The BRIC countries are in trouble. For a season the dynamos of international growth while the West was mired in the worst financial crisis and recession since the Depression, they are now the leading source of anxiety in the headquarters of the IMF and the World Bank. China, above all, because of its weight in the global economy: slowing output and a himalaya of debt. Russia: under siege, oil prices falling and sanctions biting. India: holding up best, but unsettling statistical revisions. South Africa: in free fall. Political tensions are rising in each: Xi and Putin battening down unrest with force, Modi thrashed at the polls, Zuma disgraced within his own party. Nowhere, however, have economic and political crises fused so explosively as in Brazil, whose streets have in the past year seen more protesters than the rest of the world combined.
Picked by Lula to succeed him, Dilma Rousseff, the former guerrilla who had become his chief of staff, won the presidency in 2010 with a majority nearly as sweeping as his own. Four years later, she was re-elected, this time with a much smaller margin of victory, a 3 per cent lead over her opponent, Aécio Neves, the governor of Minas Gerais, in a result marked by greater regional polarisation than ever before, the industrialised south and south-east swinging heavily against her, and the north-east delivering an even larger landslide for her – 72 per cent – than in 2010. But overall it was a clear-cut win, comparable in size to that of Mitterrand over Giscard, and a good deal larger, not to mention cleaner, than that of Kennedy over Nixon. In January 2015 Dilma – from this point we’ll drop the surname, as Brazilians do – began her second presidency.
Within three months, huge demonstrations packed the streets of the country’s major cities, at least two million strong, demanding her ouster. In Congress, Neves’s Brazilian Social Democracy Party (PSDB) and its allies, emboldened by polls showing Dilma’s popularity had fallen to single figures, moved to impeach her. On May Day, she was unable even to give the traditional televised address to the nation: when her speech on International Women’s Day in March had been broadcast people banged saucepans and blew car horns, a form of protest that became known as panelaço. Overnight, the Workers’ Party (PT), which had long enjoyed by far the highest level of approval in Brazil, became the most unpopular party in the country. In private, Lula lamented: ‘We won the election. The following day we lost it.’ Many militants wondered if the party would survive at all.
How had it come to this? In the last year of Lula’s rule, when the global economy was still gripped by the aftermath of the financial crash of 2008, the Brazilian economy grew 7.5 per cent. On taking office, Dilma tightened policy against risks of overheating, to the satisfaction of the financial press, in what looked like the kind of reinsurance policy Lula had himself taken out at the start of his first term. But as growth fell sharply, and world financial skies darkened once more, the government changed course, with a package of measures intended to prime investment for sustained development. Interest rates were lowered, payroll taxes cut, electricity costs reduced, loans to the private sector from private banks increased, the currency devalued and limited control of capital movements imposed.＊ On the heels of this stimulus, halfway through her presidency, Dilma enjoyed an approval rating of 75 per cent.
But, far from picking up, the economy slowed from an already mediocre 2.75 per cent in 2011 to a mere 1 per cent in 2012, and with inflation above 6 per cent, in April 2013 the Central Bank abruptly raised interest rates, undercutting the ‘new economic matrix’ of Guido Mantega, the finance minister. Two months later, the country was swept by a wave of mass protests, triggered by higher bus fares in São Paulo and Rio but quickly escalating into generalised expressions of discontent with the quality of public services and, fanned by the media, of hostility to an incompetent state. Overnight, the government’s approval ratings halved. In response, it beat a retreat, starting cautionary reductions in public spending and allowing interest rates to rise again. Growth fell further – it would be nil in 2014 – but employment and wages remained stable. At the end of her first term Dilma waged a defiant campaign for re-election, assuring voters that she would continue to give priority to improving the living standards of working people, and attacking her PSDB opponent for planning to reverse the social gains of PT rule by slashing social benefits and hitting the poor. In the face of a continuous ideological barrage against her in the press, it was enough to give her victory.
Half-hidden, the roots of this debacle lay in the soil of the PT’s model of growth itself. From the outset, its success relied on two kinds of nutrient: a super-cycle of commodity prices, and a domestic consumption boom. Between 2005 and 2011, the terms of trade for Brazil improved by a third, as demand for its raw materials from China and elsewhere increased the value of its principal exports and the volume of tax receipts for social expenditures. By the end of Lula’s second term, the share of primary commodities in the Brazilian export package had jumped from 28 to 41 per cent, and manufactures had fallen from 55 to 44 per cent; by the end of Dilma’s first term, raw materials accounted for more than half the value of all exports. But from 2011 onwards the prices of the country’s leading tradable goods collapsed: iron ore dropped from $180 to $55 a ton, soya from $18 to $8 a bushel, crude oil from $140 to $50 a barrel. Compounding the end of the overseas bonanza, domestic consumption hit the buffers. Throughout its rule, the core strategy of the PT had been to expand home demand by increasing popular purchasing power. That was achieved not only by raising the minimum wage and making cash transfers to the poor – the Bolsa Família – but by a massive injection of consumer credit. Over the decade from 2005 to 2015, total debt owed by the private sector increased from 43 to 93 per cent of GDP, with consumer loans running at double the level of neighbouring countries. By the time Dilma was re-elected in late 2014, interest payments on household credit were absorbing more than a fifth of average disposable income. Along with the exhaustion of the commodity boom, the consumer spree was no longer sustainable. The two motors of growth had stalled.
