The Brazilian presidential election of this year has the potential to scale back the political crisis that the country has been facing for the last 4 years. Alas, it seems that it will also increase the political division of the society even more. Lula’s representative, Fernando Haddad, affiliated with the workers’ party (PT) and the former mayor of Sao Paulo, will probably run against the right-wing populist Bolsonaro in the second round of the election, the high rate of rejection for both will turn the term of the next president another struggle for survival instead of an administration that would bring solutions for the economic-political crisis that the country is facing now. In order to understand this outcome, one must address three topics: Lula’s legacy, The Car Wash investigation, and the PT political strategy to fight the Brazilian judiciary. Although Lula has many motives to prove his innocence and to get rid of the political persecution that blocked him from running in this year’s elections, his political power and charisma also prevented a left-wing candidate outside PT that could stop the political radicalization of the country. Therefore, this election could be the first step towards the end of Brazilian democracy.
After being defeated for president three times between the years of 1989 and 1998, Lula, ex-leader of the Sao Bernardo metallurgical union, founder and ex-president of PT, won the 2002 election. His political party stayed in power for 13 years due to his two terms in office and the years his hand-picked successor, Dilma Rousseff. Some important social and economic changes happened in Brazil during the Lula/Dilma administrations. By the end of Dilma’s first term, the PT had brought 36 million Brazilians out of poverty. Twenty-one million jobs were created, the minimum salary after inflation was raised to 71%, new public universities were created while the spots available in previous ones were expanded, 3 million poor adults were incorporated into private universities with financing from the government, university affirmative-action policies permitted access to Afro-Americans and Native-Americans, and the public debt was reduced from 60% to 35% while the external debt went from 42% to 14% in proportion to the GDP. Also, the country’s international reserve of dollars in the Central Bank was multiplied by 10. In addition to this, unemployment declined from 12% in 2003 to 5% in 2013 (Pochmann, 2012). Along with all of PT’s other accomplishments, agriculture exportation rose from 96 million tons in 2002 to 191 million tons in 2014 , iron-ore production 11 increased from 212 million tons in 2002 to 390 million in 2010 , and inflation was 12 stabilized between 5% and 7%. Credit increased from 26% GDP in 2002 to 56,5% GDP in 2013 . The GDP was 597 billion dollars in 2002 and 2,342 billion dollars in 2013.
The Car Wash Investigation
However, the other side of Lula’s administration is the corruption scandal associated with Petrobras, Brazil’s semi-public oil company. The “Car Wash” investigation has proved that the Petrobras directors were allies of the PT administration. The construction companies that were hired by Petrobras for its investment plans were operating as an oligopolistic “club.” The presidents of these companies had meetings before submitting their bids to Petrobras in order to decide which construction company would win the contract and at what price. Part of the markup that these prices generated was to be passed on to “operators,” via fake marketing or consulting contracts. These operators, in turn, would pass on the money to PT allies and the Petrobras directors. The money funneled to the PT allies would later be used for campaigns (via a mechanism called “caixa dois” in Portuguese: campaign money spent but not declared to the electoral authorities). Part of this money was also used by politicians for their own personal enrichment. (Neto, 2016).
Since 2014 almost 3.5 billion dollars have been recovered through agreements. At least 415 politicians from 26 parties have been incriminated. For the first time, a president of the Republic has been formally accused of corruption. Five mayors and six senators have also been implicated.
The corruption scandal deeply affected the Brazilian economy stopping its most dynamic part: the construction companies and the oil/naval industry. This started the economic depression that was deepened by the recessive economic policies adopted by Dilma after her reelection. She betrayed her voters by starting a contractionary fiscal policy that was suggested by Aecio Neves, her opponent from PSDB (Social Democratic Party) in the 2014 elections. These events cause a drop in her support from 40% of the population in February 2014 to 12% in April 2015. Therefore, the PT’s opposition had an opportunity to initiate the impeachment process that eventually was accepted by Eduardo Cunha (former president of the Chamber of Deputies) when he felt betrayed by the PT. His party PMDB (Brazilian Party of the Democratic Movement) was part of Dilma’s Congress coalition and PT refused to protect him from a corruption accusation by the Car-Wash investigation.
