Pride and prejudice: The Workers’ Party and the fight against corruption in Brazil

The adversarial nature of the massive corruption investigations taking place in Brazil has led the Workers’ Party (PT) to call foul. But given the long list of shady dealings and outright crimes associated with the party, can their claims of persecution be taken seriously?

Partisans behaving badly

One day in 2005, a Workers’ Party (PT) functionary was arrested after trying to board a flight from São Paulo to Fortaleza with 100,000 US dollars in cash in his underpants (and another 200,000 reais in his suitcase). José Adalberto Vieira da Silva was allegedly transporting a bribe for his boss, Ceará state deputy José Nobre Guimarães, the brother of the PT’s president at the time, José Genoino. While Genoino resigned as a result of the incident, Guimarães is still active in politics. They could never prove that the money was a bribe for him; Vieira da Silva claimed that the money was from selling vegetables from his farm while Guimarães stated he knew nothing about it. He was later accused of accepting 250,000 reais in the Mensalão (an elaborate scheme in which monthly payments were made to congressmen in exchange for votes) and is now a senior member of congress under President Dilma Rousseff.

The “underwear affair” was merely the most memorable among many instances of wrongdoing by members of the PT and its allies. The Mensalão scandal saw 25 prominent politicians and executives convicted of crimes. These include the most influential and powerful politicians in the PT.  Indeed, the scheme was operated by Lula’s chief of staff, José Dirceu. He was sentenced to 10 years in prison. Other convicted figures include the party’s former president, José Genoino, and Henrique Pizzolato, an ex-director of the Brazilian state-run bank Banco do Brasil, who fled to Italy using his dead brother’s passport to avoid going to jail (he was eventually caught and extradited back to Brazil).

Since the Mensalão was discovered over 10 years ago, people have been writing articles about widespread corruption in the PT and wondering how long it would take for the scandals to reach former president and party founder Luiz Inacio Lula da Silva. We can finally answer that question: He managed to stay untouched, declaring that “there is no more honest soul than me,” until last week.

Lula: The most popular politician in the world

Lula rose to prominence as a union leader during Brazil’s military dictatorship. After the reinstatement of democracy, he founded the Workers’ Party and ran for president four times before finally being elected in 2002, on a platform that he would advocate for the common man and fight the widespread corruption by the political establishment.

His two terms as president occurred during a boom in commodities prices, which provided Brazil with robust economic growth. He also broadened the reach of social programs to help lift Brazilians out of poverty and spent much of his time traveling in order to raise Brazil’s profile abroad. As a result of all of these factors, he was wildly popular, both at home and overseas. At a meeting of the UN General Assembly, Barack Obama greeted Lula as “my man right there…the most popular politician on earth!”

The Mensalão tarnished Lula’s administration, but he managed to escape with his reputation relatively unscathed. Despite the fact that many of the most senior officials in his administration were caught up in it, he claimed to know nothing about it and referred to it as a “betrayal.” Although his popularity has diminished somewhat of late, he remains a beloved figure in Brazil.

What goes around comes around

The trouble for Lula started earlier this month when, as part of the massive corruption investigation known as Operation Car Wash, an important advisor to his most recent presidential campaign, João Santana, was arrested. He is accused of receiving $7.5 million dollars in offshore accounts. The money is thought to have come from corruption at state-owned oil company Petrobras, which is the main focus of the Car Wash investigation.

In this corruption scheme, known as the Petrolão, large construction companies formed a cartel to create inflated contracts Petrobras, then skimming from these contracts to pay in bribes and kick-backs to politicians and businessmen. It is estimated that 2 billion dollars were stolen in this way.

Notably, Santana also advised Dilma’s presidential campaigns, as well as those of Venezuela’s Hugo Chavez and Nicolas Maduro and Peru’s Ollanta Humala, who has himself been accused of receiving bribes from one of the Brazilian construction companies involved in the Petrolão.

Last Friday, Lula himself became a target of Car Wash and was taken in for questioning by the police. The allegations against him are many: He is thought to have been the main decision maker behind the Petrolão and to have received bribes from the involved construction companies in the form of undeclared real estate holdings and favors. In addition, his foundation is thought to have been used to launder money from bribes and influence peddling, and dirty money is thought to have illegally enriched the PT’s coffers and funded their campaigns.

Investigators are specifically looking into the foundation known as the Lula Institute, which is thought to have laundered millions of reais through donations and fees for speaking engagements. News that the Lula Institute’s headquarters would be raided by police were leaked in advance; when the police arrived, they found that documents and computers had been removed from the premises.

