Dilma Rousseff impeachment

Brazil Court to Decide on 2014 Case That Could Remove President Temer

The decision is vital in the political future of Brazil where the prospect of having a second president ousted in one year has generated uncertainty.

Brazil’s President Michel Temer reacts during a ceremony in commemoration of the World Environment Day, at the Planalto Palace in Brasilia, Brazil June 5, 2017. Credit: Reuters/Ueslei Marcelino

Brasilia: Judges on Brazil‘s top electoral court will start deciding on Wednesday whether President Michel Temer received illegal campaign funding in 2014, which could lead to his removal from office.

Temer‘s opponents see a ruling by the court, called TSE, as a way out of the political crisis set off by corruption allegations leveled against the center-right leader, but a decision could take weeks if not months and can be appealed by Temer.

The case was postponed in April to allow for new evidence arising from Brazil‘s biggest ever corruption scandal involving billions of dollars in kickbacks paid by companies to scores of politicians and government officials.

The court‘s decision is key to deciding the political future of Brazil where the prospect of having a second president ousted in one year has generated uncertainty and weakened the Brazilian currency, stocks and bonds in recent days.

Temer, who was the running mate of leftist President Dilma Rousseff and replaced her when she was impeached last year, has said his campaign accounts received no illegal money.

If Temer is removed from office, lower house speaker Rodrigo Maia would take over and Congress would have 30 days to pick a caretaker to lead the country until elections in late 2018.

If Temer is found guilty, he is expected to appeal, which could delay the process for months.

The main ally in Temer‘s governing coalition, the Brazilian Social Democracy Party (PSDB), is waiting for the court ruling to decide whether to abandon Temer‘s government, which would sink his fiscal reform agenda.

The case was filed in 2014 by the PSDB after it lost the election to Rousseff. In final arguments, lawyers for the PSDB called for Rousseff to be condemned but that Temer be absolved.

The electoral court had been expected to blame Rousseff and let off Temer, but that is now unlikely due to recent plea-bargain testimony by executives of giant meatpacker JBS SA and engineering group Odebrecht who alleged they gave illegal funds to his campaign.

Federal prosecutor Nicolao Dino said Odebrecht paid 35 million reais ($10.7 million) in illegal contributions to the Rousseff-Temer campaign and called on the court to annul the ticket.

Temer‘s lawyers argued that plea bargain testimonies where insufficient evidence and the casecould not be extended to target the current president.

Temer has refused to resign since the Supreme Court late last month authorised an investigation against him for alleged corruption, racketeering and obstruction of justice.

The investigation is based in part on a secret recording of a conversation with a JBS executive in which Temer appeared to agree to the payment of hush money to silence a key witness in a massive graft scandal. Temer has denied any wrongdoing.

The political crisis engulfing Temer‘s government deepened on Saturday with the arrest of a close aide, former lawmaker Rocha Loures, who was seen in a police video receiving a bag filled with 500,000 reais ($152,000) in cash.

The Supreme Court has given Temer until Friday to answers questions by federal police on his conversation with the JBS executive and whether Loures was a middleman.

Temer‘s political standing took another blow on Tuesday with the arrest of his former minister of tourism, Henrique Eduardo Alves, for suspected graft in the building of a soccer stadium in northeastern Brazil for the 2014 World Cup.

(Reuters)

Politics, Peace and Promise: Mixed Bag for Latin America in 2016

New governments were voted in, others struggled through crises, some economies recovered and one country inched closer to peace. Next year brings promise to some, stability to others and continued unrest elsewhere.

New governments were voted in, others struggled through crises, some economies recovered and one country inched closer to peace; 2017 brings promise to some, stability to others and continued unrest elsewhere.

Flags of some Latin American countries. Credit: Wikimedia Commons

Recent political events in Latin America have often been categorised in the Western press as the “Death of the Latin American Left” or “Latin America’s Rising Right”, denoting the ebbing of the so-called Pink Tide (a wave of left-wing governments that came to power in the beginning of the 21st century). This was purported to be the case in Argentina, Brazil, Peru and Venezuela.

Tempting as it may be to see these events as part of an emerging regional, or even global, trend marking a preference for right-wing rule, it would be foolhardy to do so. The best explanation for the recent wave of changes is what Harvard professor Steve Levitsky refers to as “desgaste natural” or natural attrition, the political equivalent of the law of diminishing marginal utility – the more you utilise something, the less valuable it becomes over a period of time. This brings about a yearning for change. Such was the case for Argentina, Brazil and Venezuela, where a single party governed the country for 12 years or more. In both Argentina and Peru, the word ‘change’ was in the very name of the party: Cambiemos (Let’s Change) in Argentina and Peruanos Por el Kambio (Peruvians for Change) in Peru. There is a general disdain against the political class in Latin America; according to Latinobarometro, a regional pollster, only 17% of people trust or have confidence in political parties. Additionally, performance rather than ideology continues to determine how people vote in the region. Peru is a perfect example: it is the only country in the world where every election cycle has seen a different party come to power since 2001.

Overall, 2016 has been a mixed bag for Latin America. New governments were voted in, others struggled through crises, some economies recovered and one country inched closer to peace.

Colombia

It was never going to be easy to end a half-century-old war. After the narrowly-rejected plebiscite in October, the government and the FARC passed a revised peace deal through Congress, and received approval from Colombia’s Constitutional Court to fast-track the deal’s implementation. This is good news, but much remains to be done.

