2017 In Brazil: A Series of Unfortunate Events

In Brazil, as in many other places in the world, 2017 has gotten off to a very rocky start. Indeed, anyone who has been following the Brazilian news has been met by a barrage of crazy headlines: Gruesome prison riots in which dozens of prisoners were decapitated. A violent police strike marked by hundreds of murders and widespread looting. The worst yellow fever outbreak in a generation, and all while the country is still reeling from the Zika crisis. As many state governments have essentially gone bankrupt, violent protests have erupted against proposed austerity measures. To add insult to injury, the multi-billion dollar facilities constructed for the Olympics are already abandoned and in disrepair, just a few months after the completion of the Games. And all of this while the country struggles to exit its worst recession ever.

But the biggest problem facing Brazil is, as ever, political. And the political problems exist, as always, largely as a result of corruption. And they persist even though, or perhaps precisely because, the issue of corruption is being tackled head-on in an unprecedented way, through the massive investigation known as Operation Car Wash. It has implicated dozens of politicians at the highest levels of government, including the president, members of Congress, and business leaders, among many others. It is in relation to this scandal that the headlines out of Brazil start to get especially upsetting.

When the Car Wash case first started, about three years ago, there was much reason to be optimistic. Impunity for systemic corruption had long been the norm in Brazil, but with the advent of this investigation, powerful people were suddenly being held to account. Brazilians have been watching in awe as prominent businesspeople are arrested, tried and convicted for their crimes. But they have also been watching another, more depressing turn of events: the obvious ways in which sitting politicians benefit from a parallel legal system that is much more generous than that afforded to everyone else.

The problem is that due to a law giving some public servants a type of prosecutorial immunity, all of the cases involving high-ranking officials must go through the bottleneck that is Brazil’s Supreme Court. It has a massive backlog and works at a notoriously slow pace (with only eleven Justices, it must handle 100,000 new cases per year). People who do not possess this so-called “privileged forum” are being processed by the far speedier and more stringent lower courts. While the court overseen by the crusading Judge Sergio Moro has already handed out over 100 convictions, along with prison sentences totaling over 1,000 years, the Supreme Court has yet to complete its first Car Wash case. Roughly 22,000 Brazilian public officials benefit from the privileged forum. A recent study estimates that in cases where people with privileged forum are charged with a crime, only 1% are convicted.

Car Wash is also, in a way, a victim of its own success. The more the investigation dug, the more rot it found. Now, it has become evident that there is way too much crime out there for the justice system to handle – it will just take too long, allowing statutes of limitations to expire by the time all the trials and endless appeals are concluded. Meanwhile, the implicated politicians are hoping to slip through the cracks. They have undertaken a massive campaign of dodges, delays and distractions, hoping to win this war indirectly, by attrition (other, more direct attempts to derail the probe through legislation have failed, but attempts to make the justice system more efficient by abolishing the privileged forum have also failed to make any progress).

In the midst of this already less than ideal situation, an unexpected tragedy has created even more uncertainty. In a shocking development, the Supreme Court Justice responsible for the Car Wash cases, Teori Zavascki, died suddenly in a plane crash in January of this year.

Timing of judge’s death prompts conspiracy theories

Zavascki, who was appointed to the court by former president Dilma Rousseff, was traveling with four other people in a small private plane owned by his friend, the billionaire businessman Emilio Rodrigues. Rodrigues was also killed in the crash, along with his son and two women, a massage therapist and her mother.

Of course, anytime a judge in charge of a corruption case dies suddenly, there is cause to take a closer look. It is also clear that accidents happen and there is as yet no indication that foul play was involved (the plane in question was small, the weather was bad, and the crash happened in an area notorious for plane crashes).

Still, the timing of Zavascki’s death has led many in Brazil to speculate that it did not happen by chance. Critically, he was in the process of validating and releasing perhaps the greatest bombshell in the case thus far: a plea agreement featuring testimony from over 70 executives at construction company Odebrecht, which has been among the most heavily implicated in the multi-billion dollar corruption scandal at state-owned oil company Petrobras. If verified and made public, the testimony promised to implicate basically the country’s entire political class, including the current president Michel Temer (who allegedly received millions in illegal campaign donations) and senior members of his administration.