With regard to undeclared real estate holdings, investigators are looking into a country estate suspected to be owned by Lula’s family. This property was renovated at great cost by the construction company OAS, which is also being investigated by Car Wash, and has its own cellular tower, a “gift” from telecom provider Oi. The family has visited the property more than 100 times since 2012 and sent 200 boxes of their belongings at the end of Lula’s presidency. When the police raided the property, they found several shipping containers filled with the family’s personal effects as well as items taken from the presidential palace. In the property’s lake, there was a boat bearing the names “Lula & Marisa” (his wife’s name) and two pedal boats with the names of Lula’s grandsons. When asked about the boats, an indignant Lula is said to have retorted that, “this question does not rise to the level of the Federal Police.” The property is technically in the name of José Carlos Bumlai, a family friend and powerful name in agribusiness who is now in jail as a result of the Car Wash probe.

In addition to officially being investigated by Car Wash, Lula has been charged with money laundering in a separate corruption investigation into irregularities related to a luxury beachfront condo in the coastal city of Guarujá (Car Wash is also investigating this apartment). Lula is again accused of failing to declare his ownership of the investigated apartment, a triplex penthouse that was also renovated by the same company that worked on the country estate, OAS. Lula has also repeatedly denied that he owns the apartment, although this is contradicted by testimony from dozens of witnesses. The realtors responsible for selling units in the building even told prospective buyers that they would benefit from additional security on the beach due to the presence of the ex-president. The apartment is technically in the name of OAS. In a controversial and unprecedented turn of events, prosecutors in this case are calling for Lula to be arrested preemptively, fearing that he will use his clout to interfere with the investigation or flee prosecution.

Lula has repeatedly denied any wrongdoing in relation to his alleged real estate holdings, which, when combined with the value of their renovations, are worth millions of reais. It is notable that he was accused of similar real-estate related improprieties in the 1990s, when he was the president of the PT. He continues to deny knowing about the Mensalão and Petrolão corruption schemes that have implicated so many important figures in his party and many of his closest associates and friends.

Dilma: The least popular politician in the world

Current president Dilma, Lula’s protégé and hand-picked successor, also claims to have known nothing about the Petrolão. As satirized by the comedian John Oliver, this is staggering given that it happened while she was the Energy Minister and chair of the Petrobras board. She is also facing impeachment due to unrelated accusations that she illegally used money from state banks to conceal a budget deficit. Although she has not been cited in the Car Wash investigation, as it gets closer to her close advisors and mentor, the likelihood of her impeachment increases. A separate investigation by Supreme Electoral Tribunal is looking into allegations that her reelection campaign was financed with dirty money from Petrobras. If this is found to be true, it could lead to the dissolution of the government and new elections.

Given all of these problems, which have divided the country and paralyzed the government, many are calling for Dilma to resign. Others cite her administration’s heavy-handed interventions in the Brazilian economy, which have greatly exacerbated the economic crisis resulting from the dramatic drops in commodities prices. Her dismal approval ratings are the worst for any Brazilian president in history.

Her many shortcomings and disappointing performance as a leader raise the question as to why she was chosen to succeed Lula in the first place. In fact, as a relatively inexperienced politician, she wasn’t his first choice. However, since many of Lula’s closest advisors were forced to step down after the Mensalão, he ran out of options. As one of the few left standing, Dilma replaced José Dirceu as Lula’s Chief of Staff and thereby became his political successor.

Partisans behaving badly: Part II

Ten years later, the Petrolão has replaced the Mensalão as the massive scandal du jour. History is repeating itself as players in the highest echelons of the government are the targets of a multitude of investigations both linked to and separate from the Car Wash probe. These include the president herself, as well as the vice president, Michel Temer, the president of the Senate, Renan Calheiros, and the speaker of the house, Eduardo Cunha, among many others.

Brazil’s legal system: A “loophole-ridden oddity

The widespread investigations into corruption in the past decade, especially the particularly aggressive Car Wash investigation, have highlighted the strengthening of Brazil’s institutions and raised hopes that its culture of impunity would finally be dismantled. Indeed, the unprecedented Mensalão trial was thought of as a watershed moment in this regard. Disappointingly for many Brazilians, the 25 people convicted in that trial have faced fewer consequences than expected. The signs that this would happen began to appear before the trial even started.