In 2011 the aim of Mantega’s new economic matrix had been to kick-start the economy by lifting investment. But his means of doing so had diminished. State banks had been steadily increasing their share of loan capital, from a third to a half of all credit since he took over in 2006 – the portfolio of the government’s development bank, BNDES, rose sevenfold after 2007. Offering preferential rates to leading companies that added up to a much larger subsidy than outlays to poor families, the ‘Bolsa Empresarial’ cost the treasury about double the Bolsa Família. Favourable to large commodity and construction firms, this direct expansion of public banking was anathema to an urban middle class in an increasingly violent anti-PT mood, with the local media – amplified by the business press in London and New York – vituperating the dangers of statism. So, switching direction, Mantega sought to boost private sector investment by tax concessions and lower interest rates, at the cost of a reduction in public infrastructural investment, and to help manufacturers by a devaluation of the real. But Brazilian industry was wooed in vain. Structurally, finance is a much stronger force in the country. The combined capitalisation of its two largest private banks, Itaú and Bradesco, is now twice that of Petrobras and Vale, its two biggest extractive firms, and far sounder. The fortunes of these and other banks have been made from the highest long-term interest regime in the world – crippling for investors, manna for rentiers – and staggering spreads between deposits and loans, with borrowers paying anything from five to twenty times the cost of the same money to lenders. Flanking this complex is the sixth largest bloc of mutual and pension funds in the world, not to speak of the biggest investment bank in Latin America, and a swarm of private equity and hedge funds.
In the belief that this must rally manufacturers to its side, the government confronted the banks by forcing interest rates down to an unprecedented real level of 2 per cent by the end of 2012. In São Paulo the Employers Federation briefly expressed its appreciation of the change, before hanging out flags in support of the anti-statist marchers of June 2013. Industrialists had been happy to reap high profits from the positive-sum period of growth under Lula, in which virtually every social group saw its position improve. But when this ended under Dilma, and strikes flared up, they were unmoved by the favours granted them. Not only were big companies in the real economy, like their counterparts in the North, themselves often long on financial holdings negatively affected by sharp pressure on rentier revenues, and for that reason not readily detachable from banks or funds, but as a social group most manufacturers formed part of an upper middle class much more numerous, vocal and politicised than the ranks of businessmen proper, with greater ideological and communication capacity in society at large. The rabid hostility of this stratum to the PT was inevitably shared by manufacturers too. Between bankers above and professionals below, each committed to bringing down a regime now threatening their common interests, producers lacked significant autonomy.
How damaging this has been for the PT can be seen in the fate of housing, where collective and individual needs most visibly intersect. With the consumer bubble came a much more dramatic real-estate bubble, in which vast fortunes were made by developers and construction firms, while the price of housing for the majority of those living in big cities soared, and about a tenth of the population lacked adequate dwellings. From 2005 to 2014, credit for real-estate speculation and construction increased twenty times over; in São Paulo and Rio prices per square metre quadrupled. In São Paulo, average rents increased 146 per cent in 2010 alone. In the same years there were six million vacant apartments, while seven million families were in need of decent housing. Rather than itself increasing the supply of popular housing, the government funded private contractors to build settlements at a handsome profit in exurban areas, charging rents typically beyond the reach of the poorest layer of the population, and stood by as local authorities launched evictions of those who occupied vacant lots. In face of all this, social movements have sprung up among the homeless, and are now the most important in Brazil: these movements are not around, but against the PT.
Lacking any popular counter-force to withstand concerted pressure from the country’s elites, Dilma no doubt hoped, after her narrow re-election, that by beating an economic retreat, with an initial belt-tightening like that of Lula’s first years in power, she could reproduce the same kind of upturn. But external conditions precluded any comparable outcome. The dance of the commodities has gone, and recovery, whenever it comes, is likely to be subdued. It can be argued that, viewed in context, the extent of current difficulties should not be exaggerated. The country is in a severe recession, with GDP falling 3.7 per cent last year, and probably much the same this year. On the other hand, unemployment has yet to reach the levels of France, let alone Spain. Inflation is lower than in Cardoso’s last years, and reserves higher. Public debt is half that of Italy, though given Brazilian interest rates, the cost of servicing it is far greater. The fiscal deficit is below the EU average. All these figures are likely to worsen. Still, so far the depth of the economic hole does not match the volume of ideological clamour about it: partisan opposition and neoliberal fixation have every interest in overstating the country’s plight. But that scarcely reduces the scale of the crisis in which the PT is now floundering, which is not just economic, but political.
There, the origins of its plight lie in the structure of the Brazilian constitution. Virtually everywhere in Latin America, presidencies inspired by the US coexist with parliaments modelled on Europe: that is, over-mighty executives on the one hand, legislatures elected by proportional representation of votes – not Anglo-Saxon first-past-the-post distortion of them – on the other. The typical, though not invariable, result is a presidency with sweeping administrative powers, whose weak undercarriage is a party lacking any majority in a parliament with significant legislative powers. Nowhere else, however, is the divarication between executive and legislative anything like as pronounced as in Brazil. This is, above all, because the country has far the weakest party system in the continent. In Brazil, proportional representation takes the form of an open list system, in which electors can choose any candidate from among a host of individuals nominally standing on the same ticket, in constituencies often with a million or more voters. The consequences of this configuration are two-fold. Overwhelmingly, voters pick a politician of whom they know – or think they know – something, rather than a party of which they know little or nothing, while politicians, for their part, need to raise huge sums of money to fund campaigns to secure voter identification with them. The great majority of parties, whose number has increased with every election (there are 28 in the current Congress), lack any political coherence, let alone discipline. Their purpose is simply to secure favours from the executive to line their own pockets, and to pass down a residuum to their constituents to secure re-election, in exchange for supplying their votes to the government in the chamber.
