Paulo Whitaker / Reuters Demonstrators attend a protest calling for the impeachment of Brazil's President Dilma Rousseff at Paulista Avenue in Sao Paulo, Brazil, December 13, 2015. 

Brazil's Pocket Linings Playbook

How the Petrobras Scandal Shows the Country's Strength, Not Weakness

The future of Brazilian politics has rarely looked less promising. Former President Luiz Inácio Lula da Silva, who was once praised for delivering the socioeconomic miracle that made Brazil the envy of the developing world, now finds himself at the center of a multibillion-dollar corruption scandal. Brazil’s state-owned oil conglomerate, Petrobras, is accused of giving out overpriced drilling contracts to construction and engineering firms. The subsequent investigation has implicated Brazil’s top politicians and economic elites, including both Lula and his successor, current Brazilian President Dilma Rousseff. The scandal, critics say, could go as far as ending democracy in the country. All sides have called for a popular uprising against the nation’s elites.

The turmoil aside, the Petrobras scandal has provided Brazil with a rare opportunity to audit its government. The 1988 constitution established Brazil’s modern democratic structures and was designed to create a representative political system with no place for the endemic corruption that defined Brazilian politics in the past. Twenty-eight years later, however, Brazil still faces cronyism, political elitism, and a lack of accountability. But now there are reasons to believe that the government may finally listen to the will of the people and do something real to address its problems.

NOT THEIR FIRST RODEO

Although the Petrobras scandal seems unprecedented, neither Rousseff nor Lula is the first Brazilian president to face corruption allegations. Indeed, Fernando Collor de Mello, Brazil’s first democratically elected president during the nation’s post-dictatorship era, was impeached for corruption in 1992. But after Collor left office, Brazil’s economy stabilized under President Fernando Henrique Cardoso and the country achieved impressive social development under Lula, Cardoso’s successor.

Notwithstanding Brazil’s economic evolution, its politics haven’t changed. Political disorganization and widespread party patronage have plagued the system for 28 years. The 1988 constitution mandates proportional representation in the National Congress, for example, which has partially resulted in more than 30 political parties vying for power through shaky coalitions. Leadership positions are likewise distributed across multiple parties, and executive cabinets have included as many as 39 formal ministries in order to distribute enough power to gain the support of the potential coalition members. When it comes to elections, the crowded electoral field pushes politicians to win support through illegal channels and kickbacks, a practice that is one of the pillars of the current Petrobras scandal, called Lava Jato.

In another example, the Mensalão scandal revealed as early as 2005 that Lulas’ party, Partido dos Trabalhadores (PT), paid congressional deputies to vote along party lines. When court sentences came out in 2012, a number of powerful political figures, including Lula’s chief of staff and PT’s president, José Dirceu, were sent to jail. Considering the developmental miracle Lula had performed in the country, it became close to impossible to convince anyone that he had anything to do with the scandal. In the meantime, Lula did manage to convince Brazilians that Rousseff should become the next president, based ironically on the managerial skills she demonstrated during her tenure as chair of the Petrobras board of directors. By early 2013, citizens took to the streets, demanding representation and transparency. Now, Rousseff also faces demands for her impeachment, growing popular protests, economic disintegration, and political chaos as representatives of virtually every political party come under investigation.

GETTING BETTER

Despite this crisis of confidence, Brazil’s institutional foundations remain intact. In fact, the Brazilian military has declined to take control of the government, as it would have in generations past. The judiciary has continued to rule against dominant political elites, demonstrating the kind of autonomy that should be expected in a functioning democracy. And Congress has even discussed political and fiscal reforms—which would have been unheard-of in years past. If Brazil continues to flex its institutional muscles, it may create enough momentum for real reforms.

A demonstrator holds a sign during a protest against Brazil's President Dilma Rousseff at Paulista avenue in Sao Paulo April 12, 2015.

A demonstrator holds a sign during a protest against Brazil's President Dilma Rousseff at Paulista avenue in Sao Paulo April 12, 2015. 

For example, after Brazilians took to the streets, politicians almost immediately became more attendant to what citizens had to say. Members of Congress have proposed bills that addressed the demands of the population, such as social security reforms, electoral rule reforms, and the introduction of a semiparliamentary system for the Brazilian Congress. Although few of the efforts have borne fruit, they have shown that Congress realizes it no longer governs solely through political bargaining.

Further, despite the PT’s claims to the contrary, Rousseff’s impeachment process has been conducted exactly according to congressional rules. The governing coalition and its supporters, which include celebrities, academics, and social movement leaders, have claimed that the impeachment process is an attempt by the opposition to overtake the Brazilian government, but the groundswell effort that led to congressional debate over the issue tells a different story. It took almost a full year before Congress decided to open a formal commission on impeachment in order to gauge public support, and the Brazilian Bar Association has declared the process legitimate.

Finally, the Petrobras scandal has demonstrated the state’s potential to tackle its own corruption. The federal judge in charge of the investigations, Sérgio Moro, has given credibility to the federal police and the Brazilian judicial system by demonstrating that it is possible to fight the ruling elites using existing institutional mechanisms in an autonomous manner. And one of the strongest signs of a functioning democracy is its ability to tackle corruption from within.

Brazil is facing a dark moment in its history, but nothing indicates that the country will implode as a result. The Petrobras scandal could have led to a military junta, a revolution, or any number of other politically disastrous outcomes in years past. But now, Brazilians have decided to fight back. Best of all, Brazil has found support in its elected officials and government institutions. The fight against corruption will certainly be arduous and casualties will be inevitable, but there are reasons for Brazilians to be hopeful about their country’s future.

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