The Choking of Brazil’s Worker Party

Rio de Janeiro.

Brazil’s Workers’ Party (PT) has always been its best opposition, both outside and inside of government. But was it only yesterday that it looked so invincible?

Two years into holding the reigns of Government had President Luis Ignacio “Lula” da Silva already poised to sweep next year’s presidential elections. Despite his party’s incompetent strategy to keep presiding over the Federal Assembly (Camara dos deputados), which ended disastrously with the election of the extreme-right Severino Cavalcanti as House “President”, Lula’s government looked able to finally begin moving on legislation of a more reformist nature. A pension plan for the country’s housewives and 40 million workers of the informal economy for starters. Too little, too late? Regardless, internationally Brazil’s prestige had never been higher.

Little had stood to suggest that a part of the PT leadership and some members of Lula’s cabinet were to be caught proactively in the midst of the severest corruption scandal to rock the “Federative Republic” since the impeachment of President Fernando Collor de Mello in 1992. This is what has occurred in these dismal weeks.

By now the allegations against the governing Workers’ Party are well known. They hold that the party illicitly paid substantial monthly stipends — the so-called “mensalao” — to its coalition partners in parliament in exchange for votes on key bills. For a party that had built its reputation on opposing the land- and bank sector oligarchs and denouncing the infrastructural corruption bleeding Brazilian society, Lula’s government and PT house representatives have severely damaged the moral rectitude for which party members have fought so hard to uphold.

It serves nobody’s justice to wave Lula’s government off as having little in common with a leftwing agenda and application. Yet one must grant that the concrete nature of Lula’s policies has been all but truly socialist. Still, it is difficult to deny that Lula sought reform as a harmonious national project. Political violence from the elite is a given in any country when deep reform is undertaken under the banner of the population’s will. Lula had no intention of spilling his fellow Brazilians’ blood. Murderous police and nostalgic torturers still run the streets and live in impunity.

As such, Lula’s helmsmanship has reflected a feeling within the PT itself, an admixture of Marxists, progressive “liberational theology” Catholics and trade unionists. It has also borne the vacuum of working class presence within the party. The PT spoke through the voice of Brazil’s demanding middle class on the poor and on economic disparity, because next to the poor, it was the middle class who was paying the brunt of the rich’s immoral extravagance.

Despite the middle class nature of those demands, clearly social-democratic in nature, they have remained largely unmet. Brazil may be the world’s 12th economy, but the country keeps showing a disgustingly low record of wealth redistribution. The measures addressed to the poor, such as “Bolsa Familia” and increased minimum wage, have been tepid to say the least. That’s largely since they have been matched with exponential increases to the benefits received by the richest, from the federal judiciary to politicians alike.

Lula da Silva was elected in November 2002 with a landslide victory of some 65 percent of votes. There’s little denying that the victors in these promised steps toward a quiet revolution have been Brazil’s banks and international investors. The losers, the PT’s intellectual and working class left, were already exiting from the dream dimension. At any rate, the Lula of the land of plenty has been an image upheld more by the patronizing cynicism of the mainstream press and former president Fernando Henrique Cardoso. As the vote-buying scandal broke, the remaining PT intellectuals ended up fleeing wholesale (Folha de S. Paulo, June 26). A few have ventured on, trying to keep the ship from capsizing. But most are stunned. How could this level of treachery have occurred? It’s only the smartest amongst them, or the most realistic, who bewail the incompetence.

For incompetence is the word here, well before white-collar criminality. Blame the structure of Brazil’s conflicting parliamentary-presidential double bind democracy. Blame the lack of administrative experience in many of the PT’s movers and shakers. Or simply blame a leftwing idealism that still believes it is exempt a priori from moral cynicism, hovering just a breadth away from angelicism. The fact of the matter is that Brazil’s PT will go down as it arose: through awareness and will. And that from the very first days following the President’s investiture as the new Congress took shape.

Lula da Silva won the presidential elections through a direct vote. But legislative elections run according to proportional criteria. In a State with, say, 10 congressional seats up for grabs, only 10 percent of the vote total will still get your party one seat. Given that the most recent elections saw some 25 parties running candidates, the vote distribution among parties from State to State tends to get quite dispersed, especially at the bottom rung. By contrast, the plausibility for a one-party majority in Congress has been low ever since Brazil’s 1988 Constitution sealed the new groundwork for democracy in the wake of 21 years of military rule. The fact of the matter is that no cut-off threshold applies for political parties to receive a public refund on campaign-related expenses. A bill meant to place the barrier at 5 percent of votes has been stalled in Congress for years.