Colombian President Juan Manuel Santos, left, shakes hands with FARC rebel leader Rodrigo Londono, better known by his nom de guerre Timochenko, right, as Cuba’s President Raul Castro looks on after the signing of a historic ceasefire deal between the Colombian government and FARC rebels in Havana, Cuba, on June 23, 2016. Credit: Reuters

President Juan Manuel Santos, who was awarded the Nobel Peace Prize earlier this year, has put his legacy at stake. Santos and his Unidad Nacional coalition will face just as much difficulty implementing the deal as they did negotiating it. Will all FARC rebels demobilise and successfully reintegrate into society? How will the government deal with the power vacuum in former FARC-controlled rural areas? Will fellow Colombians learn to accept FARC rebels as neighbours and as political representatives in Congress?

The next year will be key to the success of the peace deal, and will also determine how Colombians vote in the 2018 elections.

Venezuela

It has not been a good year for Venezuela – and unfortunately, 2017 does not look much better. The country is polarised, the economy is in tatters, incidents of violence remain high and basic products are in short supply. Inflation is returning to the three- and four-digit levels of the decada perdida (the lost decade of the 1980s); it is already reported to be 476% and may rise further in 2017.

However, all is not gloomy. The global oil market is slowly reviving and with it so will Venezuela’s economy – given that oil accounts for 96% of all exports.

Demonstrators clash with members of the Venezuelan National Guard. Credit: Reuters

The heart of the problem remains a political deadlock between the Chavistas’ last guard and a fractured opposition. Whether this will reach a denouement in 2017 is anyone’s guess. A number of scenarios could play out – President Nicolas Maduro could stay on to finish his term till 2018; the opposition may force Maduro to resign and call for early elections; another power center from the Chavista camp could replace Maduro; or perhaps, in a stroke of luck for Venezuelans, a resolution can be reached through talks mediated by the Vatican.

Peru

Peruvians saw their closest election till date in 2016, with Pedro Pablo Kuczynski (PPK) winning by a razor thin 0.24% margin. But PPK’s opponent, Keiko Fujimori of the Fuerza Popular (FP) party, rules the roost in the unicameral Congress with 72 of the 130 seats. Even the leftist Frente Amplio has three seats more than PPK’s 17. This obviously causes issues while formulating and passing important legislation.

Peru’s President Pedro Pablo Kuczynski (L) and opposition leader Keiko Fujimori (R) talk to press after a meeting next to Peruvian Cardinal Juan Luis Cipriani in Lima, Peru, December 19, 2016. Credit: Reuters

This also has the potential to derail the government – as the resignation of education minister Jaime Saavedra shows. Saavedra was the only minister retained from the previous administration and had achieved notable progress in reforming the education system. The FP, which opposed Saavedra, forced the PPK-led government into a corner, leaving only two choices: that Saavedra resign, or call for a vote of no confidence, which could result in the dissolution of the cabinet and new elections – a gamble that no president would like to take so early in their term.

We must not read too much into this political tussle: politics is always on edge in Peru. Even so, the county remains socially stable with one of the fastest GDP growth projections in Latin America for 2017.

Argentina

Argentina began teetering back to normalcy in 2016, after President Mauricio Macri took office in December 2015. Some much-needed reforms, such as the lifting of currency controls, were implemented rather quickly. Most people are happy with the change from a decade of Kirchnerismo but obstacles remain. Average annual inflation is high at roughly 40% and GDP is expected to contract by 2% in 2016.

What lies ahead for Argentina? Macri, who belongs to the Argentine equivalent of a family-owned conglomerate like the Birlas or Mahindras in India, will continue to follow a pro-business approach. However, his success will be determined by his ability to negotiate deals with a large opposition.

Brazil

It is said that a week is a long time in politics; Brazil is testament to this.

In about one week, Brazil approved a 20-year austerity package fixing public spending to the inflation rate; ex-president Lula da Silva was named a defendant (for the fifth time) in a corruption case that could taint his candidature for president in 2018; the Superior Electoral Court, yet again, indicated the possibility of removing President Michel Temer from office; and Brazilian conglomerate Obedrecht pled guilty to bribing politicians and will pay a $632-million fine.

Brazil's new President Michel Temer attends the presidential inauguration ceremony after Brazil's Senate removed President Dilma Rousseff in Brasilia, Brazil, August 31, 2016. Credit: Reuters/Ueslei Marcelino

Brazilan President Michel Temer attends the presidential inauguration ceremony after Brazil’s Senate removed Dilma Rousseff in Brasilia, Brazil, August 31, 2016. Credit: Reuters/Ueslei Marcelino

So much has happened that it is difficult to keep up – see for yourself and take the News Quiz: Did It Happen in Brazil or “House of Cards?”

The current situation reminds one of a Brazilian saying: se correr o bicho pega, se ficar o bicho come, roughly translated to mean, damned if you do, damned if you don’t.

Then again, Brazil is such a large country that its economy can recover even amidst such staggering political crises. After two years of contraction (-3.8 in 2015 and -3.6 in 2016), GDP is expected to grow 0.4% in 2017. What’s more, the falling Brazilian Real has rewarded exporters handsomely; Brazil posted its largest recorded trade surplus of $43 billion in January-November 2016.

Brazilians are also yearning for change in the 2018 presidential elections. Time is ripe for an outsider like Marina Silva, but it is too early to call; whoever wins would certainly not have it easy.

Cuba

The death of Fidel Castro, who led Cuba for over half a century, marks the end of an era. Few, if any, in the past century have commanded as much control over a country as Fidel did. He shaped every aspect of local life and even Cuba’s image to the outside world.

