Is Brazil truly Cleansing its Politics?

Brazilian President, Michel Temer, is the latest casualty of what appears to be a major cleansing process in the country’s political life.

SAO PAULO – It is difficult to be optimistic here in Brazil. The reality of politics is very constricting with what is believed to be happening in the political arena, where it seems that judges are cleaning the house.

Although Lula has been convicted and there is an open process against the current President, Michel Temer – which show how prosecutors and magistrates dominate the political life here – on the other hand, the daily life of Brazilians is not very different from 5 years ago.

The recent conviction for corruption against former Brazilian President Luiz Inacio Lula da Silva is the most recent sign that the system is being purged and it appears there will be other cases like Lula’s.

Brazil is a country suffocated by corruption in which there is a conflict with an air of declared war between the political power, an unusually corrupt state, and the judicial power, unusually incorruptible, it appears.

In recent years hundreds of ministers, governors, deputies, senators and ministers have been detained and even President Michel Temer is being investigated and accused for receiving bribes.

The battlefield is composed by investigations being conducted on the Petrobras case, led by platoons of judges, prosecutors and courts in different institutions. And after three years of unraveling the network of corruption of almost all the ruling class, the front has reached the marrow of the Government.

“It’s an unprecedented moment,” says Bruno Brandão, representative of Transparency International in Brazil. “The image of impunity of Brazilian elites is cracking.” Not so fast, though. No important Brazilian politician, certainly none of the heads of the corruption scheme, has been sent to jail.

The glass has been filled in the last two weeks, while the country fulfilled two sad historical milestones. For the first time, a president, Michel Temer, was accused of corruption by the prosecution general.

On Wednesday, Luiz Inacio Lula da Silva became the first ex-president to be sentenced to prison for money laundering and corruption: nine and a half years in prison, according to a ruling that may be appealed to a second instance while he remains at large.

Lula and Temer cannot be more enmity politically, but both reacted just like their legal problems:

“This sentence seeks to bring me down,” protested the first, while questioning the authority of the judges: “Only the Brazilian people can decree my end.”

Temer also, the first time that he spoke in public after knowing the accusations against him by supposed treats of favor and bribes, jumped to the offensive:

“This is an attempt on our country. I will not allow my honor or my dignity to be questioned. I will not flee from battles.”

The president met his threat the next day, when he had to nominate the new attorney general – the current one, Rodrigo Janot, who denounced him, leaves office on September 17.

In Brazil, the president usually respects the name most voted by the public ministry itself. It is a sign of respect for the strength and independence of the institution.

Temer, instead, chose the second most voted person, Raquel Dodge.

The gesture does not change much – Dodge has a great experience fighting corruption – but it was a matter of slapping those who might believe that the country is in the hands of the judges.

Many are of the opinion that Temer also hoped to weaken Janot’s denunciation before it is voted on in Congress on August 2.

If the House approves it, the lawsuit will go to the Supreme Court, which will temporarily dismiss him. And if he finally finds him guilty, he will be permanently removed from the presidency.

Once he is out of the presidency, he would lose his protections and then would have to answer for all the charges prosecutors have accumulated against him.

The only solution for Temer is to solve the accusation in the political arena, at any cost.

The presidency – and the legal immunity it grants – also represents a solution of the desperate former president, Lula da Silva.

Four more sentences still have to be published and it is enough that the second instance finds him guilty in only one of them to be politically disabled and, perhaps, to end up in jail.

The only asset of the leader of the Workers’ Party is to delay the proceedings until August 2018, when the electoral campaign begins. And pray for winning the presidential election.

The panorama could not be more different than what it was for centuries was Brazil.

A place where power and money commanded more than justice, where stealing more is a positive feature to have for a politician, and where the attorney general was known as the one in charge of hiding political and judicial processes against those who stole.

Everything changed in 2003 with the arrival, ironically, of Lula. He doubled the size and resources of the police, who could suddenly take on large operations.

He allowed the public prosecutor’s office to appoint the attorney general. Unified the judiciary, which was dismembered. Lula believed either that he would never be caught, or that if his dealings were known, prosecutors would never move forward with accusations or convictions.