Readings as to the objectives of the dual parliamentary/presidential set-up have varied ever since 1988. The upshot is that a cluster of very small parties can end up wielding considerable power by offering their support as a ruling party works its bills through the legislature.

Despite its campaign pledge to run a clean slate election with respect to political alliances, the PT is in the firing line precisely due to a party to which it is allied: the PTD (the Labor party). The latter is now the object of a CPI (Parliamentary Investigation Commission) on a charge of organizing a corruption scheme from the executive management positions held by some of its members in the national postal service and the Brazilian Reinsurance Institute. Unlike what has occurred in past scandals here, the now fallen president of the PTD, one Roberto Jefferson, accused of masterminding the scheme, has become a whistle blower. Not only has he drawn the PT to center stage in this CPI, he has also unleashed an institution-wide scandal by alleging that the government and PT managed a massive vote buying scheme involving the parties to which it is allied in the lower House.

Political alliance for small parties in Brazil is a very lucrative affair. The pieces to be traded off for political support in the legislature are any of the nation’s 20,000 civil service patronage jobs. This type of trade-off is a political standard in all countries. However, even by proportional standards, Brazil’s patronage offerings are bloated.

Yet for the PT the problem has only partially had to do with backbencher support. Its leadership knew full well about the type of persons these parties propel to power, hardly as “humble” as the International Herald Tribune has portrayed them (July 6). So the government worked through a mirror-play strategy. It signed alliances with parties, while keeping them out from ministerial and administrative positions so as to accomplish the PT agenda.



Until the scandal erupted, the PT held as many as 75 percent of the key positions available. With only 25 percent representation in the lower house of Congress, and therefore at the mercy of political alliances to have its bills enacted, the government was compelled to broker another power-sharing scheme. As the picture taking shape seems to suggest, the PT ingeniously decided that the political price to pay was higher than what a financial deal could afford. Its allies, house representatives who already bear disproportionately high salaries and priviledges for their 4-day-a-week job of “serving the people”, were then paid in exchange for their vote ­ and paid a lot, some $12,500 per month.

These are the allegations made by Roberto Jefferson. They have been gobbled up and spat out by the centre-right media. Thus far, there is still little solid documented proof, although with the progression of the CPI on corruption in the postal service, details of bank transactions are appearing. And they do not look good for the PT executive.

Government contracts present lucrative gains for firms anywhere. Stateside, exhibit Halliburton KBR, Lockheed Martin, or Enron What we, the citizens, of a democracy demand is that contracts be granted through tender, primarily to block the temptation of illegal “kick-back” commissions made by corporations to middle-men who are either well connected and/or have been very close to the seat of power itself. The lobby group has become a means to cover over this nether zone of legal loopholes and impunity. So has the political advertising industry.

Capitalism is an economic system proven to produce unbalanced privilege. However, no oligarchically arranged economy, whether in the US or Brazil, needs capitalism to implement its brand of social disarray — capitalism is required merely as a smokescreen by which to fend off other power groups vying for the big ticket. When you really can’t stand your enemies, just call them communists or terrorists — or these days in the US, “liberals”. Nonetheless, getting the public’s adherence to support your rip-off economics requires a measure of law to be in rule. This is why sometimes the big fish must get caught.

Kick-backs are common practice in most countries. Rare are the cases, as in Canada these days in its patronage scandal over Quebec separatism, when ideology is the motif that bleeds public funds illicitly into private hands. In the recent past, in France, Germany, Japan and now Chile, more typical is the siphoning of funds into groups, namely the political party. No less private, no less self-interested as far as the public good is concerned, private campaign funding is the scorning of democracy.

With Roberto Jefferson’s first denunciations, the opposition called for a CPI. Mirroring the previous executive, Lula’s government refused to recognize the need for such a Commission on fears that the legislative procedure as a whole would be stalled, and on grounds that the Federal Police and Public Attorney’s office were competent and independent enough to pursue the investigation into the PTD’s alleged wrongdoings.