Residents wave as the caravan carrying the ashes of Cuba’s late President Fidel Castro arrives in Santiago de Cuba, Cuba, December 3, 2016. Credit: Reuters

Fidel’s brother Raúl Castro announced he will step down as president in 2018; his vice president Miguel Diaz-Canel is expected to take his place. Cuban socialism will certainly go through some gradual but inevitable changes. The reduction in Venezuelan oil shipments (part of a barter-like exchange for Cuban doctors, teachers and the like), the slowing economy and the potential opportunities from an elimination of international sanctions signal at least a partial opening of the economy. The US will also play an important role, though the gains made under US President Barack Obama could stall or be reversed under a Trump administration.

The Castro regime will remain in firm control in 2017. Nevertheless, the post-Fidel era will see numerous changes in the Cuban social, political and economic landscape.

Nicaragua

Nicaragua’s President Daniel Ortega and first lady and vice president-elect Rosario Murillo. Credit: Reuters

Daniel Ortega’s reelection as president in November meant the region saw some political continuity, but it also raised some questions, in no small measure driven by Ortega’s decision to field his wife, Rosario Murillo, as his running mate.

Some have said Ortega’s victory made a “farce of democracy”, particularly because there was no credible opponent. But one only need look at the numbers to dispel this notion – Ortega won 72% of the vote and enjoys a 70% approval rating; his socialist policies are also well accepted. The economy has also grown steadily at an average of 5.16% over the past five years (2011-2015), over double the regional average of 2.08%. We can expect continuity in socio-economic policies in Nicaragua through 2017.

Conclusion

As the year draws to a close, it would be prudent to remember two maxims that continue to describe Latin America.

First, there remains a strong correlation between commodity prices and economic growth in the region. Even though manufacturing and services have grown considerably, commodities like petroleum, copper, soybean, gold and agricultural products continue to be the mainstay of most economies.

Secondly, the changing wave of left- and right-wing governments in Latin America is nothing new, but only part of recurring ideological cycles in the region. Rosario Queirolo, an Uruguayan political scientist, argues that the left and right have alternated in power since 1945, and that the recent ‘pink tide’ only signalled the beginning of another cycle. The lesson? The left and right are here to stay in Latin America.

Hari Seshasayee is a Latin America analyst and tweets at @haricito. Preeti John is assistant editor at The Wire.

Brazil: Michel Temer Heckled and Booed in First Events as President

Protesters jeered Temer as he participated in the county’s Independence Day parade in Brasilia and the opening ceremonies of the Paralympics in Rio de Janeiro.

Brazilian President Michel Temer. Credit:Reuters/Ueslei Marcelino

Protesters jeered Brazil’s new President Michel Temer on Wednesday as he participated in the county’s Independence Day parade in Brasilia and the opening ceremonies of the Paralympics in Rio de Janeiro, his first official events since taking office on August 31.

Protesters at the events and in nearly a dozen other state capitals across Brazil were shouting “Temer Out” and “Usurper”.

Police in Brasilia estimated the number of protesters gathered in the nation’s capital at about 600, relatively small compared with protests that brought millions to the streets on occasion over the last two years of impeached President Dilma Rousseff’s administration.

Despite the early demonstrations, markets have given Temer and his economic team the benefit of the doubt, for now. Brazil’s real and main stock index have gained nearly 3% since Rousseff’s ouster, even as a new corruption scandal hit the government last week.

His team is expected to oversee a recovery of Brazil’s economy, bogged down in its worst recession in 80 years, but economists do not predict a robust turnaround over the next 12 months.

Investors also expect Temer to push through unpopular and difficult reforms of the country’s bloated pension system, burdensome tax code and inflexible labor laws.

A Political Execution in Brazil

Business in the country is unlikely to go back to normal soon. India should closely monitor what happens next since it has a stake in Brazil’s stability and prosperity.

Brazil’s new President Michel Temer attends the presidential inauguration ceremony after Brazil’s Senate removed President Dilma Rousseff in Brasilia, Brazil, August 31, 2016. Credit: Reuters/Ueslei Marcelino

On August 31, Brazil’s Senate voted 61-20 to impeach Dilma Rousseff, who had been suspended since May 12 from her post as president. A second proposal in the Senate failed to get enough votes to ban her from public office for eight years. She is the second Brazilian president to be removed from office, after Fernando Collor de Mello in 1992.

Rousseff’s fate is collateral damage from Operation Car Wash, a judicial investigation over the past two years implicating several political and business leaders who colluded to inflate construction contracts worth billions of dollars in Brazil’s national oil company, Petrobras. Several are already imprisoned or on trial.

On April 17, the lower house of Brazil’s Congress voted to impeach Rousseff for the ‘crime of responsibility’ – concealing the size of the deficit in the budget leading up to the 2014 elections, through loans from state-owned banks and other fiscal manoeuvres. Although technically a violation of the constitution and Brazil’s fiscal responsibility law, it is not an uncommon practice. Rousseff was not tried for corruption.

In a spirited defence over 14 hours on August 29, Rousseff criticised the ‘parliamentary coup’ and illegitimacy of the process. Many of the senators judging her were being prosecuted for corruption or are under a cloud. Her former vice president, Michel Temer, who reportedly fed her to the wolves and took her place in May, was found guilty of violating campaign finance regulations and is barred from public office for eight years, after he completes the current presidential term in December 2018. His party members Eduardo Cunha, former head of the Lower House that commenced the impeachment proceedings against Rousseff, and Renan Calheiros, the head of the Senate, are also being investigated. The impeachment clearly had political motives, as subsequent events revealed.

On October 26, 2014, Rousseff won the second round of her second presidential election by the narrowest margin in modern Brazil’s history – 51.64% against 48.36% for her rival, Aecio Neves of the Social Democratic Party (PSDB). She led a Brazil resurgent from two terms under Luis Inacio Lula da Silva (Lula), her predecessor and mentor.