Soon a class pride began to flourish. Apparently, in the middle of all the corruption, there is a characteristic that defines Brazil, crisis after crisis. That is, the independence of its judicial power.

In Brazil, corruption had been embedded in public life for decades. Uncovering it has paralysed everything. Many ask why wasn’t there a prosecutor, a lawyer or a judge who did this before.

While the economy is in crisis, politics revolves around the courts and the people have lost hope that everything will get better when all the culprits are in jail.

“The future is to replace people with institutions and to save ourselves without saviors,” says Ayres Britto, who was a Supreme Court judge appointed by Lula between 2003 and 2012.

Who could the new leaders of Brazil be?

There are no generals or commanders in the clashes between the Brazilian executive and judicial branches, but there are names of their own.

In the country there are very few who do not know Sérgio Moro, the judge in charge of the Petrobras case in the first instance and who -voluntarily or not- embodies the virtues sought by critics of the political class.

Moro is a Harvard graduate, with a doctorate in law, and who has declared to be a slave of the law. He boasts about making temperate decisions respecting the rules of the legal system.

Perhaps because of all this he has found in Lula da Silva – someone pragmatic, cunning and uneducated – the last of his shoe. So famous is the enmity between the two that when the former president was called to testify before Moro last May 10, the meeting was treated as a face-to-face combat between two fighters. Lula made it look more so due to his arrogance, posturing and bravado.

Before the meeting, Judge Moro posted a message on his Facebook page, where he has two million followers. He asked them not to go to the streets to protest against Lula, so as not to create confusion.

This, however, summoned thousands of union members and the corrupt Workers’ Party who crowded the entrance of the courts at the end of the testimony and turned the event into a rally. Laws and street, two ways to win the same game.

Brazil’s president, Michel Temer, has recently been seen with the Attorney General, Rodrigo Janot, a veteran of the legal field in public and private positions.

Many believe that the move he is making with President Temer in denouncing him for receiving bribes is completely political. In fact, he still has indications to denounce him for two more charges, obstruction of justice and active corruption, but instead Janot is waiting for him to exhaust his political capital in Congress.

A new future would be one where the corrupt political class is behind bars. Of course, that would raise the question of who will lead the country, since Brazilians can’t even find their noses in from of them.

Will the future leaders be judges or former judges? They certainly are now.

"Brazil Now Facing A Major Crisis": Police Says It Has Evidence President Temer Received Bribes

Update: and right on time, the Brazilian house speaker confirmed that the worst case scenario - for Temer - is on the table:

• BRAZIL NOW FACING MAJOR CRISIS: HOUSE SPEAKER MAIA


• BRAZIL JUDGE REJECTS TEMER CRIMINAL COMPLAINT VS JBS’S BATISTA

* * *

Almost exactly one month after Brazil"s stock market crashed, and the Real plunged after the country"s never-ending political drama made a triumphal return following accusations that president Michel Temer had encouraged a "hush money" bribe to former House Speaker Eduardo Cunha in return for not getting dragged into the Carwash scandal, on Tuesday afternoon, Brazil’s federal police force said it has found evidence that the embattled president received bribes to help businesses, Brazil"s O Globo reported.

Investigators said in a preliminary report published Tuesday by Brazil’s top court that Temer deserves to be investigated for passive corruption, a process that would likely culminate with his impeachment. Temer has denied any wrongdoing and has already pledged not to resign.

The news comes hours after a defiant Senate committee voted down a key anchor of Temer"s proposed reform platform, the landmark labor reform bill, whose passage in the lower house in April prompted widespread protests by labor unions who are against the proposed legislation which would abolish mandatory payment of union dues by Brazilian workers. The vote was seen as a blow to the government, amid other political noise embroiling President Temer.

Even before today"s police announcement, Brazil"s Attorney General Rodrigo Janot said last month there were enough preliminary indications of wrongdoing for Temer to be investigated for corruption and obstruction of justice. And if Brazil’s top prosecutor agrees with the federal police recommendation, Congress will decide whether Temer should be investigated by the country’s Supreme Court. The court is the only body that can formally investigate the president.

