Likely top stories this week: Venezuela’s National Assembly is increasing presidential powers for President Nicolás Maduro; Demand for U.S. oil grows in Latin America; Michelle Bachelet enters second round of presidential elections in Chile; Arrest warrants are issued for bankers and politicians involved in Brazil’s biggest corruption trial; Cristina Fernández de Kirchner returns to office.
Presidential Powers in Venezuela: Venezuela’s National Assembly gave initial approval to a bill last week that would grant President Nicolás Maduro decree powers for 12 months. Maduro says he plans to use the new authorities to combat corruption and the country’s ongoing economic crisis, yet critics fear it will be used to suppress the opposition. The bill still requires final approval from a special commission, but is unlikely to undergo substantial changes.
Demand for U.S. oil grows in Latin America: Demand for U.S. fuels has doubled in Latin America during the past five years and continues to grow. The increased demand is due to economic growth and outdated Latin American refineries that have been unable to sustain production at levels comparable with market demands.
Bachelet Enters Second Round Presidential Elections in Chile: Michelle Bachelet won nearly twice as many votes as her second-place opponent, Evelyn Matthei, in the first round presidential elections in Chile. Bachelet won 47 percent of votes and Matthei won 25 percent, leading the two into a final and second round which will be Chile’s first in which both candidates were women. Bachelet’s center-left Nueva Mayoría (New Majority) coalition failed to win a super-majority in Congress, posing a challenge to the candidate’s proposed social and economic reforms.
Supreme Court Issues Arrest Warrants in Brazil Corruption Trial: Brazil’s Supremo Tribunal Federal (Supreme Federal Tribunal—STF) issued arrest warrants on Friday for 12 of the 25 convicted politicians, businessmen and bankers involved in the country’s Mensalão (monthly allowance) corruption scandal. Several prominent politicians—including José Genoino, the former president of the Partido dos Trabalhadores (Workers’ Party—PT), and José Dirceu, former chief-of-staff to President Luiz Inácio Lula da Silva—immediately turned themselves into federal authorities.
Cristina Fernández de Kirchner Returns to Office: Argentine President Cristina Fernández de Kirchner returned to office Monday after taking a six-week medical leave and undergoing surgery to stop internal bleeding caused by head trauma. Following her doctors’ recommendation, Kirchner remained on leave for a week longer than she had originally planned.
Brazil’s Supremo Tribunal Federal (Supreme Federal Tribunal—STF) was deeply divided on the afternoon of September 18. The court’s eleven justices had to decide whether they would accept a motion to hear the appeals of twelve politicians charged in last year’s landmark corruption trial, popularly deemed as the mensalão (monthly allowance).
Ten justices voted in last week’s decision: five voted in favor of the motion and five voted against it. The nation waited eagerly until last Wednesday to learn which way Justice Celso de Mello—the Court’s deciding vote—had leaned. If Justice Mello were to decide that the Court should deny the motion, the eight-year-long mensalão trial would have concluded that very day. But the result is now public: Justice Mello voted to accept the motion, thus beginning a new chapter in the historic case.
In a symbolic expression that represented the disappointment of millions of Brazilians who watched the televised judgment live on TV Justiça, Chief Justice Joaquim Barbosa appeared visibly frustrated upon learning of the results. But what does the decision mean, and why is the majority of the Brazilian public seemingly opposed to it?
The mensalão case has been recognized as the biggest corruption scandal in Brazilian history, involving important political figures such as José Dirceu, former chief-of-staff for President Luiz Inácio Lula da Silva, and João Paulo Cunha, former president of the Câmara dos Deputados (Chamber of Deputies).
Collaborators organized an intricate vote-buying scheme to ensure that legislation received quick congressional approval from a diverse governing coalition that otherwise lacked consensus. The scheme started in 2003, during Lula’s first year as president, but was not made public until 2005. The infamous trial leveraged a series of allegations against 39 politicians—25 were ultimately sentenced to various criminal charges in 2012.
Brazil’s Supreme Court has historically been seen as the nation’s moral pillar. Following the court’s 2012 verdicts, the media and the Brazilian public celebrated the emblematic outcome as the beginning of a new era, in which those involved in corruption could finally be held accountable. Sadly, they rejoiced too soon—the appeals process would quickly prove them wrong.
For four months in 2012, like a national soap opera, Brazilians watched the biggest political corruption trial in the country’s history unfold inside Brasilia’s Supreme Federal Court. The complex plot, whose script was based on seven years of investigation, revealed a bribery scheme known as the mensalão—in which members of the Partido dos Trabalhadores (Workers’ Party—PT) bribed members of Congress in exchange for political support between 2003 and 2005.
According to the investigation initiated in 2005 and carried out by the Public Ministry, the Federal Police and the Brazilian Court of Audit, the scheme involved about 100 million reais (about $50 million) in irregular payments to congressmen.
In December 2012, 37 people, including politicians, businessmen, lawyers, and bankers were put on trial, with 25 found guilty.
“The results of this trial shake the feeling of impunity that exists in Brazil,” explained Federal Court Minister Marco Aurélio de Mello.
Last week, the Supremo Tribunal Federal (Supreme Federal Court—STF) began the final stage of the trial, considering the last possible appeals by the defendants. The judges may adjust the sentences or even render new verdicts.