Twelve years of government by their Partido dos Trabalhadores (PT, or Workers’ Party) boasted an impressive legacy. Over 40 million of Brazil’s 200 million joined the middle class. Cash transfers and other redistributive schemes helped reduce the Gini coefficient from 58.68 in 2003 to 52.7 in 2012, according to the World Bank. Unemployment, at about 5%, was lower than under any of her predecessors. The minimum monthly wage (Brazilian Real 724; then US $304) had increased despite the financial crisis. The number of undernourished Brazilians fell by more than 80% over the previous decade, according to the UN. Then things went wrong.

According to Brazil’s Central Bank, from a peak of 7.5% in 2010, GDP growth shrank to 3.8% in 2015 and will contract 3.5% in 2016 with 6.6% inflation – the worst economic performance in the past 25 years. The fiscal deficit stands at 10.8% and public debt close to 70% of GDP. Although much of this has to do with the global downturn and the fall in commodity prices, Rousseff’s administration has been targeted by business leaders and much of the population, whose expectations have been rising along with their frustration over mismanagement and corruption.

Rousseff, a former guerrilla fighter, had to confront ferocious opposition from the traditional right. The dilemma over continued higher productivity, combined with economic efficiency on the one hand, and greater equity on the other, has marked this Brazilian century.

The PT is in trouble. Even the legendary Lula, touted as the party’s presidential comeback candidate in 2018, has been tainted by corruption scandals and was detained for interrogation by the police recently. Dozens of mayoral candidates have quit the party before the upcoming municipal elections in October. Rousseff’s own popularity has plummeted to around 13%. The coalition painstakingly held together by Lula in Congress has come apart. The possibility of the party winning the next presidential election is remote.

Temer’s Democratic Movement Party (PMDB), seen as centrist without any particular ideology, is tainted. It has allied for now with the principal opposition PSDB, which seeks to return to power. Its leaders too are almost as unpopular. Three of Temer’s ministers resigned, weeks after being sworn in, over allegations of corruption. He stayed away from the closing ceremony of the just concluded Olympic Games in Rio, apprehending political protest.

At the heart of the scandal is Brazil’s tradition of pork barrel politics and crony capitalism. The system worked largely due to the impunity enjoyed by elected representatives who were seldom convicted earlier. The judiciary asserted itself during Lula’s tenure and convicted senior politicians under the so-called Mensalao scandal of 2005, a scheme to bribe opposition politicians to support his government in crucial votes.

The Petrobras scandal began to unravel in 2014 with whistleblowers exposing powerful politicians and businessmen in plea bargains. Rousseff’s impeachment, according to her supporters, was a smokescreen to cover up more revelations and distract attention from the rampant corruption from which virtually no party emerged unscathed.

Business will not go back to ‘normal’ after the Brazilian public has tasted so much political blood. The danger of public agitation influencing political and legislative reform is very real. Brazil has already introduced crucial campaign finance reform, but more is required and Temer’s capacity to carry this through is moot.

For now the government is concentrating on bringing the economy back on the rails. Fiscal austerity has to be balanced with the need to continue the previous regime’s social programs. As Lula’s central bank manager, current finance minister Henrique Mierelles helped turn the economy around in 2003. Petrobras is being restructured.

Foreign policy is taking a turn to the right. Foreign minister Jose Serra (PSDB), has jettisoned Brazil’s camaraderie with left-wing regimes. Brazil led its Mercosur colleagues – Argentina, Uruguay and Paraguay – in refusing to allow Venezuela to assume the presidency of the bloc this year. Venezuela withdrew its ambassador to Brazil immediately after the impeachment, as did Ecuador and Bolivia. Cuba and Nicaragua denounced the ‘coup’. They are all members of the left-wing Bolivarian Alliance of the Americas, or ALBA, wooed by the PT regime but not a priority now.

Temer took off for the G20 Summit in China soon after being sworn in, with a massive business delegation and several agreements in his briefcase. He will probably attend the BRICS Summit in Delhi in October. Brazil is also Mercosur’s interlocutor on the 2007 preferential trade agreement with India. Wish lists were exchanged in July to expand it from 450 to around 3000 tariff lines on both sides.

India has a stake in Brazil’s stability and prosperity. The strategic alliance, sealed during the Lula era, has endured and grown in areas like aerospace, energy, agriculture, apart from vibrant commercial relations. Both make common cause in most international forums and jointly seek permanent membership of the UN Security Council. What happens in Brazil matters and bears close monitoring.

Deepak Bhojwani is a retired diplomat and former Consul General of India in Sao Paulo, Brazil.

Votes Mount Against Brazil’s Rousseff at Impeachment Trial

If Rousseff is convicted, her conservative former vice president, Michel Temer, will lead the nation until the next presidential elections in 2018.

Brazil's President Dilma Rousseff reacts during the signing ceremony of the Civil Procedure Code, at the Planalto Palace in Brasilia March 16, 2015. Credit: Reuters/Ueslei Marcelino

With a final vote expected to convict her today, Rousseff’s dismissal would confirm a shift to the right and the end of 13 years of leftist Workers Party rule that helped lift some 30 million Brazilians out of poverty. Credit: Reuters/Ueslei Marcelino

Brasilia: Votes piled up against President Dilma Rousseff at her impeachment trial on Tuesday as opponents made final arguments for her removal, not just for breaking budget rules, but for plunging Brazil into a political and economic crisis.

Rousseff, suspended from office in May pending the Senate trial, is charged with spending public funds without congressional approval and illicitly using money from state banks to boost public works to favor her 2014 re-election, an accounting sleight of hand employed by many elected officials.

Several senators who had not previously declared their votes, including two from the northern state of Maranhao, shifted decisively against Rousseff on Tuesday, according to four sources familiar with their deliberations.