If two-thirds of Congress votes to allow the investigation, Temer would be suspended from office pending trial, suffering the same fate as his predecessor Dilma Rouseff whose vice-president Temer was originally, and eventually managed to overthrow with an elaborate plot "exposing" her corrupt activities. Karma, it turns out, is a bitch in all jurisdications, including Latin America.

Brazilian Real Tumbles After Senate Rejects Landmark Labor Reform Bill

Brazil"s landmark labor reform bill, intended to relax the country"s restrictive labor laws and a main plank of embattled President Michel Temer"s efforts to bolster investment and pull the economy out of its worst recession ever and widely seen as the country"s second most important reform agenda after the Pension bill, was unexpectedly rejected by a special committee in Brazil"s senate, with 10 votes against it, 9 in favor and 1 abstention. 

Prior to the vote, local newspaper O Globo reported that the government believed text of the labor reform will be approved in Senate’s Social Affairs Committee in a tight vote of about 11 in favor vs 8 against, setting market expectations.

In immediate kneejerk reaction, stocks dropped as much as 1.4%, while the BRL is leading declines among major currencies, down 1.6%, from drop of ~0.8% before vote. The committee was 2nd of the 3 bill had to clear before going to Senate floor vote. The failure to pass, strikes a major blow to Temer"s reform policy and puts into question whether Brazil will be able to "sell" its economic improvement to potential investors.

According to Citi, the rejection could result in the reform effort being delayed. However Committees have no terminating character, Senate general secretary Luiz Fernanddo Bandeira de Mello noted. The bill will now go to the Senate Constitution and Justice Committee and then the Senate floor"s assessment.  Nevertheless the rejection is likely to be a further blow to the government, amid other political noise embroiling President Temer.

The labor bill is fiercely opposed by unions because it would abolish mandatory payment of union dues by Brazilian workers.

In April, Brazil"s lower house approved the labor bill, seen as a barometer of support for Temer, two days before a national strike and demonstrations called by labor unions and leftist parties to protest Temer"s reform program that they say undermines workers" rights to the benefit of business interests. Backers of the labor bill say it will modernize employment rules that date from the 1950s and encourage investment by lowering labor costs for businesses.

If it had been passed by the Senate, the measure would relax restrictions on temporary workers, introduce guarantees for outsourced work and let collective bargaining agreements between unions and employers override some rules of the labor code. Now that it has failed to gain passage, Temer"s entire economic agenda is suddenly in limbo.

The Mafia that Governs Brazil

Brazilian President, Michel Temer has been implicated in a new bribery scandal.

I recently read a Facebook post from a person who rightfully pointed out that Brazil is far from being a democracy. In fact, the user clarified that the country has never been a democracy, at least not in the last 40 years.

He begins his post with the following thought: “Today it is difficult to disassociate ourselves from politics. I’ve found out about the size of the irony that we Brazilians are in ..” He then uses irony himself to refer to the situation the country is in and how people were indoctrinated into believing that democracy reigns all over. “The generation of which I am part of was born in a democratic environment. What a good thing. A new constitution … How lucky we are! Brazil is a “young democracy”. So I heard, so they told me. I, innocent, believed. We, the innocent, believed.

The problem is that Brazilians are not innocent. They were lied to all right, but that was many years ago. Today, they are innocent no more, yet they continue to allow a cabal of oligarchs, both foreign and local to determine what their lives should be like. It is not a Monarchy as the author of the post claims, but a Mafia. It is the same kind of Mafia that governs over every single western country today.

Mr. Dobrinsky says that the class of people that dominate politics in Brazil are a sort of nobility, but he forgets to point what is obvious: The people are to blame for everything that has happened in the country since it became a democratic republic. It is the people who elect their representatives. How and why do people elect representatives who destroy a country like Brazil? The answer is due to ignorance.

There are two other horrific details that seem to be out of the public discourse of those who complain about their government here in Brazil. Firstly, most people understand the situation and do nothing to change it, and secondly, people actually embrace the current state of disgrace the country is in.

The highest degree of corruption in the history of the country is not enough to light up a fire cracker in the heart of Brazilian people, who limit their actions to innocuous street protests that do little or nothing to change things. In fact, that very same degree of corruption is brought and adopted into their own lives.