In the meantime, something somewhere went terribly wrong in the relationship between the PT’s directorship and Roberto Jefferson. A well-known pattern in white-collar crime is that in the event of discovery, a single person of the plotting group becomes a fall-guy. His tepid incarceration at least gives the public satisfaction that wrong has been righted while the scandal blares in the media spotlight — provided nobody appears to blow the whistle. At its depths corruption remains sound primarily due to the arduous task of undoing the paths of money laundering through the international off-shore banking grid.

Surely, this is what occurred with the corruption charges brought by the previous government against two of its main allies. True to the pattern, these (former) allies did not turn the tables on the government. In the current case, something has led Roberto Jefferson, the original culprit, into whistle blowing: not least of which is awareness of how tarnished a political record he bears with a long history of corruption allegations.

Yet the end result of countless press interviews and two CPI testimonies of some 15 hours in length and broadcast live on cable-television, is that Jefferson has been turned into the nation’s most theatrical and high-level whistle blower. The man has literally migrated from sitting on the bench of the accused to sparring from the accuser’s pulpit. Now the gangster sports a sage’s shroud, advises the President on whom to sack, and gets applauded as a hero on a late-night talk show.

The damage has spread high and wide. Lula’s chief of staff, alter ego, and the PT’s most distinguished former militant, Jose Dirceu, resigned amidst Jefferson’s allegations that he organized the pay-off scheme only to then lose control over it. It must be recalled that Dirceu has been swimming upstream since one of his main aides was caught on video last year extorting a political financial contribution from one of Rio de Janeiro’s leading hustlers.

Jefferson has not lent his tongue to any cats, though. On July 5, the entire PT directorship vacillated amidst his denunciations. The party treasurer is accused of organizing the payments through a publicist spin doctor, Marcos Valerio de Souza. After initially denying any further connections with the PT, it has been revealed that Valerio gave the party a 1 million dollar guaranteed loan.

Further documents seem to back up Jefferson’s allegations that Valerio organized the payment of the multimillion dollar vote-buying bribes through one of his companies’ accounts at the Banco Rural. He is also being investigated on money laundering charges related to slush funds set up by state enterprises to fill the coffers of the PT and their allies. Valerio has been battling against the claims of another whistle blower, his former secretary, when it isn’t against his own lies — freely and openly declared on national television in an attempt to rebut his secretary’s assertions. Before testifying at the CPI, he was astonishingly granted habeas corpus by the Supreme Court to refrain from answering questions on potentially incriminating activity. Despite hours of drilling, the CPI was left only with doubts.

The Commission is now closing its third week. Even before resuming last Tuesday, its effect has been deep. By day’s end, PT Secretary General, Silvio Pereira and Treasurer Delubio Soares resigned, while Party president Jose Genoino is desperately struggling to keep power and order. An on-growing list of witnesses summoned to the CPI was added by week’s end. The government’s ethics commission into vote-buying has lost steam as the likelihood of criminal prosecution begins to crystallize. A second CPI was set up on Wednesday to directly investigate vote-buying, though not limiting the time frame to the current government’s term. This pattern of performing politics has decidedly been around for some time now.

President Lula met with PT rank and file last Friday. He also held a behind-closed-doors traditional St. John’s June party with his cabinet the following day. Apparently on the agenda was the cabinet reshuffling forged with the PMDB. The shuffle has long been requested by the coalition parties but is now being snubbed as too little to late. At least that was case until Tuesday afternoon.

Then on Wednesday, just prior to Lula’s departure to attend the G8 summit, the presidency announced three new ministerial positions for PMDB members, negotiated with the former and current Senate leaders. Immediately, a board of PMDB State governors and the party president rejected the agreement, and threatened to excommunicate the three new ministers from the party.

What is more astonishing, however, is that instead of seeking qualified members from civil society to fill in the portfolios, Lula negotiated the ministries with the same type of crooks who have gotten him into this mess in the first place. This is incomprehensible, and can only be seen as a sign of confusion. Matters have gotten this Friday as the fate of the President’s leading strategist, Luiz Gushiken, hangs in limbo. He is being cited for unethical behavior due to possible favoritism to an advertising firm with which he had been associated, and appointments to the directorship of the Social Security System. His and Genoino’s departure, after Frei Betto’s resignation six months ago and Jose Dirceu’s forced outing, would be devastating for the President.