Although the scandal broke in 2005, due to the glacial pace of the Brazilian justice system, the trial did not begin until 2012. For those “mensaleiros” who were ultimately convicted and sentenced, modes of preferential treatment abound. Due to a Brazilian law which guarantees preferential treatment to those with college degrees, they are able to reside in more comfortable facilities. Many of them were allowed to serve their sentences in a “semi-open” regime, in which they sleep in prison but are allowed to go out to work during the day. Others ended up under house arrest. And some have been or are in the process of being pardoned and freed. Finally, the Brazilian legal system allows for a large number of appeals, even for Supreme Court decisions, and convicts are allowed to leave prison until the appeals process is exhausted.

This dilution of consequences helps to clarify the context for the highly charged reactions to the recent developments in the corruption investigations involving Lula. In a country where so few actually pay for their crimes, the sight of the former president being taken into police custody for questioning was unprecedented and symbolic that no one is above the law. The subsequent request for Lula to be jailed during the investigation of his Guarujá apartment further brought this point home.

Operating like zealots

Although the corruption investigations in Brazil have been widely lauded, they have not been without controversy. The case of the request for Lula’s arrest is a particularly charged example: It has been criticized for being precipitated and having a thin legal basis. But the long history of powerful people going unpunished helps to explain the media spectacle surrounding it, as well as the precipitation of the prosecutors themselves.

They say that Lula represents a flight risk, in that he could literally flee the country but could also flee from prosecution by taking a post as a government minister. As a government minister, he could only be arrested with permission from the Federal Supreme Court. They also say that he could use his influence to derail the investigation, citing the president’s visit to him the day after he was questioned as evidence for this. It is indeed jarring to see, as the prosecutors stated, a sitting president abandoning her post and her presidential duties to visit and show support for someone who has no official public role and who has been accused of crimes. Finally, they argue that Lula could use his position to incite violence and is therefore a threat to public safety.

Although legal experts have debated whether this request follows the letter of the law, to laymen and observers of Brazilian politics, none of the justifications made by prosecutors is unrealistic. Lula is indeed rumored to be considering becoming Dilma’s chief of staff as a way of escaping prosecution. If this were to occur, judges who were appointed by and are members of the PT would become responsible for his case. He has repeatedly invoked militancy among his supporters. And Lula is certainly the most powerful and influential figure in Brazilian politics; it is not a stretch to imagine that he will do everything in his power to influence the outcome of the investigations against him. Nor is it unrealistic to presume that the governing PT will intervene on his behalf: Just last week, the Justice Minister resigned under pressure to better shield party members from the investigations (to replace him, Dilma nominated her chief of staff, who does not have a law degree).

Observers have also criticized Judge Sergio Moro for being overly aggressive in preemptively jailing suspects in the Car Wash investigation. He has been doing this to pressure them into signing plea bargains and offering information in exchange for reduced sentences. But given all of the recourses and loopholes available, as well as the widespread political “gaming of the system,” it becomes easy to understand why he would choose to act aggressively. Without such efforts, would he be able to get his investigation off the ground?

Of course, the criticisms of any prosecutorial overreach are necessary, because if they tarnish the corruption investigations by cutting corners and delving into grey areas, they risk eventually turning into the type of corrupt monster that they are fighting. It seems that prosecutors are trying and perhaps sometimes failing to maintain a very delicate balance: They are fighting not only corruption but also, at times, the Brazilian legal system itself.

The PT: Disingenuously playing the victim

Despite its “colorful” history, the PT’s rhetoric in response to the corruption investigations is to play the role of the victim. It states that the investigation is nothing more than a political witch-hunt and accuses the Brazilian right and the media of organizing a coup. The battle has cynically been positioned by those who have grown wealthy through corruption as an attack by the elite on representatives of the poor.

In actuality, there is broad popular support for Operation Car Wash and other investigations into corruption. Many Brazilians are feeling disillusioned with Lula and his party’s betrayal. The PT came to power proclaiming that they would fight corruption and help the poor, but they have instead helped themselves to public money, giving the poor modest short-term assistance while failing to make the investments necessary to eradicate poverty in the long term. The party’s credibility as the defender of the common man against the entrenched and corrupt establishment has certainly been strained.

In public, Lula remains defiant, stating that, “if they arrest me, I will become a hero. If they kill me I will become a martyr. And if they let remain free, I will become president again.”

However, candid moments caught on camera indicate that he might not be so cool after all. After he was released from police custody, he can be seen in the background of a video of support made by a Communist Party official and PT ally. As the official asserts that Lula is calm and not worried, he can be heard shouting “they can shove the whole investigation up their asses!”

Of course, the PT did not invent corruption in Brazilian politics, but they have taken it to another level. As more allegations come to light, it becomes increasingly apparent that, unlike previous politicians, the PT set official duties aside and made of corruption its main vocation. In the PT’s Brazil, there is no politics, only organized crime.