Brazil’s problem is not that people are ignorant, but that people are willfully ignorant. They learn to be ignorant from very early in their lives which is why most people still support the “jeitinho brasileiro” or the Brazilian way of doing things. That behaviour exists in the minds of members of the political mafia as much as in that of the homeless and everyone in between. It is part of people’s fabric.

There are three clear examples of how deeply rooted corruption and complacency are in the Brazilian way of life. All Luiz Inacio da Silva, Dilma Rousseff and the current president Michel Temer are being investigated by a special court due to their apparent involvement in massive corruption scandals with tentacles extending to other countries in Latin America. Yet, all that Lula, Dilma and Temer show in public is arrogance, hubris, bravado.

Just this week, president Temer was officially put under investigation after tapes surfaced where he asks for bribes to keep a fellow mafia member quiet about the scandals he appears to be involved in.

The accusations are stacked against Temer, battered by evidence and judicial statements filed to incriminate him by the owners of one of the country’s main business groups.

But Temer not only refuses to resign but has decided to move to the attack. He claims that the evidence against him is “fraudulent” and in a message to the nation urged Saturday to the Supreme Court to suspend investigations for obstruction to justice, passive corruption and criminal organization. As expected, Temer showed no proof to back his claims.

Anyone would think that with the current state of affairs, Brazilians would be at least populating the streets as they did against Rousseff, but nothing even remotely close has taken place.

Meanwhile, resisting at all costs seems to be the slogan of the Brazilian president, despite the fact that the situation for him only worsens as the days pass. Temer is becoming a new Nicolas Maduro.

The disclosure last Friday of the judicial statements of the entrepreneurs who incriminate Temer, the owners of the meat empire JBS, brought devastating consequences.

The managers describe a systematic payment of illegal donations, negotiated directly with Temer over the last 10 years, totaling up to 4.7 million reals.

The maneuvers reported by the entrepreneurs took place even while the country was in the midst of the investigations of the Lava Jato case.

They assert that a few months ago an intermediary of Temer demanded a commission of 5% for him to obtain a favourable decision by the organization that oversees free market competition through which JBS would obtain a profit of 200 million reals a year.

Going back a few years, the informers tell how Temer managed, as vice-president of the country, to receive a monthly payment of 100,000 reais for an ally of his who had just left his position as government official.

Another account tells about how Temer made a donation of another 15 million reais to the parties that were allied with him in the 2014 election campaign and how he decided to keep one million for himself.

To make matters worse, the communication group O Globo, until now one of Temer’s greatest cheerleaders, is beating mercilessly on the new details and on Friday published an editorial demanding his resignation.

Although Temer still has the bulk of his parliamentary support, which includes his own political army, the Party of the Brazilian Democratic Movement (PMDB), and the Brazilian Social Democrat Party (PSDB), the drip of desertions among its allies is growing.

On Saturday, the Brazilian Socialist Party (PSB) withdrew its support. It is increasingly doubtful that he will have enough strength to approve the reform he has been most committed to and the one that most demand for the markets: the reduction of pensions.

For the first time since the start of the new political crisis, former president Luiz Inácio Lula da Silva went on stage to demand Temer’s resignation and to have early elections.

Lula is the most interested in immediate elections because he leads all the polls and could go to the polls before the five legal proceedings, opened against him also for corruption, are concluded.

The former president is also not free from the confessions of the owners of JBS, who claim that they delivered 150 million reales in illegal donations to Lula’s Workers’ Party (PT).

In the midst of this flood of new corruption scandals, Temer decided to address the nation again on Saturday not only to deny all charges but to appear as the “moralizer” of Brazilian public institutions.

He warned that the opening of the judicial investigation compromises the economic recovery of Brazil, after two years of hard recession, since he placed the country in what he himself admits as “a serious political crisis.”

Temer’s strategy is to invalidate one of the main tests against him, the recording of a conversation he held on March 7 at his official residence with JBS owner Joesley Batista.

From the content of that meeting, the Attorney General of the Republic, Rodrigo Janot, deduced that the president gave his acquiescence to the payments that Batista was allegedly making to buy the silence of former President of the Chamber of Deputies, Eduardo Cunha, a former political ally of Temer sentenced to 15 years in prison for corruption.