In this landscape, unlike in any other country in Latin America to emerge from military rule in the 1980s, no political parties of significance survived from the period before the dictatorship. Rather, the stage was initially occupied by two forces derived from constructs of the generals: their party of nominal opposition, the Brazilian Democratic Movement (MDB), and their party of government, the National Renewal Alliance (ARENA) – mocked at the time as the difference between muttering ‘sim’ and ‘sim, senhor’. The former eventually renamed itself the Brazilian Democratic Movement Party (PMDB), and most of the latter morphed into the Liberal Front Party (PFL). After the generals had withdrawn, the first stable government came with Cardoso’s presidency in 1994, born of a pact between a spin-off from the PMDB that he had helped create, the nominally social democratic, in fact social-liberal PSDB, whose electorate was in the industrialised south and south-east, and the nominally liberal, in fact conservative PFL, whose base lay in the retrograde north-east and north. This was a deal between moderate opponents and traditional ornaments of the dictatorship that assured the executive a consistently large majority in the legislature, in the service of what would become a neoliberal programme in line with the Washington consensus of the period. As a presidential candidate, Cardoso – regarded by capital as a guarantee against radicalisation – was drenched with money: the well-off knew their friend. The relative cost of his campaigns, in a much poorer country, exceeded Clinton’s in the United States. Running against him, Lula was drowned in a torrent of cash. But once in office Cardoso did not in general – though there would be a crucial exception – need money to buy support in Congress, where his coalition with the oligarchic clans of the north-east, while subject to standard jostling over prebends, was not simply one of convenience, but the coming together of natural partners around common objectives. The arrangement was stable, and has in recent years been much praised by Brazilian and Anglophone admirers of Cardoso as a model of ‘coalitional presidentialism’, touted as a hopeful example to much of the rest of the world, where European or American forms of government are unlikely to take root.
Still, although the coffers of Cardoso’s campaigns were ‘clean’ in the sense of American money politics, where Super PACs buy votes, and his coalition was ideologically unforced, once he was elected neither his objectives nor those of his allies could be achieved without reliance on other methods. Both his vice-president, Marco Maciel, and his most powerful ally in Congress, Antonio Carlos Magalhães, were linchpins of the repressive political order in the north-east – one installed as governor by the dictatorship in Pernambuco, the other in Bahía, after both had supported the destruction of democracy in 1964 – with no intention of altering traditional ways of running it. ACM, as he liked to be known, boasted: ‘I win elections with a bag of money in one hand and a whip in the other.’ His son Luis Eduardo was Cardoso’s favourite politician in Congress, the dauphin scheduled to succeed him, had he not died young. Cardoso himself, who had long maintained that reform of the party system was a priority for Brazil and promised to deliver it, decided as soon as he was in the presidential palace, the Planalto, that the real priority was to revise the constitution so he himself could be elected for a second term. Abandoning any attempt to rationalise or democratise the political order, he presided – here it did prove necessary – over straightforward bribing of deputies to purchase the super-majority in Congress required to ram the change through.
When Lula was finally elected in 2002, the PT was in a different position. Once he had given reassurances that he would not attack them, and looked as though he would probably win, Lula’s campaign too had been funded by banks and companies, if on nothing like the scale of his predecessor. But in Congress he had no natural allies of any significance. The PT, for all the moderation of Lula’s pitch for the presidency, was regarded by others – and still regarded itself – as a radical party, well to the left of the marshlands composing the overwhelming mass of the legislature. There it had no more than a fifth of the deputies, on a vote less than a third of Lula’s own. How was it to secure any kind of working majority to support him from this marais? The traditional method, practised on a heroic scale by the first president after the dictatorship, José Sarney, another former servitor of the generals, was to buy support by handing out ministries and sinecures to whoever was keenest and could deliver the largest number of votes in exchange – in the first instance, competing factions in what was formally his own party, the catch-all PMDB, the largest and most characterless political entity in the country, which a decade later had become the sump into which every rivulet of political corruption drained. The classic course for the PT would have been to cut a deal with this creature, by allocating it a major share of cabinet posts and state agencies. That solution the party – there is dispute as to who in its high command was for and who against it – rejected, fearing its consequence would be such an ideological dead-weight within the government that progressive momentum of any kind would be neutered. Instead, the decision was made to stitch together a patchwork of backers out of the dense array of smaller parties, without conceding them much foothold in the government, but paying them cash for their support in the chamber by way of a solatium. In effect, the PT attempted to compensate for its lack of the kinds of partner with whom Cardoso had enjoyed a natural connubium, and its refusal of the kind of spoils system Sarney had operated, by dispensing a set of material inducements to co-operation at a lower level, and in lesser coinage: monthly wads of money in lieu of major offices of state.
What changed this were three after-effects of the mensalão. Plea bargaining – the Portuguese term delação premiada is less euphemistic: ‘rewarding for delation’ – was introduced in Brazil; indefinite preventive imprisonment, prisão cautelar, long a judicial power used to cram the country’s jails with its underclass, became for the first time an acceptable instrument for breaking those above that level; and sentences in a first court of appeal could no longer be deferred pending confirmation by a higher court, making the route to incarceration much faster. The first two were the weapons that allowed Italian magistrates to lay siege to the political and industrial class in the Tangentopoli scandals of the 1990s. The third they never acquired. In Brazil, a further means of extracting confessions from those under pre-emptive lock and key was devised: threats to extend the same treatment to their wives and children. In 2013 wiretaps on a currency exchange counter at a car-wash (lava jato) in Brasília led to the arrest of a black-marketeer with a long police record. Held in Curitiba, far to the south, to protect his family this doleiro began to reveal the scale of the system of corruption in Petrobras, in which he had been one of the key intermediaries for the transfer of funds between contractors, directors and politicians, inside and outside the country. In short order, charges were brought against nine top construction companies in Brazil, their famous bosses put under arrest, three senior directors of Petrobras jailed, and investigations opened against more than fifty politicians, members of Congress or state governors.