In testimony to the Senate on Monday, the 68-year-old leader denied any wrongdoing and said the impeachment process was aimed at protecting the interests of the economic elite in Latin America’s largest country.

However, lawyer Janaina Paschoal, the author of the impeachment request against Rousseff, told senators in her closing arguments that the trial should focus on the corruption and economic turmoil under Rousseff’s government.

“The world needs to know that we are not just voting about accounting issues,” Paschoal said, arguing along with most senators that Rousseff’s alleged budget crimes had contributed to a sharp downturn in Latin America’s largest economy.

If Rousseff is convicted, her conservative former vice president, Michel Temer, will lead the nation until the next presidential elections in 2018.

Temer, 75, has vowed to pull the economy out of its worst recession since the 1930s and implement austerity measures to plug a growing budget deficit that cost Brazil its investment-grade credit rating last year.

His main challenges, if confirmed as president, would include pushing an unpopular spending cap through Congress and balancing overdrawn government accounts without resorting to tax increases.

His government could also risk being caught up in an investigation over kickbacks at state oil company Petrobras that has ensnared dozens of politicians in the coalition that backed Rousseff.

The scandal, which has also tarnished Temer’s PMDB party, could hobble his efforts to restore economic confidence and political stability.

While senators disagreed on the merits of the accounting charges brought against Rousseff, most who took the podium held her responsible for Brazil’s crisis and said she must go.

“Maybe most Brazilians can’t explain the accusations, but they can tell you the consequences they felt in the flesh, through unemployment and years of recession,” said senator Cassio Cunha Lima.

For the second night in a row, Rousseff supporters marching in downtown Sao Paulo against her impeachment clashed with police who fired tear gas cannisters to disperse the crowd.

Final vote on Wednesday

The final vote in the trial, which paralysed Brazilian politics for the last nine months, is expected on Wednesday, according to Supreme Court Chief Justice Ricardo Lewandowski, who is presiding over the process.

At least 66 of the chamber’s 81 senators registered to speak in the final debate. Lewandowski said he expected to end the session late on Tuesday and resume on Wednesday morning.

Temer, interim president since Congress opened impeachment proceedings in mid-May, is so confident of the trial’s outcome that he has planned an address to the nation on Wednesday.

He then plans to fly to China for a summit of the G20 group of leading economies, hoping to secure pledges of trade and investment, his aides say.

Workers Party senator Angela Portela said it was a sad day for Brazil’s democratic system because an elected president was being unjustly impeached. “This is not a fair trial. It is a political lynching,” she said.

Rousseff’s popularity fell into single figures this year, partly because of the massive graft scandal at Petrobras and partly due to a deep recession that many Brazilians blame on her government’s interventionist policies.

In an emotional speech on Monday, Rousseff compared the trial to her persecution under Brazil’s 1964-1985 military dictatorship, when she was tortured by security services as a member of a leftist urban guerrilla group.

If the Senate convicts Rousseff, she would become the first Brazilian leader to be dismissed from office since 1992 when Fernando Collor de Mello resigned just before imminent impeachment for corruption.

Now a senator, Collor de Mello reminded his peers he had been acquitted by the Supreme Court and said he backed the removal of Rousseff to end the crisis she had led Brazil into.

(Reuters)

Brazil One Step Away From a Real Coup D’Etat, Says Defiant Rousseff

Rousseff has denied any wrongdoing and compared the impeachment trial to her persecution during Brazil’s 1964-1985 military dictatorship.

People walk next to an official photo of Brazil’s suspended President Dilma Rousseff, at a camp in support of Rousseff, in Brasilia, Brazil, August 28, 2016. Credit: Reuters/Bruno Kelly

Brasilia: A defiant President Dilma Rousseff warned on Monday that her conservative opponents were trampling on Brazil’s democracy by using trumped-up charges to oust her and roll back the social advances of 13 years of leftist rule.

Presenting her defence at an impeachment trial in the senate, Brazil’s first female president said the economic elite had sought to destabilise her government since she narrowly won re-election to a second four-year term in 2014.

Rousseff is expected to become the first Brazilian leader in more than 20 years to be dismissed from office on Wednesday when the senate will rule on charges that she broke budgetary laws by using state banks’ money to boost public spending.

In an emotional speech from the senate podium, Rousseff denied any wrongdoing and compared the trial to her persecution during Brazil’s 1964-1985 military dictatorship, when she was a member of a leftist guerrilla group.

She said the impeachment process, which has paralysed Brazilian politics since December and cast a shadow over last month’s Rio Olympics, was little more than a plot to protect the interests of the privileged classes in Latin America’s largest economy.

“I did not commit the crimes that I am arbitrarily and unjustly accused of,” Rousseff said, in what may be her last public appearance as president. “We are one step away from a real coup d’etat.”

If the senate convicts Rousseff, as expected, her vice president Michel Temer will be sworn in to serve the rest of her term through 2018.

Temer, who has been interim president since Congress opened impeachment proceedings in mid-May, has vowed to impose austerity measures to plug a growing fiscal deficit that cost Brazil its investment-grade credit rating last year.

Rousseff warned that a future Temer government would dismantle her Workers Party’s social programs that helped lift 30 million people out of poverty in the past decade and sell off state assets, including Brazil’s massive offshore oil reserves.

In a statement, Temer’s office denounced the comments as ‘false accusations’.

Rousseff, a trained economist and daughter of a Bulgarian immigrant, was handpicked by ex-President Luiz Inacio Lula da Silva to succeed him when he stepped aside in 2012, despite her lack of political experience and charisma.