The newspaper Folha de São Paulo has published an expert study that says that the recording is edited and has up to fifty cuts. Temer clings to that to claim that the new “clandestine recording” was “tampered with.”

The newspaper Folha de São Paulo is part of a group known as the Folha Group, a conglomerate that also controls UOL (Universo Online), the leading Internet portal in Brazil.

Brazil's President Tells Supreme Court To Suspend Corruption Probe Of Brazil's President

In a move that will surely light the proverbial lightbulb over Donald Trump"s head, Brazilian President Michel Temer, having been officially dragged into Brazil"s massive corruption scandal after a record emerged in which he urged the payment of "hush money", said on Saturday he would ask the Supreme Court to suspend its investigation into allegations he was also involved in the carwash corruption scheme, vowing to remain in power.

Speaking during a televised address on Saturday afternoon, Brazil’s deeply unpopular president, who replaced a just as deeply unpopular president last year when Dilma Rouseff was impeached, claimed the recording that implicated him in the scandal was doctored and said he would file a petition with the Supreme Court to suspend the investigation until it could be verified, the WSJ reported.

In the recording cited by Temer, which unleashed a historic crash of the Brazilian stock market and currency on Thursday when news of Temer"s involvement broke, the president can be heard chatting with Joesley Batista, chairman and heir of the beef-and-chicken JBS empire, apparently him his approval to pay the jailed former speaker of the House Eduardo Cunha - the man responsible for Dilma Rouseff"s ouster last year - to buy his silence. Batista, who made the recording and gave it to prosecutors in hopes for prosecutorial leniency against JBS, said the recording wasn’t edited.

“Our country will not go off the rails—I will continue at the front of the government,” Mr. Temer said in his latest defiant speech about the allegations.

To simplify: Brazil"s president just told Brazil"s Supreme Court to suspend its probe of Brazil"s president which would most likely result in Brazil"s president being impeached. Again.

Temer’s statement comes the day after it was revealed that the executives at Brazil’s meatpacking giant JBS told prosecutors they had paid millions of dollars in bribes to the president and his predecessors, Dilma Rousseff and Luiz Inácio Lula da Silva. In documents released by the country’s Supreme Court Friday, JBS executives told prosecutors the company had paid a total of $123 million in bribes to the country’s politicians over recent years, including payments of $4.6 million to the president.

In his speech on Saturday, Temer immeiately attacked JBS, accusing its executives of “damaging Brazil.” Ironically, in a attempt to drag down JBS with him, Temer also highlighted reports that JBS made money from the latest scandal by buying large amounts of dollars before the news broke. The Brazilian real plunged in value against the dollar on Thursday, the first day of trading after a report about the recording was published.

On at least one thing Temer may be right: the alleged incident involving JBS insider trading is perhaps just as amusing as Temer telling the court to stop probing him. On Friday, Brazil"s regulator said it launched probes against JBS - i.e., the company at the heart of the latest and greatest Brazilian scandal - and other companies controlled by J&F Investimentos to investigate suspicious trades made before Brazil"s markets crashed after the revelation of a plea deal by the company"s top executives.  In a statement late on Friday, the regulator CVM said it is investigating "signs of possible insider trading" of foreign exchange futures, derivatives and JBS stock ordered by meatpacker JBS SA, Banco Original SA and FB Participacoes SA, Reuters reported. The regulator is also examining the sale of shares in the company by its controlling shareholders and subsequent acquisitions by the company´s treasury.

The probe emerged after Brazil"s Valor Economico reported on the same day that JBS and other companies owned by the Batista brothers bought over $1 billion in U.S. dollar contracts in the local market hours before the plea deal news broke.

In other words, the Batistas are accused of going long the dollar in Soros-sized amount, and shorting their own stock, in frontrunning the market turmoil that they themselves would unleash just hours later after news of the plea bargain and Temer"s involvement emerged!

Not even Brazilian telenovellas have this much drama and intrigue, let alone hubris...