The three principal parties involved – they numbered seven in all – were the PMDB, the Progressive Party (a sprig of the dictatorship) and the PT. Which banked the most is still unclear. But since few had any illusions about the first two, it was the exposure of the third that mattered politically. The mensalão was petty cash by comparison with the enormity of the petrolão, and whereas the former had been of no private benefit to members of the PT, it was soon clear that the latter had erased the line between organisational funding and personal enrichment. Among other details, it emerged that Lula’s chief of staff José Dirceu, the real architect of the PT as a party, driven from office for his part in the mensalão, had thereafter insisted on a cut from the petrolãobeing paid into his own bank accounts. If the bulk of the kickbacks was used to finance the party’s campaigns and its apparatus, the continual sloshing about of huge sums of clandestine money could not but corrode those handling it. The sociologist Chico de Oliveira’s warning, made well before the petrolão came to light, that the PT was descending towards transmogrification into a taxonomically aberrant species of political life, could no longer be dismissed as a mere metaphor.
Leading the attack on the petrolão, the investigative team in Curitiba became, like the pool in Milan that inspired them, media stars overnight. Youthful, clean-cut and square-jawed, benefiting from wholesome training at Harvard, judge Sérgio Moro and prosecutor Deltan Dallagnol looked straight out of a courtroom drama on American television. Of their zeal to root out corruption, and the value of their shock to the business and political elites of the country, there could be no doubt. But as in Italy, aims and methods did not always coincide. Delation for gain, and indefinite incarceration without charge, combine inducement and intimidation: blunt instruments in the search for truth and pursuit of justice, but in Brazil within the law. Leakage of information, or mere suspicion, from investigations still supposedly secret to the press is not: it is clearly illegal. In Italy, it was regularly used by the Milan pool, and would be used even more widely by the pool in Curitiba. From the outset, the leaks looked selective: persistently targeting the PT, and persistently – though not exclusively: tidbits are distributed elsewhere – appearing in the most violent battering-ram of media assault on it, the weekly magazine Veja, which after weeks of exposés, in the last hours before polls opened in the presidential election of 2014, ran a cover story with the faces of Dilma and Lula looming out of a sinister half-light, lurid red and eerie black, over the exclamation ‘They Knew!’, alerting voters to the criminal masterminds of the petrolão.
The Lava Jato scandal broke in the spring of 2014, and successive arrests and charges kept it in the headlines through the presidential contest in the autumn. Dilma’s economic U-turn, once elected, may in part have been conducted in the hope of placating neoliberal opinion sufficiently for the media to moderate its depiction of the PT as a den of thieves. If so, it was in vain. Outflanking even the PSDB in the virulence of its attacks, a new right rocketed to prominence in the mass demonstrations against Dilma of March 2015. In Brazil the traditional slogans of the right were Family, God and Freedom, the banners of a conservatism that hailed the arrival of the military dictatorship in 1964. Half a century later, the rallying cries had changed. Recruited from a younger generation of middle-class activists, a new right – often proud to call itself such – spoke less of the deity, hardly at all of the family, and reinterpreted liberty. For this layer, the free market was the foundation of every other freedom, the state its hydra-headed enemy. Politics started, not in the institutions of a decaying order, but in the street and squares, where citizens could topple a regime of parasites and robbers. Surfing the mass demonstrations against Dilma, the two leading groups of this radical right – Vem Pra Rua and Movimento Brasil Livre – have modelled their tactics on the role on the radical left of Movimento Passe-Livre in sparking the protests of 2013, the second even deliberately echoing its acronym: for MPL read MBL. The organisations are small on both sides of the divide, each relying on mobilising larger numbers by intensive use of the internet. Brazilian has more addicts of Facebook than any other country after the United States, and Vem Pra Rua, the MBL and other networks on the right – Revoltados On-Line (ROL) is another prominent player – have, no doubt predictably given the class profile of Zuckerberg’s following, galvanised them into action with far more success than the left. To date, the multiplier effects of the new right have been much greater.
Beyond it lies the ambiguous nebula of new religion. More than a fifth of the population of Brazil are now converts to one variety or another of evangelical Protestantism. In the pattern of the Unification Church of the Reverend Moon, many – certainly the largest – of these are business rackets milking the faithful for money to erect financial empires for their founders. The fortune of Edir Macedo, head of the Universal Church of the Kingdom of God, whose huge kitsch Temple of Solomon in the Bras neighbourhood of São Paulo – just across from the scarcely less gross edifice of its rival the Assembleia de Deus, forming a kind of religious Wall Street – stages melodramatic exorcisms on a big screen before hushed or chanting believers in the dark, is reckoned at more than $1 billion. Along with it comes control of the country’s second largest television chain. Currently hegemonic in the field, Macedo’s organisation preaches a ‘theology of prosperity’, promising material success on earth rather than mere relief in heaven. Unlike American evangelicals, the Brazilian churches do not possess marked ideological profiles, other than on such issues as abortion or gay marriage. Macedo supported Cardoso as a bulwark against communism, later fell in behind Lula, and since then has created his own political organisation. But most of the churches operate much like the undergrowth of Brazilian parties: they are vehicles for hire, swapping votes for favours, with the difference that they will back candidates on any number of tickets – the evangelical caucus in Congress, some 18 per cent of the lower chamber, includes deputies from 22 parties. Its principal interests lie in securing licences for their radio and television stations, tax exemption for their businesses, and access to land for building pharaonic monuments to themselves.