Rousseff, 68, faces no allegations of personal enrichment. But she has been charged on the sidelines of the impeachment process with obstructing an investigation into political kickbacks at state-run oil company Petrobras.

She chaired the board of Petrobras from 2003 to 2010, when the worst of the corruption was taking place.

After riding the commodities boom in her first term, Rousseff’s popularity has dwindled to single figures this year, partly because of the massive Petrobras scandal and partly due to a deep recession that many Brazilians blame on her government’s failed interventionist policies.

Unbowed, Rousseff told senators that history would judge them by their votes and recalled her trial under the military dictatorship in 1970, when officers hid their faces to not be recognised in photographs.

“This is the second trial I have suffered in which democracy has sat with me in the dock,” she said, choking back tears as she recalled facing death when she was tortured day after day in detention. “Today I only fear the death of democracy.”

Odds against her

With many Brazilians assuming the result of the trial to be a foregone conclusion, there were scattered protests by Rousseff supporters on Monday but no sign of the massive demonstrations for and against the impeachment that shook Brazil earlier this year.

A survey by O Estado de S.Paulo newspaper said 53 senators have already confirmed they will vote against Rousseff, just one vote short of the two-thirds of the 81 seat Senate needed to dismiss her. Only 19 said they will back her.

“They want to overthrow a president re-elected by 54 million Brazilians and get rid of the Workers Party that has protected the poor,” said Thiago Fagundes, a 27-year-old graphic artist and Rousseff supporter in Brasilia. “It looks like they will get their way.”

Twenty of Rousseff’s former cabinet ministers were in the senate gallery to support her, along with Lula himself.

With the odds stacked against her, Rousseff’s testimony appeared more aimed at making a point for the history books, rather than a bid to sway a handful of wavering senators.

The impeachment process was launched by the former lower house speaker, Eduardo Cunha, who is facing charges of corruption, including taking bribes in the Petrobras kickback scandal and having millions of dollars hidden away in Swiss bank accounts.

“Curiously, I will be judged for crimes I did not commit before the trial of the former speaker who is accused of very serious illegal acts,” she said.

A full one-third of the members of the senate are under investigation for corruption, graft, fraud or electoral crimes, according to Congresso em Foco, a prominent watchdog in Brasilia.

Temer is confident he has the votes needed to remove Rousseff and plans an address to the nation on Wednesday before heading to China to attend the summit of the G20 group of leading economies, according to his press spokesman Marcio de Freitas.

A strong vote to oust Rousseff would help Temer take the difficult measures needed to restore confidence in Brazil’s economy, which is caught in a two-year recession, de Freitas said.

Rousseff is accused of using money owed to state banks to bolster spending during an election year in 2014, a budgetary sleight of hand employed by many elected officials in Brazil. She says the money had no impact on overall deficit levels and was paid back in full the following year.

(Reuters)

Brazil’s Lower House Speaker Resigns Over Corruption Allegations

Analysts said that Cunha’s resignation could end the legislative stalemate plaguing the lower house of Brazil’s Congress.

Brazilian suspended house speaker Eduardo Cunha reacts during a news conference at the National Congress in Brasilia, Brazil July 7, 2016. Credit: Reuters/Ueslei Marcelino

Brasilia: The corruption-tainted speaker of the lower house of Brazil’s Congress announced his resignation on July 7, ending months of political bickering that threatened to deepen a legislative stalemate blamed for keeping the economy mired in recession.

An emotional Eduardo Cunha, who had already been suspended from his speakership duties, said with a cracking voice that he was the victim of persecution for starting the process to impeach President Dilma Rousseff, who has been suspended since May 12.

“Only my resignation can put an end to this endless instability. The lower house cannot bear to wait forever,” Cunha told reporters in a hastily called news conference.

Interim President Michel Temer, who replaced Rousseff while she stands trial in the Senate, now faces the tough task of forging consensus from his broad centre-right coalition on new leadership. The new speaker must be elected by the lower house.

A bruising leadership race could slow Temer’s efforts to approve economic reforms to pull the economy out of what looks to be its worst recession in more than a century.

Humberto Dantas, a political analyst with E4 consultancy in Sao Paulo, said Cunha’s resignation could end the stalemate in the lower house of Congress. Dantas said that Temer’s challenge “will be to elect a candidate that supports his interests so he can avoid the same fate as Rousseff.”

A congressional ethics committee last month recommended stripping Cunha of his seat and banning him from politics for eight years for lying about Swiss bank accounts linked to a vast political graft scandal. Cunha has repeatedly denied any wrongdoing.

The full chamber is expected to remove Cunha from his seat in mid-July. Brazilian media has speculated that Cunha’s resignation could be part of a deal with his allies to vote against his full removal from the lower house.

“His resignation of the speakership will not save his mandate. On the contrary, this reinforces the need to expel him next week,” said Rubens Bueno, one of the leaders of the Popular Socialist Party, part of Temer’s alliance.

Temer’s office has not commented on the resignation.

Cunha is the only sitting lawmaker so far to be charged by the Supreme Court with corruption in the bribery scandal focussed on state oil company Petroleo Brasileiro SA, also known as Petrobras. In May, the court removed Cunha temporarily from the speakership, saying he used his position to obstruct the graft investigation.

(Reuters)

Brazil: Michel Temer’s Tourism Minister Resigns After Being Named in Petrobras Scandal

The accusations provide more fodder for suspended President Dilma Rousseff and her allies, who accuse Temer and his party of mounting the impeachment process against her in order to distract from their own roles in the corruption scandal.