Predictably, JBS said denied everything and on Friday said any trades made this week were consistent with the company"s strategy of hedging its large dollar-denominated debt. Amusingly, the company said the recent currency swings could have caused more than 1 billion reais in losses. It has yet to be discloed what gains the "currency  swings" generated instead as a result of the corrupt company"s insider trading, pardon hedging. The real fell 8 percent against the U.S. currency on Thursday, sustaining the largest losses since the country devalued its currency in 1999.

Meanwhile, taking a page out of the Venezuela playbook, protests are planned across Brazil’s major cities on Sunday against Temer, whose popularity rating was less than 9% before the latest scandal broke.

Somewhere, Donald Trump is furiously taking notes.

Unprecedented Corruption Among Brazil's Top Politicians Revealed In Unsealed JBS Plea Bargain

Recall that behind the latest political scandal to grip Brazil, in which president Michel Temer was accused of paying hush money to the jailed former House speaker, Eduardo Cunha (who was responsible for the impeachment of Temer"s predecessor Dilma Rouseff) to keep him from dragging Temer down as well, and which yesterday led to historic losses for the the Bovespa, was a plea bargain by the top executives of Brazil"s meatpacking giant JBS, Joseley Batista and his brother Wesley, which among other things, included an alleged recording of a phone conversation in which Batista told Temer he was paying Cunha to remain silent, to which the president was recorded saying, "You need to keep that up, okay?"

Batista and Temer

Moments ago, Brazil"s O Globo newspaper reported that the latest episode in Brazil"s epic political corruption saga has been unveiled, and two things emerged. First, president Temer is under now officially under investigation for corruption and obstruction of justice.

Second, and more important, the contents of the JBS plea bargain testimony were disclosed, courtesy of Reuters, and they reveal corruption so pervasive that virtually every single current and past top politician has been implicated. Here are the details:

• JBS PLEA-BARGAIN TESTIMONY INDICATES BRAZIL PRESIDENT TEMER ALLEGEDLY RECEIVED 15 MILLION REAIS IN BRIBE IN 2014


• JBS PLEA-BARGAIN TESTIMONY SAYS COMPANY PAID BRIBE TO TEMER TO END PETROBRAS MONOPOLY ON NATURAL GAS


• JBS PLEA-BARGAIN TESTIMONY SAYS EX PRESIDENT LUIZ INACIO LULA DA SILVA RECEIVED $50 MILLION IN BRIBES IN OFFSHORE ACCOUNT


• JBS PLEA-BARGAIN TESTIMONY SAYS EX PRESIDENT DILMA ROUSSEFF RECEIVED $30 MILLION IN BRIBES IN OFFSHORE ACCOUNTS


• JBS PLEA-BARGAIN TESTIMONY INDICATES JOESLEY BATISTA PAID 30 MILLION REAIS FOR EX PRESIDENT DILMA ROUSSEFF"S 2010 CAMPAIGN


• JBS PLEA-BARGAIN TESTIMONY SAYS PAID SUSPENDED SENATOR, EX PRESIDENTIAL CANDIDATE AECIO NEVES BRIBE IN 2014 TO FAVOR COMPANY


• BRAZIL PROSECUTORS SAY JOESLEY BATISTA"S TESTIMONY INDICATES HE PAID EX HOUSE SPEAKER CUNHA MONTHLY BRIBES WITH TEMER"S BLESSING

Some more from Reuters:

Brazil"s Supreme Court released plea-bargain testimony on Friday that includes accusations President Michel Temer received 15 million reais ($4.6 million) in bribes in 2014 before he took office from executives of meatpacking giant JBS SA. 

The testimony also claims former President Luiz Inacio Lula da Silva received $50 million in bribes in offshore accounts from JBS, while ex-President Dilma Rousseff took $30 million in bribes in offshore accounts.

If true, the plea testimony implicates virtually all top Brazilian politicians - from both the current and previous administrations - who have now been thrown under the bus for corruption and bribery, which while no longer surprising in all matters Brazilian, prompt one to ask: is there any politician left in Brazil who is clean "enough" to take over the presidency without fears of compromising recordings emerging just months if not weeks later, resulting in another political scandal and more chaos in the biggest Latin American nation.