At the same time, if more passively and promiscuously than their counterparts in the US, they form a conservative reservoir for aggressively right-wing leaders in Congress. There, symptomatically, the president of the Evangelical Front is a muscular pastor and former policeman who sits on the benches of the PSDB. There too, elected speaker of the house in February 2015 – the most powerful post in Congress, and the third office of state after president and vice-president – was Eduardo Cunha, an evangelical operator from Rio and leader of the PMDB bench. Widely identified as Dilma’s most dangerous enemy – she tried to block his election – Cunha’s sleek features and imperturbable manner conceal an exceptionally skilled and ruthless politician, a master of the black arts of parliamentary manipulation and management, on whom large numbers of the ‘lower clergy’ in Congress had become dependent for the economics of their arrival there, while others lived in fear of his retribution if they crossed him. No sooner had demonstrations in the streets called for Dilma’s impeachment than he became the spearhead of the drive in the legislature to oust her, on the pretext that prior to the election she had improperly transferred funds from the state banks to federal accounts.
Into this scene, a bombshell exploded. In mid-October the Swiss authorities notified the attorney-general in Brasília that Cunha held no fewer than four secret bank accounts in Switzerland – another soon came to light in the US – one held in the name of his wife, another in that of a shell company set up in Singapore, via yet another registered in New Zealand. Total value: $16 million, or 37 times his declared wealth in Brazil. At the disposal of the couple, held in the name of two local companies – defeating satire, one of them called Jesus.com – was a fleet of nine limousines and SUVs in Rio. Evidence that he had been extracting huge bribes from Petrobras piled up. Even for the most obedient press, this was too much. In Congress, a comedy of reversals ensued. Under the Brazilian constitution, the speaker of the house is vested with the sole power to bring a motion for impeachment of the president to the floor. For months the PSDB had been courting Cunha, conferring with him in intimate conclaves on the tactics and timing of the trial in view. The revelation of his treasure-chest in Switzerland, with evidence immensely more damning than any purported against Dilma, thus came as an acute embarrassment for the party. What was it to do? Cunha still held the keys to impeachment, which if successful would cancel the election of 2014, and ensure Neves victory in the rerun. The party therefore said as little as possible about the tidings from Bern, beyond observing that Cunha himself had not yet spoken and must be regarded as innocent until proved otherwise. But at that its backers in the media could not contain themselves: how could the party of morality act as a cover for such blatant criminality? In face of this revolt, the PSDB was forced to backtrack and sheepishly announce that it could not after all support the speaker – a small independent socialist party had by now lodged a case for his removal from Congress – any longer. On seeing the PSDB desert him, Cunha made a swift about-face. Negotiating behind closed doors, he offered to freeze Dilma’s impeachment if the PT would protect him from annulment of his mandate and expulsion from Congress. No sooner said than done. PT ministers, no less shameless than the PSDB, agreed to help him remain in place, provided he made no move against Dilma. This surreal merry-go-round was too much for the party outside Congress, and the deal had to be dropped. For a time, it looked as if Cunha’s position was unsustainable, and the cause of impeachment so damaged by his exposure that it had small chance of passing.
In the background, however, the prime repository of hopes of finishing off the PT had not desisted. Since the onset of the crisis, Cardoso had been omnipresent in the media – his image everywhere, in a torrent of interviews, articles, speeches, diaries. Long esteemed by press barons and their aides, his renewed prominence was the fruit of a more immediate political calculation on their part, and his. Presented as the elder statesman of the republic, to whose wisdom it owes what stability it has achieved, editors and journalists have competed to build him up as a thinker of international stature, the voice of sanity and responsibility in the country’s dire condition, with courtiers in the Anglophone press and academy swelling the chorus of sycophancy. The rationale for this apotheosis is straightforward enough: Cardoso’s presidency administered Brazil its one firm dose of market-friendly management, the medicine it requires more urgently than ever, after the debauches of PT populism. Cardoso himself, who in office lamented that it was ‘an immense difficulty’ that ‘Brazil doesn’t like the capitalist system’, has no quarrel with that. But he has a more personal stake in the floodlights surrounding him. When he left office, his ratings were not much higher than Dilma’s today, and for eight years he suffered comparison with Lula, a far more popular president who repudiated his legacy and changed the country decisively, assuring the PT a mandate twice the length he had enjoyed.
This was a bitter cup to swallow. Could the aura of a thinker make up for loss of of prestige as a ruler? Objectively, the second role had – this is normal enough – come at the expense of the first. In pursuit of office Cardoso had sacrificed not only his early convictions, which were Marxist and socialist, but over time his intellectual standards. The banality of his later output – bromides in praise of globalisation and anxiety at its side-effects – is dispiriting. On rare occasions, he perhaps glimpses this himself: ‘I must admit that, though my intellectual bent is strong, I am basically a homo politicus,’ he once let slip. But subjectively, vanity – stung by the greater political appeal of a worker with no education – does not allow more cerebral pretensions to be set aside. Clad in the green and gold of the Brazilian Academy, a tropical copy of the pompous French original, sword in its scabbard at his side, he declared a while ago that the sociologist and the president had never diverged in the course of a coherent career and a creative administration, entirely in keeping with each other.
