Corruption and Brazil’s Political Crisis

      On May 24th, tens of thousands of protesters marched on the Brazilian Congress demanding the resignation of President Michel Temer and an end to his austerity measures. He has recently taken power, having engineered the removal of Workers Party (PT) president Dilma Rousseff (2011-2016). The increasingly violent unrest was also fueled by revelations of corrupt practices on the part of Temer, videotaped paying off a witness in one of the country’s worst corruption scandals. There are now calls for Temer’s impeachment. The accusations against the president, however, are only the most recent manifestation of ongoing political upheaval over widespread corruption, involving most of the country’s political class and powerful business leaders. 

      While corruption is not new to Brazil, one might ask why it has become such a central issue right now. Is it because corruption has become more widespread? Has there been a recent political awakening on the part of the Brazilian public, rendering corruption far less tolerable than in the past? Shouldn’t electoral democracy operate to reduce corruption? 

      To address these questions, it is helpful to bear in mind that corruption involves two parallel processes: the desire of political elites to offer material rewards in exchange for certain behaviours (usually political support), and the willingness (even demand for) illicit access to government resources on the part of various societal actors. The expansion of corruption also requires the availability of government resources. The commodity boom facilitated the latter and as the following analysis will show, Brazil had all of the other essential ingredients in spades. 

Democratic Politics and Corrupt Practices

 Brazilian Congress

Brazilian Congress

      Under certain circumstances, electoral democracy expands the opportunities and incentives for corrupt practices. Countries like Brazil, which experience an extension of the franchise in contexts of high levels of deprivation, encounter intense pressures on politicians to deliver material improvements. If competition among contenders for political office is intense but resources and counter political pressures do not allow for the provision of universal benefits, there is a strong incentive for politicians to provide selective material rewards (through what is known in the literature as “clientelist” relationships) directly to voters and to sub-elites capable of bringing in political support. If there is a strong and independent state bureaucracy, established prior to the extension of the franchise, and one that that has been able to ensure equitable access of the public to essential services, then this scenario can be avoided. However, this has not been the case for Brazil, or for Global South countries in general. Meanwhile, poverty and deprivation is a strong incentive for people to trade their political support for some type of material reward. Vote buying has been a troublesome feature of the Brazilian political landscape since the transition to civilian rule and electoral democracy in 1985, generating a major political scandal in 2012. Corrupt political practices at the level of the individual voter establishes public acceptance of the exchange of material rewards for political support.

      Brazil’s deeply fractured politics at the national level adds further to the inclination of politicians and government officials to engage in corrupt practices. There is a rich political science literature on the questionable practices engaged in by political elites in deeply fractured societies, struggling to maintain themselves in office. In Brazil, this struggle is particularly difficult as the disagreements among politicians are profound. Brazil, described as the most “politically fragmented countries in the world”, has some 28 political parties in its Congress today, spanning the full gamut of the political spectrum. The Workers Party, the party of Presidents Lula and Rousseff, had only 11.5 percent of congress people in 2014.  Hence, coalitions are mandatory and there is a strong incentive for the government to knit together support by offering payments to congress members. Another recent scandal involved the PT government funneling money from public companies to members of Congress in exchange for voting with the government of President Lula (2005 to 2011).

The Role of the Greedy (and Powerful) Private Sector

      The worst corruption scandals, however, involve interchanges between politicians and members of the private sector. The Brazilian private sector has always been very powerful and has become even more so with its expansion internationally. Staying in power in Brazil (and elsewhere in Latin America) means maintaining business confidence. Indeed, Brazilian politicians are not in a position to discipline the country’s powerful private sector, which will undoubtedly put up stiff resistance to the dismantling of existing questionable practices. 

 Norberto Odebrecht, founder of Odebrecht

Norberto Odebrecht, founder of Odebrecht

      The Workers Party sought to build an alliance with a portion of the private sector, a group generally highly skeptical of the party’s social welfare objectives. Unfortunately, the PT built this alliance in the tried and true Brazilian fashion. In 2014, the investigation known as Operation Lava Jato (Car Wash), uncovered the biggest corruption scandal in Brazilian history. Heads of the country’s large construction firms were found to have obtained overpriced contracts with the state petroleum company, Petrobras, by bribing the company’s top employees. Politicians also received kickbacks in return for giving out Petrobras jobs. Some 86 politicians, of all political parties, and businessmen have already been convicted of crimes tied to the Petrobras affair. The powerful construction company, Odebrecht, has been a central actor in recent corruption revelations, having received lucrative government contracts and generous government financial support for the expansion of its international operations. In return, Odebrecht was the PTs biggest campaign contributor. The most recent scandal involves the Brazilian meatpacking company, JBS, which bribed Brazilian politicians, including current president Michel Temer, in exchange for taxpayer subsidized loans that have facilitated its international expansion and its enormous profits.

Economic Deterioration and Corruption as a Political Weapon

 Michel Temer and Dilma Rousseff in Happier Times

Michel Temer and Dilma Rousseff in Happier Times

      Brazil’s corruption scandals have emerged in a context of sharp economic deterioration involving a decline in commodity prices, a rise in unemployment, and cutbacks in social programs. These scandals also emerged as the PT government garnered increasing and substantial political opposition from those who wanted the government to adopt a more neoliberal policy direction--now that the PT has been removed from the presidency, Brazilian policy has taken on a renewed orthodox neoliberal turn. Another essential ingredient of this context was the fact the PT, particularly during Rousseff’s stint in power, did not have the backing of the Brazilian mainstream media, which increasingly focussed on the thievery of the PT, ignoring the widespread nature of corruption. The media also ignored the fact that both Lula and Rousseff had attempted to institute measures to stem corruption. President Lula created the General Controller of the Union, a cabinet-level entity responsible for combatting and preventing corruption and granted more autonomy to the federal police to rout out corruption. Indeed, corruption charges increased substantially during the years the PT was in power. The fact that President Rousseff’s refusal to curtail the Car Wash corruption investigation was the incident that instigated her impeachment is another salient aspect of recent events that has been largely ignored by mainstream media. Arguably, the PT governments of Lula and Rousseff did not do enough to stem corruption. However, a good argument can be made that the obstacles against doing so were substantial. Corruption also appears to have been a convenient issue around which to rally popular opposition to the Rousseff administration. Given the sharp deterioration in economic and social conditions, this was not a difficult task. 

      Many commentators hold out the hope that the apparent rise in Brazilian public opposition to corruption will be instrumental in providing the support needed to tackle this serious problem. However, current protests are not just about corruption; they are also about the current government’s austerity direction. Further, given the deep-seated nature of corruption in Brazil, public protests will probably not be enough to put an end to current practices.