Lula and his cabinet may have been on an apparently fruitless search for honest politicians from other parties to fill in the three key ministerial positions. But the PMDB’s ploy is now explicit: without money and patronage jobs, over or under the table, the party leadership refuses to support the government.

Meanwhile, in the cabinet the integrity of Lula’s remaining ministers must be underscored: the Justice Minister, Finance Minister, and the newly appointed Chief of Staff, Ministers of Environment, Culture, Education and Industry have so far proved their outstanding worth. Lula will keep existing ministers in their portfolios provided they do not seek election next year on gubernatorial tickets. The word is complete integrity and devotion to the remaining year and half of government.

Despite claims from within the PT that a white coup is underway, forged as it were between conservative parties and the private media like Veja magazine, little evidence points to support it. Although, one thing is clear. Some elements of the media are intensifying the charge and trying to hit beyond the criminal target. As often in Brazil, it is not clear whose interest is being upheld, though it is seldom the public’s. That President Lula never appealed to many of Brazil and Sao Paulo’s elite is a fact. Yet he has done little to disturb their financial swindles and environmental rampage.



Through this enormous scandal, Brazilian socialists, progressives and reformers are left bearing their historic confusion. After 1954, with the suicide of the populist social democratic version of Getulio Vargas faced with an impending coup, and in 1964 with President Jango’s ill-organized land reform and subsequent overthrow by the military, we’re crossing another bitter channel.

If incompetence appears to suit the charge, it’s because this type of scandal was bound to happen after President Lula decided to seek his allies from the camp of the crooked, the cronies and former supporters of the military dictatorship. The governing PT’s list of allies is a liability. It was for taking up arms against the latter that Lula, Dirceu and Genoino and Gushiken all did time at different moments in the sixties and seventies. As experienced militants, it behoves us to ponder what they could have possibly had in mind by forging the alliances they did. Those who pressed criticism of the issue soon found themselves expelled from the PT. It is now the privilege of their leaders, such Senator Heloisa Helena of the P-Sol party, to set the record straight.

Riling with furious irony against Jefferson at the CPI in the early morning hours of June 30, the Senator from Pernambuco State hammered away at the PT’s political-economic mirroring of the previous government. Ms. Helena recalled that after all the criticism it voiced as an opposition party, after all the effort to put forth another economic vision and run an election on its historic platform, “the PT government has proved not only to have mirrored its predecessor’s economics, but its corruption, too.”

From a philosophical angle, it’s hard to get too formal about democratic theory in the way northern professors are wont to do with all this chaos going round. Mind you, chaos is not a word to be used lightly after living in Rio de Janeiro. But theories on deliberative democracy still tend to dismiss corruption as merely an unwarranted and unwanted ill, an offshoot of man’s crooked nature, though in the end more typical to others than ourselves.

It is perhaps hard to picture a political system such as Brazil’s, in which persons enter the civil service deliberately to rob ­ ina white colla’ stile. Blame that on the picture ­ not the reality. Canadian and American politicians are showing the bulges of their lined pockets, too. Typically as a utilitarian remedy, our neoliberal punsters summon governments to privatize the public sector — when there’s one left. One’s hard pressed to overhear even a whisper on how the salaries of executive management must be slashed. An average of 200 times employees’ wages is morally unjust and economically scandalous. The unemployment resulting from the ethically deprived commitment to privatization is merely bound to produce more street crime, more fear. The elite can thus live well behind private security and propound a national security ideology. In the meantime, white-collar crime spreads as invisible as the post-industrial analogue of dioxin-based pollutants.

Lula’s government is weak, and is bound to get weaker in the upcoming weeks. Then comes the time for resilience.

Friday afternoon’s breaking news: The President has named a member of civil society, Luiz Marinho, the head of CUT (Central unica dos trabalhadores), one of the country’s largest trade unions, to be Minister of Labor.

NORMAN MADARASZ, a Canadian, is visiting associate professor of philosophy (Bolsista CAPES/Brasil) at Universidade Gama Filho, Rio de Janeiro. He welcomes comments at