That confidence, born of close connections with senior judges, was unlikely to be misplaced. Due to preside over the case against Dilma on the Supreme Electoral Tribunal was Gilmar Mendes, a crony Cardoso had appointed to the Supreme Court, where he still sits, and who has never made a secret of his dislike of the PT. But Dilma was lesser prey. For Cardoso, the crucial target for destruction was Lula, not simply for reasons of revenge, however much this might be savoured in private, but because there was no telling, given his past popularity, whether he might be capable of a political comeback in 2018 – when, if Dilma survived till then, the PSDB should otherwise be able to count on steering the country back to a responsible modernity. No sooner were Cardoso’s hints dropped than a steady drip of leaks from the Lava Jato pool started to appear in the press implicating Lula in dubious financial transactions of a personal kind: trips abroad in corporate jets, speeches remunerated by construction companies, deposits on costly beachfront quarters, refurbishments of a rural retreat, not to speak of obscure earnings by one of his sons. Next came the arrest of a millionaire rancher friend, charged with passing the kickback on a Petrobras contract to the treasury of the PT. To all appearances, the net was closing in on him.
Promptly, in the first week of March, a squad of federal police arrived at Lula’s door at six o’clock in the morning and took him into custody for interrogation at São Paulo airport. The press, informed beforehand, was waiting outside to swarm forward with its cameras, for maximum publicity. The pretext for the show was that if simply asked for testimony, he might have absconded. The following week the largest demonstrations in Brazil since the dictatorship – according to the police, 3.7 million strong – clamoured for justice against him, and impeachment for Dilma. Three days later, Dilma appointed Lula chefe da casa civil – equivalent to prime minister – in her government. As a minister, Lula would enjoy immunity from charges at Moro’s level in Curitiba, becoming subject, like all other members of the government and of Congress, only to the Supreme Court. Moro wasted no time. That afternoon, he published wiretaps of a phone conversation between Dilma and Lula, in which she told him that she could send him the paperwork requiring his signature for the appointment, ‘if necessary’. Her phrasing was ambiguous. But the media uproar was deafening: here, caught red-handed, was a manoeuvre to thwart justice by whisking Lula out of reach of the law. Within 24 hours, a judge in Brasília blocked the nomination, one who, it soon emerged, had posted images of himself prancing on demonstrations demanding impeachment, clad in a PSDB T-shirt. But he was swiftly backed by Mendes, and within a fortnight the PMDB announced it was leaving the government, in which it held the vice-presidency and six ministries, paving the way for a rapid eviction of Dilma by Congress.
In this dramatic escalation of the political crisis, the central player was the judiciary. The notion that Moro’s operation was acting impartially in Curitiba, initially defensible, stood ruined with the gratuitous, media-orchestrated theatre of his dawn raid at Lula’s home, followed by a public message saluting the demonstrations demanding Dilma’s impeachment: ‘Brazil is in the streets,’ he announced. ‘I am touched.’ In then publishing wiretaps of a phone call between Lula and Dilma, hours after the bugging was supposed to have been halted, he broke the law twice over: violating the seal covering such interceptions, even when permitted, not to speak of the confidentiality supposedly protecting the communications of the head of state. So patent were these illegalities that they brought down a lukewarm rebuke from the judge on the Supreme Court to whom Moro is formally responsible, but no sanction. Though ‘inappropriate’, his superior mildly noted, his action had achieved the desired effect.
In most contemporary democracies, the separation of powers is a polite fiction, supreme courts in general – the American is an intermittent exception – bending to the will of the governments of the day. The contortions of the German Constitutional Court – often held to be a luminous example of judicial independence – in upholding violations of both the country’s Grundgesetz and the Treaty of Maastricht at the behest of successive regimes in Berlin, can be taken as a norm. In Brazil, the politicisation of the higher judiciary is a long tradition. The Ubuesque figure of Gilmar Mendes is perhaps an extreme case, if a revealing one. As president, Cardoso shielded his friend from legal charges by giving him ministerial status – Mendes now excoriates Dilma for doing this with Lula – before elevating him to the Supreme Court. There, to avoid unwelcome attention, Cardoso would slip into the building by the underground garage to confer with him. Too blatant a partisan of the PSDB – tucano demais, ‘too much of a toucan’; the bird is the party symbol – for even Eliane Cantanhêde, an admiring interviewer of the right, he could be seen lunching convivially with prominent party leaders after acquitting them of misdeeds, and did not hesitate to employ public funds to enrol subordinates in a private law school he ran, for profit, while sitting as a judge in the highest tribunal of the nation. His fulminations against the PT are legion.
The danger of a judiciary actuated in this spirit is the same in Brazil as it was in Italy: an absolutely necessary campaign against corruption becomes so infected with disregard for due process, and unscrupulous collusion with the media, that rather than instilling any new ethic of legality, it ends by confirming long-standing social disrespect for the law. Berlusconi and his heir are the living proof of that. The scene in Brazil differs from the situation in Italy, however, in two respects. No Berlusconi or Renzi is in sight. Moro, whose celebrity now exceeds that of any of his Italian role-models, will no doubt be solicited to fill the political vacuum, should Lava Jato make a clean sweep of the old order. But the mediocre destiny of Antonio Di Pietro, the most popular of the Milan magistrates, stands as a warning to Moro, anyway more genuinely puritan in outlook, against the temptation to enter politics. The space for a meteoric ascent is also likely to be smaller, because of a further critical difference between the two crusades against corruption. The assault on Tangentopoli struck the traditional rulers of the country, Christian Democracy and the Socialist Party, who had been in power together for thirty years, whereas Lava Jato has taken political aim, not at the country’s traditional rulers, whom it has – hitherto – largely spared, but at the upstarts who displaced them. It looks much more one-sided, and so divisive.