Impunity is so entrenched in Brazil that not even the federal police officer in charge of the investigations believed that those charged would be convicted. “The result was better than I expected,” said Luís Flávio Zampronha. “In Brazil you don’t see effective punishment—for example, imprisonment of people who have greater economic power.”
José Dirceu, the all-powerful former chief of staff to former President Luiz Inácio Lula da Silva, was sentenced to 10 years and 10 months in prison for masterminding the scheme. He was also fined $338,000. The former president of the PT, José Genoíno, and the former PT treasurer, Delúbio Soares, were found guilty of corruption alongside Dirceu.
The key player in the mensalão case, entrepreneur Marcos Valério, was sentenced to 40 years in jail and fined $1,319,800. The whistleblower, representative Roberto Jefferson, along with former federal representatives from four different political parties were charged with crimes and convicted.
The mensalão case has strong political implications. Those condemned have yet to be jailed because of appeals; during the recent protests, Brazilians demanded that the mensalão's defendants be sent to prison.
But this is not the first corruption scandal involving important Brazilian politicians in recent history. Until now, unethical or illegal behavior has yet to be an impediment to a long career in Brazilian politics.
In September 1992, Fernando Collor de Mello became the first president of Brazil to be removed from office for criminal liability after Congress voted to impeach him, with 441 votes in favor, 38 against and one abstention. Though found guilty by his peers, Collor was nonetheless acquitted by the Supreme Federal Court, which also judged the mensalão scandal. Today Collor is back in power as a senator for the Partido Trabalhista Brasileiro (Brazilian Labor Party—PTB)
A majority of Brazilian Supreme Court justices found the former chief of staff of former Brazilian President Luiz Inácio Lula da Silva guilty of “active corruption” on Tuesday and Wednesday, casting a shadow on the legacy of the popular former president.
Speaking on Tuesday, six of eight justices found José Dirceu guilty of involvement in a 2005 vote-buying scheme that has since been known in Brazil as the mensalão (“big monthly payout”) scandal. The scandal involved various members of Lula’s Partido dos Trabalhadores (Workers' Party—PT), who were accused of bribing lawmakers to back PT initiatives in Congress.
Of the 37 defendants to come before the Supreme Court in connection with the scandal, several are prominent Brazilian politicians and businesspeople—including the former president of the PT, José Genoino, the former president of the Brazilian Chamber of Deputies, João Paulo Cunha, and the former director of the Banco do Brasil, Henrique Pizzolato. Members of other political parties were also found to be involved in the mensalão. Altogether, the defendants face a collective 1,089 counts of criminal wrongdoing, including corruption, money-laundering, misuse of public funds, embezzlement, and conspiracy.
On Wednesday, Justice Celso de Mello added his voice to the majority vote against Dirceu, leaving only Carlos Ayres Britto left to vote. For his part, Dirceu condemned the “strong pressure of the media” in influencing the decision, saying he was “pre-judged and lynched.” Dirceu made a name for himself fighting Brazil’s 1964-1985 military dictatorship both in Brazil and in exile and later served as the PT’s president from 1995-2002. He was forced to step down as the Presidential Chief of Staff in 2005 after the scandal broke.
“I’ll accept the decision, but I won’t keep silent,” Dirceu said after the Supreme Court’s ruling against him. “I’ll continue fighting until I prove my innocence,” he said.
Former President da Silva faces no charges related to the mensalão himself. According to Datafolha, 57 percent of Brazilian voters polled earlier this year said they would like to see da Silva run for president in 2014.
In a historic trial that resumes today, members of Brazil’s Supreme Federal Tribunal will decide whether public funds were used for monthly political payouts in Brazil’s infamous 2005 mensalão scandal.
The verdict delivered this week has implications on the legacy of former Brazilian President Lula da Silva, whose government is implicated in the scandal. The case revolves around accusations that members of Lula’s Worker’s Party (PT) bribed Brazilian lawmakers to back PT initiatives in Congress using money from state-owned companies. In all, 37 defendants, including Lula’s chief of staff, José Dirceu, and other senior officials, will be judged on a variety of felony charges that include money laundering and vote-buying.
On Monday, six of the 11 Supreme Court justices weighed in on whether the former president of the Brazilian Chamber of Deputies, João Paulo Cunha, and the former director of Banco do Brasil, Henrique Pizzolato, are guilty of corruption, alongside Marcos Valério, a businessman at the center of the scandal, and Valério’s two business partners, Ramon Hollerbach and Cristiano Paz.
All justices who spoke on Monday unanimously condemned Pizzolato, Valério, Hollerbach, and Paz, though they disagreed on whether Cunha was guilty of corruption. The remaining justices are scheduled to speak on Wednesday and Thursday, including Cezar Peluso, who is scheduled to retire from the bench when he turns 70 next Monday.
Dozens of Brazilian political figures and public officials have already been dismissed as a result of the scandal, though corruption has long played a major role in Brazilian politics. The federal auditor’s office has fired nearly 4,000 public employees since 2003, mostly for corruption, and blacklisted thousands of companies and individuals for corrupt business practices.
Brazilian Attorney General Roberto Gurgel said that the court’s swiftness in the voting thus far indicates that the charges against the defendants are serious. "This was important because it demonstrates that we aren’t dealing with light accusations,” he said.