Ueslei Marcelino / REUTERS Former Brazilian President Luiz Inacio Lula da Silva is seen during the inauguration of the new National Directory of the Workers' Party in Brasilia, July 2017.

After Lula's Corruption Conviction

Where Brazil Goes From Here

The anticorruption juggernaut that has convulsed Brazil’s graft-ridden political system since 2014 rolled on to new heights this week. Federal judge Sergio Moro sentenced former President Luiz Inácio Lula da Silva (known as Lula) to nearly 10 years’ imprisonment for illicit enrichment. At the same time, charges of corruption leveled by General Prosecutor Rodrigo Janot could topple the current president, Michel Temer, whose party engineered the impeachment of then President Dilma Rousseff last year, unleashing the current political crisis.

This is a dramatic moment for democratic rule in Brazil, which boasts a population of 205 million and the world’s eighth-largest economy. The turmoil will probably last until Brazil’s next presidential election, in November 2018. This election will be the test of whether Brazilian civil society has acquired real antibodies to fight political corruption.

OPERATION CAR WASH CONTINUES

Temer narrowly escaped indictment by the federal electoral court last month on the same charges of falsifying budget deficits that led to Rousseff’s impeachment. He was absolved after packing the court with two new justices who voted for his acquittal alongside Gilmar Mendes, the court’s president, who is also a member of the Supreme Court. Now Temer is applying similar tactics in the chamber of deputies the lower house of Brazil’s Congress, substituting friendly deputies for ones who don’t agree to vote for him, to obstruct any prosecution by the Supreme Court. Brazil’s judicial rules provide the sitting president with legal immunity, which requires a two-thirds congressional majority to override.

In a similar way, by virtue of Brazil’s judicial code, Lula’s conviction can’t put him in jail until a higher court of appeals confirms the initial decision. In Lula’s case, that higher court will be the three-member Federal Appeals Court for the Southern District, in Porto Alegre, which supervises Moro’s region. Lula has continued to deny the charges against him in the face of well-documented accusations by former associates in his Workers’ Party (PT) and wealthy tycoons who claim to have provided him with personal financing. Because of disclosures during the Lava Jato, or Car Wash, scandal (as the anticorruption case has come to be known), Lula is no longer a sure winner of the appeal, and the PT is in disarray.

Claiming a new lease on political life, Temer said last week that he would devote the remaining 18 months of his presidential term to the “pacification” of Brazil’s polarized political condition. To do so, Temer would need to hold together his Brazilian Democratic Movement (PMDB) Party’s coalition in Congress, which he led against Rousseff in the impeachment process. Maintaining this majority is also essential for Temer to continue efforts to recover economic growth and reduce record unemployment by stimulating private investment. Temer’s economic team has put a lid on public spending and brought down inflation, but recovery depends on unpopular social security and labor law reforms pending in the legislature which would reduce taxes and stimulate private investment.

Until then, the Car Wash investigation will continue to provide evidence of enormous collusion between corrupt politicians and business tycoons, with the latter paying the former millions of dollars in kickbacks to buy public contracts, access to cheap credit, and regulatory favors. The payoffs in this scheme also financed political campaigns for a political alliance of eight parties led by the PT. Contrary to some partisan propaganda, Car Wash is not a political witch hunt against the PT and its populist allies. Political corruption is pervasive in Brazil, and prosecutors have also brought powerful charges against Senator Aécio Neves, until recently president of the Social Democratic Party (PDSB), the main anti-PT party.

THE NEXT ELECTION

The direct election next year will provide Brazil’s 145 million eligible voters—by far the largest electorate in Latin America—the opportunity for a political housecleaning. 

The uncertainties are enormous, but Brazil is neither institutionally paralyzed nor careening toward some unforeseeable political future. Some political figures have already declared their intent to run, and polls show some public preferences. Notable among the potential candidates is Lula himself, who left the presidency in 2011 with a popularity level of 70 percent. Current polls by reputable public opinion analysts show he was still the favorite candidate for 30 percent of the voters before his conviction, but the percentage of voters who say they will never vote for him again stands at 45 percent. Temer’s incumbency as president would make him a possible candidate for a second term, but at age 76, he has declared repeatedly that he will not seek reelection. Moreover, his PMDB party has been battered by Operation Car Wash, leaving it no powerful national presidential candidate.

The PDSB have a leading figure in Geraldo Alckmin, the three-time governor of Sao Paulo—Brazil’s most economically powerful state, with 40 million voters, the majority of whom have consistently voted against the PT. Although Alckmin is not a charismatic leader, he is a reliable moderate who has consistently championed centrist policies and—most important—has not become personally tainted by corruption. To win in 2018, the PSDB will have to overcome internal splits and form alliances with center-left parties such as the Socialists, who govern in coalition with the PSDB in some states.

Finally, many commentators expect newcomers to appear in the run-up to the presidential election. Younger sectors of the urban electorate are organizing social movements that promote causes like affirmative action, free education, expanded public health services, and environmental protection (the last of which is supported by Brazil’s native Indian populations). One possible candidate that has emerged for a new electorate is Joaquim Barbosa, an eminent jurist and former chief justice of the Supreme Court who grew up as the son of a construction worker who helped build Brasilia, the inland capital, which was constructed in the 1950s. After studying in France and Germany, Barbosa went on to become a law professor and prosecutor. Notably, he is an Afro-Brazilian in a racially mixed society that has lingering problems of racial discrimination, which could reduce support from a minority of voters. Barbosa’s story of working his way up from poverty to success is much the same as Lula’s, but with the difference that Barbosa, who presided over the trials that sent PT leaders to jail for corrupting members of Congress, is highly educated and completely free of charges of misconduct. 

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