Brazil's Corruption Scandals Loom on President's Political Horizon

By Monte Reel
Washington Post Foreign Service
Wednesday, September 28, 2005

RIO DE JANEIRO -- Political corruption scandals that in recent months have weakened public support for Brazilian President Luiz Inacio Lula da Silva are now bringing changes in the nation's legislature that could directly affect the president's political survival.

The Chamber of Deputies, the lower house of Congress, is set to choose a new speaker Wednesday after the resignation last week of Severino Cavalcanti, who was accused of soliciting bribes from a restaurant owner. On Monday, Lula's Workers' Party lost its legislative plurality when four of Lula's deputies switched to other parties.

If an opposition party member wins the top post in Brazil's lower house, it could not only undermine the president's legislative agenda but also add momentum to demands by adversaries that he be investigated for corruption within his party.

So far, none of the allegations of wrongdoing has directly implicated the president, a former labor union leader who took office in 2002 promising to root out corruption associated with the country's ruling elite. But the allegations have led may Brazilians to ask how much longer he can govern unscathed as senior aides and allies fall around him.

In a survey published Thursday by the Brazilian Institute of Public Opinion and Statistics in Sao Paulo, 49 percent of those responding disapproved of Lula's administration and 45 percent approved -- a long fall from the 60 percent approval ratings he enjoyed last spring.

"People said they believe he's not involved, but that he trusts too much in the people around him," said Marcia Cavallari, director of the institute. "Since the crisis started, his approval keeps going down, little by little."

The chances of impeachment remain slim, analysts said, in part because many of Lula's opponents would rather face him as a weakened candidate in elections a year from now. Lula has not yet said whether he will seek reelection, but an unfriendly Chamber of Deputies speaker could also make it difficult for his administration to pass legislation in the coming year.

Cavalcanti was a member of a small party that is part of the ruling coalition. He was once an outspoken critic of Lula, but in recent months had become an important ally who worked to protect the president's legislative agenda.

Cavalcanti quit after being accused of soliciting more than $48,000 in bribes from a businessman in exchange for a concession to run a restaurant in the congressional building in Brasilia, the capital. In a televised speech, he denied any wrongdoing and blamed the accusations on adversaries in the news media and the political arena.

The corruption allegations first came to light in May, when a legislator accused the Workers' Party of paying monthly allowances to congressmen in exchange for their support of Lula's legislative initiatives. A congressional panel of inquiry urged the impeachment of 19 legislators, and the four senior officials in Lula's party were ousted for their roles in the scandal.

Lula's chief of staff, Jose Dirceu, resigned in June after it was alleged that he knew the party had used more than $24 million in undeclared loans to repay campaign debts. Then, this month, the top aide to Lula's finance minister resigned after allegations of kickbacks emerged.

When the four Workers' Party deputies switched parties this week, they were joined in defecting by about 400 political activists. Some analysts predicted that others might follow in coming weeks.

"The crisis shows no signs of dying down," Murillo de Aragao, a political analyst, said in an interview in Brasilia. "Until the next elections, the government will continue to be totally paralyzed. It's very difficult for it to recover its agenda."

With three different congressional inquiries into corruption charges set for the fall, the crisis is likely to hound Lula until the elections. The scandal dominates casual conversation, with each new chapter further gripping -- and depressing -- the populace of South America's largest country.

"When I voted for Lula, I was also voting for all the people he brought into power with him," said Paulo Roberto Monteiro, 35, a lawyer. "I was really disappointed when people like Dirceu got caught up in this, because they're a big reason why I supported Lula in the first place. I expected more from them."

Last Wednesday afternoon, customers in restaurants and cafes here gathered around television sets to watch Cavalcanti deliver his resignation speech, in which he lashed out at his accusers, calling them part of a political witch hunt.

"All the Brazilians I know think the political situation is completely hopeless," said one customer, Sheila Pereira Cardozo, 25. But even so, she said she didn't believe Lula's prospects were doomed. Last week's survey by the Brazilian Institute found that many people agreed with her. If he decided to seek reelection, Lula would still be a top contender, according to the poll.

Among a field of seven potential candidates, the poll showed, Lula had a slim lead of three percentage points over Sao Paulo Mayor Jose Serra, who lost the previous presidential race to Lula. In a two-man contest, survey respondents favored Serra by nine percentage points.

One reason Lula's political prospects have not further deteriorated despite the general disillusionment with politicians is that Brazil's economy has continued to thrive. The country's Bovespa stock index hit an all-time high this week. With interest rates at 19.5 percent, international investors are pouring money into the country. The economy is growing at about 3 percent a year, and for the first time in its history, Brazil issued bonds this week in its own currency, the real, instead of the dollar.

"If the economy is still going strong, I'm going to vote for Lula again next time, because I know all the other candidates are even worse than he is," said Claudio Miranda, 32, an accountant sitting outside a restaurant.

As the accusations and resignations continue to pile up, some Brazilians also suggested that the country was going through a long-overdue purge that, in the long run, will produce healthy results.

"This is nothing new in Brazil -- the difference is just that everyone knows about it," said Dalton Ferraz, 45. "It's up to the people now to make sure the corrupt politicians aren't reelected."

Special correspondent Raquel Sacheto in Brasilia contributed to this report.

© 2005 The Washington Post Company