Henrique Eduardo Alves (L) and Dilma Rousseff in Brasilia April 16, 2015. Credit: Reuters/Ueslei Marcelino

Brasilia: Brazil‘s tourism minister resigned on Thursday, less than two months before the country hosts the Olympics, as the government of interim President Michel Temer lost its third minister in a month to a sweeping graft probe of state oil company Petrobras.

Tourism Minister Henrique Alves was one of two dozen officials named in plea bargain testimony by a former Petrobras executive linking Temer and several of his closest allies to Brazil‘s biggest corruption scandal ever.

While Temer dismissed the accusations as frivolous lies, the latest ministerial resignation underscored the risks that come with the sweeping Petrobras probe, which has thrown Brazil‘s politics into chaos and deepened its worst recession in decades.

Sergio Machado, a former senator from Temer‘s party who ran the shipping arm of oil giant Petrobras for over a decade, was the latest in a string of politicians and executives who, when snagged by investigators, have flipped on friends and allies.

He told prosecutors that Alves, who served four decades as a congressman, had solicited 1.55 million reais ($450,000) in campaign funds from the scheme. Machado said the contributions were made legally but resulted from kickbacks owed by engineering companies that received Petrobras contracts.

Alves denied the accusation and said late on Wednesday on Twitter that contributions to his campaigns had been made through official channels and declared to election authorities.

His resignation adds to recent upheaval at the tourism ministry, where a global marketing campaign for the Olympics was held up for months because of a revolving door of ministers and secretaries caused by Brazil‘s political crisis.

“I don’t want to create embarrassments or any difficulties for the government,” he said in a letter to Temer provided to journalists on Thursday, explaining that he had resigned to focus on defending himself from the accusations.

Temer also dismissed the graft allegations as dishonest and reckless, pledging in a national address on Thursday morning that his government would not be distracted from fiscal reforms aimed at reviving the economy.

Temer said it was “irresponsible, ridiculous, mendacious and criminal” to suggest, as Machado did, that he had sought campaign funds for his party from the graft scheme, the first direct link implicating Temer in the scandal.

“We will not tolerate affirmations of that nature,” Temer said in a hastily scheduled public address. “A foolish suggestion like that can confound the government’s work. But I want to affirm that nothing will hinder our desire, mission and aim of doing what the president must do right now.”

The plea bargain testimony, implicating Temer and senior members of his ruling coalition, stole the thunder from a landmark fiscal reform revealed the same day.

Thursday’s newspapers splashed the bribery allegations across their front pages, pushing the government’s proposed 20-year constitutional cap on public spending far below the fold.

Machado’s plea deal included allegations that Temer had sought campaign funds for his party’s 2012 Sao Paulo mayoral candidate from the graft scheme at Petrobras <PETR4.SA>, the biggest ever uncovered in Brazil.

Rousseff faces a trial in the Senate on unrelated charges of breaking budget rules.

As many as a dozen of the 55 senators who voted last month to put Rousseff on trial are now undecided, according to surveys by Brazilian media. If just a couple of them change sides, the Temer camp would fall short of the 54 votes – equivalent to two-thirds of the 81-seat Senate – needed to convict Rousseff.

If she is convicted in mid-August, as many analysts still expect, Rousseff will be permanently removed from office and Temer would serve out her mandate until the 2018 elections.

(Reuters)

Brazil Congressional Ethics Committee Strips Speaker Cunha of Seat

Cunha has warned that if he is arrested he will take other politicians down with him, signalling a danger for interim President Michel Temer that could implicate more members of his government and ruling PMDB party in corruption.

Brazil’s President of the Chamber of Deputies Eduardo Cunha gestures during his defense in an ethics committee of the lower house, in Brasilia, Brazil, May 19, 2016. Credit: Reuters/Adriano Machado/Files

Brasilia: Brazil‘s congressional ethics committee voted to strip suspended Speaker Eduardo Cunha of his seat on Tuesday for allegedly lying about undeclared Swiss bank accounts, the latest in a series of political earthquakes to rock Latin America’s largest country.

Cunha insisted on his innocence and vowed to appeal the decision to another congressional committee. To remove him from office, a majority of the lower house of Congress still needs to affirm the decision.

If he loses his seat, Cunha, the architect of suspended President Dilma Rousseff’s impeachment, will also lose the partial immunity enjoyed by elected politicians. He could then be arrested and prosecuted by lower courts in several corruption cases brought against him.

Cunha has warned that if he is arrested he will take other politicians down with him, signalling a danger for interim President Michel Temer that a Cunha plea bargain could implicate more members of his government and ruling PMDB party in corruption.

Cunha is the only sitting Brazilian lawmaker to face trial in the massive bribery investigation focused on state oil company Petrobras, in which he was indicted for receiving a $5 million bribe related to contracts for two drillships.

The ethics committee voted to eject him from Congress for lying about holding bank accounts in Switzerland with his wife, who has also been indicted by prosecutors for receiving bribe money from a Petrobras purchase of an oil field in Benin.

Federal prosecutors who are unraveling the Petrobras kickbacks scheme ordered the freezing ofCunha‘s assets.

The fall of Cunha, one of Brazil‘s most divisive public figures, adds to sweeping political upheaval in Brazil as it struggles with its biggest graft scandal ever, the impeachment of Rousseff and the worst economic recession in decades.

The powerful speaker’s downfall was in the cards since the Supreme Court suspended him in May for using his position to obstruct the ethics committee hearings for months on end.

A wily backroom dealmaker, Cunha and his supporters have used every rule in the book to delay proceedings against him. Tuesday’s tight 11-9 decision in the 21-member committee hinged on the vote of a little-known evangelical congresswoman and former bible studies teacher known as Aunt Eron.

As an evangelical Christian, Cunha mustered strong support from the religious right in Congress. But as bribery accusations mounted, allies began to abandon him in recent weeks.