The division has been enormously accentuated by a second difference between the Italy of the early 1990s and Brazil today. When Tangentopoli hit the political system, the Italian media formed a heterogeneous landscape. Independent newspapers tended to back the judiciary in Milan across the board. The press conglomerate of the Olivetti boss De Benedetti, where most of the leaks appeared, trumpeted the charges against Christian Democrats and Socialists, while keeping as quiet as it could about others implicating its owner. Berlusconi’s television and press empire let fly at the magistrates. The result was that, as time went on, there was far more questioning of the actions of the different rungs of judiciary – many very courageous, others very dubious – than in Brazil. There, the media have been monolithically partisan in their hostility to the PT, and uncritical of the strategy of leaks and pressures from Curitiba, of which they have acted as the boombox. Brazil boasts some of the finest columnists in the world, whose writing has analysed the current crisis at a literary and intellectual level far above the scrublands of the Guardian or New York Times. But such voices are vastly outnumbered by a forest of conformists echoing the outlook of owners and editors.
To compare the coverage in the media of any leak or revelation damaging the PT with treatment of information or rumour affecting the opposition is to measure the extent of its double standards. As Lava Jato was unfolding, there flickered for a moment alongside it a poignant example. In 1989, in one of the most famous turning-points of modern Brazilian history, Lula – then still a dangerous radical in the eyes of the establishment – was within reach of victory in his initial run for the presidency, when a few days before the decisive vote, a former girlfriend appeared on a television broadcast for his opponent Collor, paid by Collor’s brother to do so, accusing Lula of wanting to have a child she had by him aborted. The sensation, magnified to the limit in the media, clinched his defeat on polling day. Two years later Cardoso – then a prominent PSDB senator, already tipped as a future presidential candidate – was known in political circles to have a mistress working for the same television chain, TV Globo, that ruined Lula. When she gave birth to a child, she was spirited out of the country to Portugal. By mid-1994, after serving as finance minister, Cardoso was running for the presidency, and her work became increasingly nominal, though Globo continued to cover her salary. Once he was elected, his right-hand man, the younger Magalhães, instructed her not to return to Brazil for fear of compromising his re-election. When Globo cut her salary, a fictional job was found for her, doing market research in Europe for a duty-free chain granted monopoly rights in Brazilian airports by Cardoso. Through this firm, her account would imply, he had laundered $100,000 – child support or hush money? – to her via one of its accounts in the Cayman Islands. The story broke in February, in the midst of the media tornado around Lula’s housing arrangements. The media made sure it received the least possible coverage. The firm is now under investigation for a criminal transaction. Cardoso protests his innocence. No one expects him to suffer any inconvenience.
What are Dilma’s chances of resisting this outcome, and the prospects if it were frustrated? The hopes of the Planalto rest on two contingencies: that enough support can be found in Congress to block impeachment by offering enough ministries, and the jobs that go with them, to nano-parties normally in no position to seek them, to offset votes lost to the defection of the PMDB; and that enough counter-demonstrations can be mobilised outside Congress to offset the predictably huge demonstrations in favour of impeachment. Both purposes require the return of Lula to Brasilia, where – still denied the right to occupy formal office under Dilma – he can informally tackle the tasks, at which he was once gifted, of coaxing reluctant deputies into the government camp and rousing popular backing for it in the streets. But times have changed, and at present each looks a long shot. Relations between Lula and Dilma herself have frayed since she chose austerity after her re-election. Blaming her for a lack of political skills and refusal to take advice, Lula would remark in private: ‘She was my chief of staff, and she still acts like one, not like a president,’ or, ‘She is like my daughter, who always tells me how much she loves her father, and never pays the slightest attention to what I say.’ But it is doubtful how much difference any tactical flexibility, however adroit, would have made to the difficulties she has faced. From the beginning, her second presidency was caught in a vicious circle of unfolding scandals and deteriorating economic indicators, whose interaction hobbled any easy recovery of authority. The Petrobras complex, posting huge write-downs, has laid off workers in their thousands; likewise the construction companies whose bosses languish in jail. Uncertainty where the next blow of Lava Jato will fall has kept investors at home, and financial markets on edge: in November, the billionaire head of BTG-Pactual, the continent’s biggest investment bank, the toast of the Financial Times and Economist, was taken away in handcuffs. In Congress, the neoliberal spending cuts and tax increases proposed by the government were thwarted by the neoliberal PSDB to embarrass it: a budget for 2016 has yet to be passed. Even if virtuoso footwork in the corridors of power achieved a temporary check to impeachment, it would do little to alter the underlying impasse of the government.
Popular mobilisation to stop the ouster of Dilma in its tracks would be another matter. But that is fettered by the legacy of PT rule. The party is in a weak position to call on its beneficiaries to defend it, for at least three reasons. The first is simply that, if corruption lost it the middle-class sympathy it once enjoyed, austerity has alienated the much larger lower-class base it acquired. The demonstrations it has so far been able to mount against impeachment have been much less imposing than those calling for it. Marchers have been mustered mainly from public sector workers and unions: the poor are conspicuous by their absence. The PT’s rural bailiwicks in the north-east are anyway socially dispersed, as the big cities of the centre-south that are the strongholds of the new right are not. Then there has been the inevitable demoralisation as successive scandals have engulfed the party, a diffuse sense of guilt, however suppressed, weakening any fighting spirit. Lastly, and fundamentally, by the time Lula won power the party had become essentially an electoral machine, financed overwhelmingly by corporate donations rather than – as at the beginning – by members’ dues, contenting itself with passive adhesion to the name of its leader, lacking any will to foster collective action among its voters. The active mobilisation that brought it into being in the manufacturing centres of Brazil became a distant memory as the party gained support in zones of the country and layers of the population untouched by industry, with deep-rooted traditions of submission to authority and fear of disorder. This was a political culture Lula understood, and did not seriously attempt to unsettle. In his vision of things, the potential cost was too high. To help the masses, he sought harmony with the elites, for whom any vigorous polarisation was taboo. In 2002 he finally won the presidency, at his fourth attempt, on a slogan of ‘peace and love’. In 2016, faced with political lynching, he was still uttering the same two words to crowds expecting something more combative.
