The Washington PostDemocracy Dies in Darkness

Brazil’s president says, ‘I’m not guilty,’ but even allies wonder if she can survive

Brazil's President Dilma Rousseff waves after meeting Italian Prime Minister Matteo Renzi in Rome on July 10. (Filippo Monteforte/AFP/Getty Images)

Last week, Brazil's President Dilma Rousseff, looking increasingly isolated in a deepening political crisis, gave a newspaper interview to insist: "I'm not going to fall."

Rousseff said she was “not guilty” in the multi­billion-dollar corruption scandal at the state-run oil company Petrobras, even as a criminal investigation, dubbed Operation Car Wash, tightens around leading politicians from her ruling coalition.

Brazil’s embattled president responds to her critics

On Tuesday, police searched houses belonging to senator and former president Fernando Collor de Mello, impeached in 1992, and other allied politicians.

Rousseff’s approval rating eight months after winning reelection is just 9 percent, according to a poll released in July. As Brazil’s economy slides into recession, inflation and unemployment are rising and a rebellious Congress keeps voting down government measures.

And, seeking to exploit the oil scandal, the opposition is behind legal actions at Brazil’s highest electoral court that could threaten to unseat her. Another headache beckons later this month, when Rousseff will have to defend her 2014 mandatory budget reports in the Federal Court of Accounts, which indicated in a preliminary finding that it could reject them.

All this has fed speculation — even among her allies — that Rousseff may not survive to the end of her term in 2018.

Yet some see Rousseff as more of a symptom than a cause of Brazil’s troubles.

“We would not like people to have the illusion that changing the government, changing the person in charge, would change things here,” said Deltan Dallagnol, the federal prosecutor who is coordinating a 90-strong task force investigating the Petrobras case in this neat, organized city in southern Brazil. “The problem is much deeper. The system generates corruption.”

But, like politicians everywhere, those in Brazil have to keep an eye on their own immediate futures, and right now the picture isn’t a pretty one.

“There is a lot of back-fighting and infighting going on. Brasilia is like a hornet’s nest,” said David Fleischer, emeritus professor of political science at the University of Brasilia in the nation’s capital. “Her making it all the way to 2018 is problematic.”

Supporters of Rousseff's Workers' Party argue that the anti-
government media is collaborating with the opposition Brazilian Social Democracy Party to force her from power.

“There is an attempt at an institutional coup in Brazil, conspired by part of an elite that does not accept the Workers’ Party project of social justice,” Rui Falcão, the national president of the Workers’ Party, said in an e-mail interview.

The word “coup” cuts deep in Brazil, which suffered two decades of a military dictatorship during which both Falcão and Rousseff were imprisoned and tortured.

A separate team of prosecutors in Brasilia is investigating 50 lawmakers from six parties, including opposition senator Antonio Anastasia, and four governors. Former Workers’ Party treasurer João Vaccari and a former federal deputy, André Vargas, have been jailed and face charges related to the scheme.

Leaks from key witnesses have been heightening the tension. The right-wing weekly Veja printed testimony from Ricardo Pessoa, who owns the engineering firm UTC and is accused of running a “bribe club” of contracting companies. In the leaked transcript, Pessoa, who has turned state’s evidence, said he had been “persuaded in a very elegant manner” to donate to Rousseff’s winning campaign last year.

Brazil’s ruling party wonders how it lost its populist touch

Rousseff countered that Pessoa’s firm also donated to her opponent last fall, Aécio Neves. “All the donations that the Workers’ Party received were strictly within legal parameters,” Falcão said.

Neves retorted: “President Dilma’s disconnection with reality is absolutely unbelievable.”

Neves’s Brazilian Social Democracy Party is behind an electoral court action into allegations that Rousseff’s victorious 2014 campaign was financed with money obtained through corruption.

It also alleges that the government delayed release last year of official data that showed an increase in extreme poverty levels, despite Rousseff’s first-term promise to eradicate it.

In a separate case, the Federal Court of Accounts found “distortions” in the government’s 2014 accounts worth $89 billion and what have been dubbed “fiscal pedal-pushing measures,” in which the government delayed paying state banks money used to fund social welfare schemes to the tune of up to $13 billion over five years.

Previous governments employed similar maneuvers, Brazilian media has reported, but for much lower sums. If Congress follows the court and rejects the 2014 accounts, it could, in theory, suspend Rousseff’s mandate and even impeach her — a long, complex process. “The government is proving that it did not commit illegalities,” Falcão said.

Fleischer, the professor, said impeachment is “possible but not that probable.” More Car Wash revelations could change that.

“The mud is seeping very close to her door,” he said.

The graft at Petrobras began, said Dallagnol, the prosecutor, with “political pressure” applied to a former Petrobras executive, Paulo Costa, who has also turned state’s evidence, by José Janene, a federal deputy for the Progressive Party, allied to Rousseff’s party. Janene died in 2010.

Political parties like his “indicated” which directors took top Petrobras positions. In return they received bribes. “A lot of people who pay bribes, they are asked to pay bribes through formal donations,” Dallagnol said.

This month, police arrested a fourth Petrobras director: Jorge Zelada, former director of the international department, whose predecessor, Nestor Cerveró, has been sentenced to five years for money laundering. The Brazilian Democratic Movement Party, the key ally in Rousseff’s ruling coalition, has admitted that it “indicated” Zelada for his job.

The party’s alliance with the government is increasingly tenuous. At the same time, two of its leading politicians, Senate President Renan Calheiros and House Speaker Eduardo Cunha, are being investigated in the oil scandal.

As the criminal investigation becomes more globalized, a bank account in Monaco in which Zelada had 11 million euros has been frozen. A Norwegian company, Sevan Marine, has hired a law firm to investigate any relationship with Zelada and whether bribes were paid on Petrobras contracts on its behalf via an intermediary.

The U.S. Foreign Corrupt Practices Act could persuade other international companies that signed Petrobras deals to come forward. Dallagnol’s team is in contact with both the U.S. Securities and Exchange Commission and the Justice Department; Petrobras confirmed that it is collaborating with both U.S. agencies.

Amid all this, Brazil’s economy is facing recession, and cuts that affect workers’ benefits have angered Rousseff’s trade-union supporters.

In June, Rousseff’s political mentor, the popular former president Luiz Inácio Lula da Silva, said he and she had reached the “dead volume” — a phrase used last year to describe emergency water supplies taken from the bottom of Sao Paulo’s dried-out reservoirs.

“We have no evidence so far that Lula was involved or that Lula knew what was going on,” Dallagnol said.

The day after allied parties signed a letter of support for Rousseff, the Senate voted against the government on a pension benefits measure. Anti-government street protests are planned for Aug. 16.

On Saturday in Milan, the president wobbled unsteadily across a net stretched over the Brazilian pavilion at the Expo Milano 2015 exhibition, steadied by a minion.

“Do you think this is a good metaphor for your second mandate?” one reporter asked.

Rousseff said her mandate was firmer than the net. “But we always need help to not fall, right?” she said.

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