmadinejad faces problems in Latin America.
Iran has tried to strengthen ties with Venezuela, Ecuador, Bolivia, Cuba, and until recently, Brazil. And it's opened six embassies in the region since 2005, sans Brazil. But Ahmadinejad can essentially forget about getting the support of Brazil's close economic allies, such as Mexico, Argentina and Chile. Ahmadinejad has also failed to live up to his promise of helping spur economic development in the region.
At a time when he is trying to increase his legitimacy, given his hostile relationship with Israel and efforts to develop his nuclear reactors, Ahmadinejad might not be able to afford losing his Latin friends, as they have defended him in the past and their support makes him look less isolated in the world.
This freeze in relations with Brazil, and Iran's gradual loss of allies in the region, also opens up further opportunity for the United Nations to impose and enforce additional sanctions on Iran. Should this occur, Ahmadinejad faces the specter of other allies questioning their relationship with Iran, which could have serious political and economic repercussions for Iran.
Despite the rich history that these two nations share, it seems unlikely that Rousseff will want to strengthen her ties with Ahmadinejad.
With aspirations to increase Brazil's international influence and geopolitical importance, she will likely place more stock in strengthening her relationship with the United States and other cooperative nations within the United Nations. Unless Ahmadinejad changes his tune on human rights and decides to fully abide by UN rules, Iran's losses may go beyond Brazil.
Eduardo J. Gomez is assistant professor in the department of public policy and administration at Rutgers University.
On Tuesday President Dilma Rousseff announced a series of stimulus measures to kick-start the Brazilian economy. After a disappointing 2.7 percent GDP growth in the 2011 fiscal year, President Rousseff is hoping to reach at least 4.5 percent economic growth for the 2012 fiscal year.
The stimulus packet, worth about 60.4 billion reais ($33 billion), will include a mixture of fiscal incentives, including lowering payroll taxes for employers in hard-hit industries and increasing tariffs on products that have been gaining market space. Furthermore, the state-sponsored Brazilian Development Bank (BNDES), backed by a 45-billion reais ($24.5 billion) injection from the Treasury department, will increase its loans to subsidized companies in order to foster local production. According to President Rousseff, Brazil has to make use of its big and growing internal market, which also attracts great amounts of foreign investment.
These measures mark an important shift in strategy in President Rousseff’s administration. She came to power in the beginning of 2011 with an agenda ready for a country whose GDP had grown by 7.5 percent in 2010. The unexpected slowdown of the economy, however, has necessitated the adoption of fiscal measures to stimulate local businesses. Responding to criticism from the Brazilian congress over Rousseff’s management of the economy, former president Luiz Inácio “Lula” da Silva announced his full support of the Rousseff administration.
The news that Brazil has overtaken Britain to become the world's sixth largest economic power is being touted as a sign that that the longtime "country of the future" has finally arrived. While the celebrations have been somewhat muted by concerns over slowing GDP growth and the country's still-heavy dependence on high energy and food prices, Brazil is heading into the coming global showcases of both the 2014 World Cup and the 2016 Summer Olympics with more than its usual swagger.
But this emerging economic prominence is raising the question of just what kind of actor Brazil will be on the world stage. In the past 20 years, Brazil has become well known for turning crisis situations into geopolitical opportunities, becoming a leading voice in international forums devoted to AIDS, poverty, and even the environment. And now, it is doing it again with a challenge that Brazilians understand all too well: a debt crisis.
Only this time, it's Europe in need of a helping hand, not the former Portuguese colony in Latin America. At an EU-Brazil summit held in Brussels last October, President Dilma Rousseff told European leaders, who had asked for assistance: "You can rely and count on us." As an initial strategy, Rousseff and her finance minister, Guido Mantega, considered using their foreign exchange reserves—estimated at $352 billion—to purchase debt through treasury bonds. However, after consulting with her BRIC colleagues at a meeting in Washington last November, Brazil decided that buying EU bonds would be too financially risky, and proposed instead to indirectly assist Europe by donating an estimated $10 billion to the International Monetary Fund.
As general debate of the United Nations General Assembly’s (UNGA) 66th Session got underway this week, the issue of UN structural reform was again brought into focus—with Brazil leading the charge. A thriving democracy and one of the largest emerging economies in the world, Brazil has powerful ammunition in making its demand—especially paired with the collective declining influence of deficit-ridden, developed nations.
The desired trophy for Brazil comes in the form of a permanent seat in the United Nations Security Council (UNSC). This elite organ has retained the same numerical composition—15 seats: 5 with permanent tenures (China, France, Russia, the United Kingdom, and the United States) and 10 with temporary, two-year terms—since its formation in 1946.