Such discordance between attack and response is the mark of a pattern that, since the turn of the century, has distinguished Brazilian politics within Latin America. It is not the only country that has seen class conflict escalating in a crisis. But nowhere else has this been so one-sided. Even when Lula was at the peak of his prestige as a ruler, there was always an asymmetry between the moderate and accommodating policies of the PT, and the hostility of an enragé middle class and media against it. Over the past eighteen months, the expressions of that unilateral abhorrence have become ever more violent. A municipal counsellor of the PMDB in the interior of São Paulo could publicly call for Lula to be killed like a viper crushed underfoot. In Rio Grande do Sul, to the south, a paediatrician refused to attend a one-year-old because the mother was a petista, and was cleared of any wrongdoing by the Regional Council of Medicine and Association of Doctors. The judge on the Supreme Court responsible for issuing the mild reproof to Moro was rewarded with banners outside his apartment denouncing him as a ‘Traitor’ and ‘Stooge of the PT’, while demonstrators struck up their signature song, ‘Capitalism is Here to Stay’. As D-Day for impeachment approaches, zealots have been supplied with the addresses of deputies thought recalcitrant, fanning out across the country to intimidate them by camping outside their homes. Meticulously, the stock market has kept pace: soaring when Lula was taken into custody, dropping when he was made chief of staff, rising again when his appointment was blocked.
Politically, too, stability would scarcely be guaranteed. One obvious question is whether the shock of impeachment would so cow the forces that now support Dilma that little fight is left in them, or on the contrary provoke fiercer resistance to the country’s establishment than in the past. All isn’t likely to be easy in the ranks of the victors – if they prove such. A judge on the Supreme Court has ordered Cunha to hear a case for the impeachment of Temer too, on the same grounds as Dilma, since when she was out of the country he signed off on the kinds of transfer held against her – a shot across the bows of her pursuers, who hope to install him as president within a fortnight. Should this blow be parried, another potentially awkward problem lies down the road. Still pending before the Supreme Electoral Tribunal is a joint charge against Dilma and Temer, brought by the PSDB when it hoped to scoop the pool by forcing new elections quickly, that their ticket in 2014 violated campaign regulations. If upheld, it would cashier both of them. The suit cannot be withdrawn, and will be an embarrassment if the impeachment of Dilma passes and Temer sits in the Planalto. But since Mendes becomes president of the tribunal in May, Brazilian justice can probably be trusted to finesse the difficulty. A larger question mark, of course, is what subsequent impact Lava Jato could have on the impeachers themselves. Accelerating the drama of impeachment has served to deflect public attention from the tables of Odebrecht. But can the tables be erased from public consciousness thereafter? In their columns a whole political class is at stake. Could Brazilian justice finesse its difficulties too: in the interests, it goes without saying, of national reconciliation?
That the Workers’ Party has rejoined, by a mutation of its own, the deformed ranks of the rest of Brazilian political fauna – the PMDB, PSDB, PP and their ilk – is past denial. By now two presidents of the party, two treasurers, a president and vice-president of the lower house, and the leader of the party in the upper house, have all found themselves in jail, sunk in a quicksand of corruption that knows no political borders. Emblematically, the latest of its notables to fall, and the most voluble in delation, Senator Delcídio do Amaral, is a transfuge from the PSDB, where he was a stalwart of Cardoso’s party in the machinery of Petrobras. Half or more of the members of Congress are on the pay-roll of construction companies, whose donations finance their election. The degradation of the political system has become so patent that last autumn the Supreme Court – itself far from any areopagus of impartial integrity – finally ruled that corporate funding of electoral campaigns is unconstitutional, and banned company donations outright. Congress immediately reacted with constitutional amendments to reinstate them, whose issue is in baulk. If confirmed, and not circumvented, the decision will amount to a revolution in the workings of Brazilian democracy: the one unequivocally positive outcome of the crisis to date.
The Workers’ Party believed, after a time, that it could use the established order in Brazil to benefit the poor, without harm – indeed with help – to the rich. It did benefit the poor, as it set out to do. But once it accepted the price of entry into a diseased political system, the door closed behind it. The party itself withered, becoming an enclave in the state, without self-awareness or strategic direction, so blind that it ostracised André Singer, its best thinker, for a mess of spin-doctors and pollsters, so insensible it took lucre, wherever it came from, as the condition of power. Its achievements will remain. Whether the party will itself do so is an open question. In South America, a cycle is coming to an end. For a decade and a half, relieved of attention by the US, buoyed by the commodities boom, and drawing on deep reserves of popular tradition, the continent was the only part of the world where rebellious social movements coexisted with heterodox governments. In the wake of 2008, there are now plenty of the former elsewhere. But none so far of the latter. A global exception is closing, with no relay yet in sight.
London Review of Books (Vol. 38 n. 8, 21 April 2016, pages 15-22)
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