And in a country like Brazil, where people involved in scandals have been known to end up dead, there is more reason than usual to be suspicious. Indeed, Zavascki’s son posted about potential threats to his father and his family on Facebook back in May of 2016, stating that it would be “childish to assume that such criminals would simply submit to the law.” He stated that, despite efforts to undermine Lava Jato, he believed that the institutions would ultimately prevail. Still, he ended his post with by warning that if anything should happen to his family, this would be the first place to look.

Preliminary analysis indicates no mechanical problems, and a formal investigation into the plane crash is pending. But will its conclusions be released in a timely manner? The uncertainty will only feed the polarization that has characterized Brazil in recent years, with people on both sides interpreting the exact same events as incontrovertible proof of their opposing worldviews.

Temer: Testing how much nonsense people will tolerate in the name of economic stability

Meanwhile, President Michel Temer’s reactions to the death of Zavascki and to general pressure from the Car Wash probe have been trying the patience of ordinary Brazilians. Indeed, there has long been speculation that Temer, once in power, would focus on saving his allies, many of whom are implicated in the scandal, from prosecution. So far, he is not doing a very good job of disproving this theory.

Brazilians have not forgotten the leaked wiretap audio recording one of Temer’s closest allies, Romero Jucá. The audio leaked shortly after Temer’s predecessor, Dilma Rousseff, was impeached. Jucá stated that something needed to be done to “stop the bleeding” related to the anti-corruption efforts. He said that the first step would be to “change the government so we can reach an agreement with the Supreme Court, with everyone.” He then mentioned Teori Zavascki by name, stating that someone “needed to reach out to him” because he was the only member of the Supreme Court that had no relationships with any politicians on any part of the political spectrum. (Brazil’s top prosecutor is currently seeking to investigate Jucá for obstruction of justice.)

Well, both of these items have now occurred. Dilma Rousseff was impeached for budget fraud and Temer became president. Now, just a few months into Temer’s tenure, the very Supreme Court justice Jucá mentioned has conveniently died. Perhaps all too predictably, Temer has taken the opportunity to appoint as Zavascki’s replacement a close political ally, his own justice minister, Alexandre Moraes. Congress swiftly approved this choice.

There is a highly problematic conflict of interest here, as President Temer is named in the Odebrecht plea agreement, as are many of his cabinet ministers, not to mention a great number of members of both houses of Congress. Any charges and trials on would be handled by the Supreme Court. So was this all part of the plan to “stop the bleeding”? It certainly doesn’t look good. Although Moraes is an experienced lawyer, he is a member of the Social Democratic Party (PSDB), a key ally of the Temer government. Many have called into question his ability to remain unbiased.

It is important to note that Zavascki’s Car Wash responsibilities will not be assigned to Moraes, but have instead been transferred to another sitting Justice, Edson Fachin. He is apparently moving the case forward, having approved a police search and seizure operation last week.

Still, Moraes’s ascension to the court will surely not be without consequence. So what’s next? A big agreement to save all the corrupt politicians? It seems, unfortunately, that this is what Temer is working on. In addition to nominating his ally to the Supreme Court, Temer has also created a new ministry for the sole purpose, apparently, of providing another ally with political immunity (the man in question, Wellington Moreira Franco, had previously served in the government but was not as a minister, so he did not have immunity). Can it be a coincidence that, just prior to his promotion, media leaks indicated that he had been named in the Odebrecht testimony?

What about the economy?

It must be said that, in addition to all his political maneuvering, Temer has presided over some economic improvements. He has put in place what is widely regarded as a capable economic team, and some indicators have become more positive in recent months. The stock market has bounced back, inflation has decreased and this week, the Central Bank announced that Brazil is officially out of recession. Controversial reforms have passed to limit government spending, which ballooned unsustainably in the past decade. But there is still the critical and contentious issue of reforming Brazil’s underfunded and overcommitted pension system. Without the pension reforms, the painful budget freeze will be useless. A generous interpretation would be to say that Congress has thus far been too distracted to tackle this. A more realistic one is that they are basically holding the government hostage, demanding a “get out of jail free” pass in exchange for approving this critical legislation.

And therein lies the problem. Every moment Temer and his cronies spend on negotiating ways to save themselves is a moment not spent addressing the many problems Brazil is facing, including those mentioned at the beginning of this article. It is also a setback against the efforts to fix Brazil’s entrenched corruption, which is at the root of so many of the systemic problems that plague the country.