Critics of the status quo argue that this small size does not accurately reflect the global developments of the last 55 years. Brazil, as it vocally carries the banner of emerging nations that feel underrepresented in the UN, has chosen to act on reform. The most notable way of doing so has been through the Group of 4 (G4), an alliance formed in 2004 composed of Brazil, Germany, India, and Japan. Each of the G4 nations mutually supports the other members’ bids.
The G4 seeks to expand the size of the UNSC by two-thirds, from 15 members to 25, through the addition of 6 permanent and 4 non-permanent seats. The permanent seats would be comprised of the G4 plus two nations from Africa. However, discord within the African Union has stifled compromise on this issue; Egypt, Nigeria and South Africa are all vying for the two proposed seats and cannot arrive at an agreement.
The G4 is also facing competition from a larger but less influential faction of UN members: Uniting for Consensus (UfC). Members of the UfC, some 40 in number, also favor expanding the UNSC to 25 seats—but by adding 10 temporary seats and keeping the same 5 permanent, veto-carrying members. This makes sense, considering that many of the UfC’s core members are regional rivals of the G4—including Argentina, Mexico, Pakistan, Turkey, Italy, and South Korea—who have a vested interest in thwarting any sort of growing regional influence among the individual G4 members.
Although he won’t assume Peru’s presidency until July 28, a poll released yesterday by Peruvian firm Ipsos Apoyo reveals that President-elect Ollanta Humala enjoys a 70 percent approval rating with five weeks to go before his inauguration. Sixty-one percent of the electorate also believes he will govern moderately, similar to former Brazilian President Luiz Inácio Lula da Silva. Investors’ fears that he would drift toward Venezuelan President Hugo Chávez’ style of leadership temporarily crashed Peru’s stock exchange two weeks ago today.
Political observers in Peru warn that Humala will have to juggle several demands to satisfy the population. First, he will have to maintain the calm in the business sector to ensure steady commercial growth and foreign direct investment—one of the highest rates in South America. Second, Humala will also have to address the social concerns of the Peruvian people, such as a staunch fight against corruption.
The latter is an issue that Humala advocated for strongly in the presidential campaign, particularly in the runoff against Keiko Fujimori, the daughter of corruption-tainted ex-President Alberto Fujimori. Seventeen percent of the electorate disapproves of Humala while 13 percent remain undecided.
The election guessing game in Peru has ended and now the Humala guessing game has begun: Will Ollanta Humala be the Peruvian equivalent of Venezuela’s Chávez or Brazil’s Lula? The answer, on which may hang Peru’s torrid rates of economic growth—among the highest in the region—and web of free-trade agreements with everyone from China to the United States, has become a parlor game for investors and observers, as we all watch whom Humala nominates to his cabinet. More than the people he chooses to populate his first round of appointments, the answer may actually lie in his formation as a military officer.
When he first ran for president in 2006, Humala professed his admiration for Venezuelan President Hugo Chávez; he even campaigned in the trademark-Bolivarian red tee shirt. Only five years later, the one-time lieutenant colonel who led an uprising against former elected autocrat President Alberto Fujimori, claimed he was a moderate leftist in the mold of former Brazilian President Luiz Inácio Lula da Silva, who embraced markets and foreign investors and reduced poverty.
It’s not hard to understand why he shifted role models. In the intervening five years, President Chávez has gone from the leader of an anti-American bloc of countries during the years of President George W. Bush to the head of the most dysfunctional economy in the region, with rates of inflation this year likely topping 25 percent and an economy that, even with the spike in oil prices, will be one of the last to rise out of the region’s post-recession torpor. In contrast, President Lula, by hewing to a course of fiscal stability, appointing confidence-instilling technocrats and supporting both foreign investors and Brazilian companies, has both kept Brazil on a path of stable economic growth and—combined with innovative social policies—reduced the number of the Brazilian poor by up to 38 million. No mean feat.
The first round of elections in Peru shocked the country and the world. After what appeared to be enviable rates of economic growth and stability, a slim majority of voters rejected the center, aided in part by a three-way split between former Lima Mayor Luis Castañeda Lossio, former President Alejandro Toledo and former Prime Minister Pedro Pablo Kuczynski. In a vitiated party system, the center lost to two candidates on either side of the spectrum—Keiko Fujimori, the daughter of Alberto Fujimori who governed from 1990 to 2000 and is now jailed for corruption and human rights violations, and Humala.
June 1: This AQ-Efecto Naím segment looks at sustainable cities in the hemisphere.