Mensalao

January 2, 2015 By Fausta

Brazil: Dilma’s shaky inaugural

The WSj writes on Dilma Rousseff’s second inaugural. Brazil Leader Starts Term on Shaky Ground
President Dilma Rousseff Promised to Fight Corruption and Fix the Economy During Her Inauguration

After being in office for four years, the numbers are not good:

In an inauguration ceremony that was upbeat but drew sparse applause and little spontaneous celebration by her supporters, Ms. Rousseff extolled her legacy of poverty reduction while outlining a vision to get Latin America’s largest economy back on track.

“We will prove that it is possible to make adjustments to the economy without repealing rights that have been won or betray social commitments,” she said in a speech in Brazil’s Congress attended by cabinet members, foreign dignitaries, allied lawmakers and other officials.

Her pledge came as Brazil confronts flat growth, stubbornly high inflation, ballooning debt and a potentially explosive corruption scandal at state-controlled oil giant Petróleo Brasileiro SA, or Petrobras.

Petrobras is key:

But the darkest cloud on the horizon for Ms. Rousseff might be the fast-moving corruption scandal at Petrobras.

Brazilian prosecutors allege that executives at Petrobras conspired with construction companies to inflate the cost of contracts, skimming off as much as $1.5 billion, by the estimate of Brazil’s budget watchdog, to enrich themselves while funneling kickbacks to Ms. Rousseff’s Workers’ Party and its allies.

Ms. Rousseff hasn’t been implicated in the scandal, and leaders of her party have repeatedly denied allegations of involvement. Police have already filed charges against 36 suspects, including two former Petrobras officials.

There are two things to bear in mind:
1. The enormous amounts of money handled through Petrobras (and the temptation/opportunities for corruption)
2. Brazil’s antecedents when it comes to scandals and prosecutions

Related:
Blast from the past: The Economist explains What is Brazil’s “mensalão”?

November 14, 2013 By Fausta

Brazil: “Mensalão”s must serve their sentences

The Mensalão trials convicted 25 people over a scheme to pay opposition politicians 30,000 reais (around US$12,000 at the time) every month in order to vote for legislation favored by then-president Luiz Inacio Lula da Silva. “Mensalão” means “big monthly allowance”, and it was. The scandal burst into the scene in 2005.

Folha de Sao Paulo outlines how the key members of Lula’s party, Partido dos Trabalhadores (PT) channeled funds to Marcos Valério Fernandes de Souza’s ad agencies that had government contracts, funneling the payments through the Banco Rural.

38 people were accused of corruption, fraud, conspiracy, tax evasion, and money laundering.

The trials also brought up charges of illegal campaign contributions from Cuba and the FARC, but nothing much came from those allegations.

Lula’s own chief of staff, Jose Dirceu, was sentenced to 10 years and 10 months, while Lula to this day insists that he knew nothing.

Yeah, right.

So far, no one has served time in prison.

As you may recall, the convictions were appealed. Back in September I predicted that would take years, but Brazil’s Supreme Court has now upheld the jail terms of 23 out of the 25 people sentenced:

Brazil upholds corruption jail terms
Brazil’s Supreme Court rules that most of the 25 people convicted in the country’s biggest corruption trial should start their prison sentences.

Folha de Sao Paolo, which first uncovered the story, has extensive reports (in Portuguese) on the trials. So far, Dirceu has not turned himself in to the police, which in turn awaits the court orders from the Supremo Tribunal Federal (STF) (Federal Supreme Court) to jail the people involved.

September 19, 2013 By Fausta

Brazil: “Mensalão” vote-buying convictions to be appealed

Their lawyers will be able to put their kids through Princeton University; heck, the lawyers will have enough money left to retire in Princeton, if they ever get to retire! This is going to be drawn out for decades:

Brazil Court Allows Corruption Case Appeals
Decision Could Lead to Lengthy Retrials

Brazil’s Supreme Court voted Wednesday to reassess the landmark convictions it handed down against a dozen defendants found guilty last year of participating in a vote-buying scheme that rocked the government of former President Luiz Inácio Lula da Silva.

The 6-5 vote allows 12 of the 25 defendants in the case, including Mr. da Silva’s once-powerful chief of staff José Dirceu, to appeal parts of their prison sentences, which could open the door to lengthy retrials. Mr. Dirceu maintains his innocence and says he is a target of political retribution.

The decision could send shock waves through a country that has long struggled with corruption, and where many held up the court’s earlier convictions of the defendants as a sign of change. The cash-for-votes scandal, dubbed the Mensalão, or ‘big monthly payoff’, resulted in Brazil’s biggest-ever political corruption trial.

Instead, the retrials now risk becoming a symbol of the inability of Brazilian prosecutors to make high-profile corruption convictions stick, said José Garcez Ghirardi, a professor of political theory and law at the Fundação Getúlio Vargas law school in São Paulo.

As I had posted a while ago, no one has served time on these charges.

Lula himself was not implicated in the case and has denied any knowledge of the scheme, so don’t be surprised if he runs again.