Stay tuned for more drama

It is no coincidence that all of the disparate crises mentioned at the beginning of this article are happening how. None of these problems sprouted in a vacuum.

The economic crisis is, in large part, the result of years of profligacy and mismanagement by the government, which touted a commodities bubble as real economic progress. They either spent or stole all the money made during the boom years while embracing costly protectionism, failing to diversify the economy away from commodities and implementing insufficient measures to address the root causes of the Brazilian economy’s low productivity (namely dismal infrastructure, health care and education). When the bubble burst, the all too predictable crisis ensued. Government interference made it worse. Now, recession over or not, 12 million Brazilians remain unemployed.

The prison riots? They didn’t happen by accident either. Brazilian jails are notorious for their subhuman conditions. Massively overcrowded prisons run by violent gangs are the result of policies in which large numbers of nonviolent drug offenders are arrested. An unbearably slow legal system forces people awaiting trial, a staggering 40% of the prison population, to languish in prisons for years before ever seeing the inside of a courtroom. The insufficient amount of prisons relative to the mass incarceration created by the “war on drugs” means that there is no way to house such prisoners, who may well be innocent, separately from convicted criminals. As a result of the brutal conditions, people often walk into prison as nonviolent offenders and walk out as murderers, helping to fuel the cycle of violence and insecurity that plagues so many Brazilian cities. The inflow of prisoners greatly exceeds the outflow. There are not enough correctional officers to keep the situation under control, so drug kingpins take over and run their empires from behind bars. Pressure builds. Eventually, things explode. It is inevitable.

And the police strike? Well, that was sparked by the same issues that have been causing anti-austerity protests at the Rio state assembly. Like many other Brazilian states, Espírito Santo, where the strike took place, is effectively broke. The Espírito Santo police are among the lowest paid in the country, and they have not received any salary increases in four years. Meanwhile, the population has been struggling too because of the recession. Poverty breeds crime. When the police stepped back, criminals took advantage of the situation, essentially holding the population hostage. For days on end, schools, businesses and hospitals remained shuttered out of fear as looters roamed the streets. The strike itself and the behavior of the looters can both be seen as acts of desperation. Desperate people on both sides, both victims of the government’s mistakes.

In Rio de Janeiro, too, citizens stretched to the brink by under-resourced public health, education, and infrastructure are protesting policies that would cut resources even more. They protest the budget cuts in the shadows of the abandoned Olympic facilities, on which the state, local, and federal governments spent billions of dollars. To make matters worse, black blocks of anarchists have been making an appearance, provoking a police force that is already among the most brutal in the world (Rio police are responsible for one-fifth of all homicides in the city). And despite all that harsh policing, Rio is still struggling with insecurity and violence. Is there any wonder people are taking to the streets?

Surely the yellow fever outbreak has nothing to do with politics, right? Well, no. It is theorized to be a result of environmental degradation, which has led to the proliferation of the mosquitoes that carry the virus. That the outbreak is centered on the state of Minas Gerais, which boasts large-scale industrial mining, is no coincidence. The state has been lax in enforcing environmental and safety standards. The most tragic consequence of this is clearly the 2015 Samarco mining disaster, in which a dam burst released a tsunami of toxic sludge, leveling two towns and contaminating a major river. Investigations have found that the dam clearly gave out because of insufficient oversight by the authorities.

And there are a million other potential crises out there, building in plain sight while the authorities do nothing. Unfortunately, many of them may also boil over in the near future.

The solution to all of these problems, surely, is to change the system. Such change is what the Car Wash investigation was supposed to bring. But at the moment, given all the ostensibly successful political maneuvering taking place in Brasilia, it is easy to imagine a scenario in which the anti-corruption movement is overwhelmed. The savvy political/criminal minds operating behind the scenes may well end up allowing for some symbolic victories, to give the appearance of change, while the system itself remains unchanged. It would be a tragic outcome indeed, but a highly plausible one.

A Brazilian Twitter user joked that while Brazil was like “House of Cards” in 2016, it had turned into “Game of Thrones” in 2017 (we made the same prediction last year). Going forward, he expects 2018 to deteriorate into “The Walking Dead,” while in 2019, we will all be “Lost.”

Given how things have been going, it’s hard to disagree.