Cunha denied he had accounts in Switzerland, saying they were trust funds that he did not control, even though Swiss prosecutors had linked him to the bank accounts.

His case was not helped by credit card data showing his wife and daughter had spent tens of thousands of dollars in purchases of clothing in luxury shops from Milan to Paris and New York.

Cunha‘s departure is not likely to help Rousseff survive her impeachment trial in the Senate, where she is expected to be convicted of breaking budget laws and definitively removed from office in mid-August.

Rousseff was suspended last month and replaced by Temer, her vice president, whose government could have used Cunha‘s clout in Congress to pass tough measures needed to plug a growing fiscal deficit and restart economic growth.

However, corruption allegations against members of Temer’s cabinet and leaders of his Brazilian Democratic Movement Party have put the new government on the defensive and forced it to keep a distance from Cunha.

On Monday, the prosecutors in the Petrobras investigation filed a civil lawsuit against Cunha and his wife seeking the return of $5.7 million in alleged graft money. They also called for Cunha to be barred from politics for 10 years.

(Reuters)

Missteps by New Brazil Government Offer Rousseff Comeback Hope

A Rousseff comeback would likely sink Brazilian financial markets, after they rallied strongly at the start of this year on the prospects of her ouster. It could also leave Latin America’s largest country in a prolonged state of political deadlock.

Brazil’s President Dilma Rousseff attends a news conference at the Planalto Palace in Brasilia, Brazil March 16, 2016. Credit: Reuters/Adriano Machado

Brasilia: A wave of scandals in Brazil’s interim government is weakening the resolve of some senators to oust suspended President Dilma Rousseff offering the leftist leader hope of surviving an impeachment trial in the upper house.

Soccer-star-turned-Senator Romario shocked the government last week when he announced he was no longer certain to vote in favour of removing Rousseff. Brazil’s first female leader was placed on trial by the Senate last month on charges of breaking budget rules.

His announcement followed a flurry of gaffes, policy missteps and scandals that have rocked the three-week-old administration, including the resignation of two ministers after leaked recordings suggested they tried to block a massive anti-graft investigation at state oil company Petrobras before taking office.

The recordings, taped secretly by a defendant in the Petrobras probe who made a plea bargain deal with prosecutors, appeared to support Rousseff’s claim that her impeachment was an opposition conspiracy to seize power and avoid prosecution.

A prosecutor’s request on Tuesday for the arrest of four senior members of Temer’s PMDB party for allegedly obstructing the investigation – including the Senate speaker and a former Brazilian president – could sway senators who are reconsidering whether to convict Rousseff and permanently dismiss her.

According to surveys by Brazilian media, up to a dozen of the 55 senators who voted last month to put Rousseff on trial are now undecided.

If just a couple of those change sides, the Temer camp would lose the 54 votes it needs – two-thirds of the 81-seat Senate – to convict Rousseff. She would then be able to serve out her term until 2018, though many in Brasilia think she would be too weak to govern and would have to call early elections.

“It’s going to be very close. I have not decided,” Senator Cristovam Buarque told Reuters. “There are six or seven senators who are undecided and could go either way.”

Like Romario, who quit his seat on the impeachment commission on June 1, criticizing the appointment of ministers facing investigation in the Petrobras scandal, Buarque says Temer’s bad cabinet choices have made some senators think twice.

“The impeachment has become an election between Rousseff and Temer, who will also be judged on his record in government,” Buarque said. “The presidency will be decided by two or three votes.”

Verdict during Olympics

The Temer camp failed in an attempt on Monday to bring forward the verdict in the trial to late July from mid-August, as it sought to reduce the time for senators to change their minds.

The government had hoped that Temer would be able to open the Olympic Games in Rio de Janeiro on August 5 without lingering doubts about his legitimacy. Instead, the trial could now run until August 16, the middle of the Games.

Temer’s supporters hope new allegations of corruption against Rousseff will secure the vote of wavering senators.

Weekly news magazine IstoÉ reported on Friday that Rousseff solicited 12 million reais ($3.41 million) for her 2014 re-election campaign from Marcelo Odebrecht, the former head of Odebrecht, Latin America’s largest construction company.

The report cited a plea bargain Odebrecht is negotiating to reduce a 19-year prison sentence for bribery and money laundering. Rousseff strongly denied the report, the first to directly link her to corruption at Petrobras.

Temer’s spokesman, Marcio de Freitas, said the government had gained the support of three more senators and predicted 58 would vote to dismiss Rousseff. “We are very calm,” he said.

However, some leaders of Temer’s Brazilian Democratic Movement Party (PMDB) expressed concern about the close margin.

“I think we will win by 3 to 5 votes. That is very tight,” Senator Valdir Raupp, a member of the PMDB executive, told Reuters. He said the economy, mired in its worst recession since the 1930s, must show signs of recovery to guarantee other wavering senators do not back Rousseff.

With 11 million unemployed and inflation running at just over 9%, Temer is under pressure from Brazilians to deliver. The economy has contracted more than 7% in two years.

Temer’s business-friendly economic team led by Finance Minister Henrique Meirelles is tasked with plugging a record deficit. The team was weakened by the resignation of a key figure in passing reforms, former Planning Minister Romero Juca.

Juca departed after the release of one recording in which he suggested a change of government would help defendants in the Petrobras case avoid prosecution.

The cabinet crisis deflated market optimism that Rousseff’s removal would put Brazil on a path to fiscal solvency.

“The market is behaving like there is still a risk of Rousseff returning,” said Senator Eunicio Oliveira, PMDB leader in the upper chamber. “The quicker this is settled the better for the government.”

(Reuters)