My thesis is that the “Car Wash” investigation used the law to gain the support of public opinion and influence Brazilian politics towards Lula’s imprisonment. Since the beginning of the investigation, it has been clear to the Federal attorneys and police officers that Lula knew everything about the corruption that was going on in Petrobras. He was the President of the Republic and PT leader, so it was impossible for him not to know what was happening. However, the PT never exposed their leader to the negotiations or anyone in the party who was formally accused accepted a plea agreement to accuse Lula. The problem for the “Car Wash” was that the investigation would not completely succeed if it didn’t punish the main leader of the corruption scheme. For this reason, this investigation has turned Brazil’s judiciary into an authoritarian institution: first, by using illegal means to obtain evidence; second, by forcing plea agreements through long term preventive custody; and third: by having a partial judge (Sergio Moro, the judge in charge of the Car-Wash court lawsuits) that condemns without enough evidence and who was spotted at events organized by politicians of the PSDB (PT’s opposition party). It is a clear example of the means-end scheme of law used by a Justice officials to influence Brazilian politics. What is evident is that a conflict of egos between Moro and Lula has been passed on to the institutions of government, a struggle between the Federal Justice and PT. This conflict became really complicated when it became evident that Lula had a good chance of winning the 2018 elections due to the obvious disaster of the Temer administration, which has followed Rousseff’s. Temer has absorbed all of the blame for the political, social, and economic crises that Brazil is now facing.
Lula’s verdict regarding the Guaruja triplex — an apartment that was supposedly given to Lula by a construction company Olivieri, Araújo e Suarez (OAS) as a reward for allowing the corruption in Petrobras – is perhaps the most serious example of authoritarianism and political manipulation in the “Car Wash” investigation. The case was adjudicated at record speed in the Brazilian justice system. From the initial accusation to Lula’s imprisonment, it took approximately 18 months. Many legal experts agree that there has not been enough evidence that Lula gained the apartment by illegal means. A negotiation was in process between Lula’s family and the OAS, mediated by the CEO Leo Pinheiro, but it didn’t come to a completion and Lula never got the apartament’s possession. Therefore, it was assumed that the apartment was acquired by Lula with no intent to pay it back. The unanimous approval of Moro’s verdict by the TRF-4 (the appealing court for Moro’s judicial decisions), is suspect because of this. How can a controversial trial have a unanimous decision by three independent judges that apply the same sentence? In my opinion, Moro and the TRF-4 were aligned politically in order to take Lula out of the elections. This is extremely serious because it makes the Brazilian justice system similar to one of a state of emergency in which the defense has no chance for success since the verdict has been decided before the trial.
PT political strategy
Lula’s exalted political ability and charisma are real. His success as a politician is not only due to his “mythological” biography, but also to the real improvement in the lives of the poor during the PT era and in the successful diminishing of the class struggle. Although a part of this social change can be explained by a favorable external scenario, like the high prices of the commodities and the world’s economic growth led by China, his political capacity to solve conflicts between the elite and the poor should not be overlooked.
PT fought with all its strength to have Lula as its candidate for the 2018 presidential elections. The party appealed to all the courts, even to the UN, in order to have a favorable decision for Lula. However, the TSE — the highest Brazilian court for the electoral justice – decided that Lula cannot to run for the elections due to his conviction for the apartment in Guaruja.
The competition between the right and the left in the last 6 elections has been an antagonism between PSDB and PT, however, the corruption scandal that affected all of the major parties brought a high level of disappointment to the voters, this is well expressed by Paixao, 2018 in this Public Seminar article. Thus, Bolsonaro’s discourse of institutional violence to stop criminality and corruption has impressed the PSDB voters and now there is a high probability that he will continue onto the second round of the elections. It seems from the last polls that Lula will be able to transfer his votes to his representative, Fernando Haddad, who will probably be the left-wing candidate in the second round of the elections.
The problem of this outcome is that the division in the Brazilian society will be extremely heightened with these two candidates in the second round. It can open the way for an explicitly violent result that can lead to an authoritarian administration. It would be better if the left-wing had a candidate outside of PT, because this party is too marked with the corruption scandal and has a high rate of rejection. However, Lula’s supremacy in PT precluded the rallying of the left-wing parties behind a name from outside of his PT. Indeed, it’s clear that Brazilian political organizations still need to develop a better system of party primaries that would diminish the power of its leaders to decide who will be the candidates in the elections. Brazilian democracy is fragile not only because the institutions are not strong, but also because the parties are not democracies but political feuds.
It is true that Lula should not be abandoned by his party at the moment that he needs it the most and he showed once more his genius as a political strategist. However, he is placing Brazilian society in an extremely risky situation. The Car Wash investigation is the main culprit though, if this investigative task force did not use authoritarian means to arrest Lula, he would probably not have the same electoral strength, and this dangerous situation that we are facing now could be avoided.
Theo Vasconcelos de Almeida — Undergraduate of Economics at Universidade de Sao Paulo, Master’s in Economics at the Universidade Federal do Rio de Janeiro and enrolled in the Master’s program of Political Science at the New School of Social Research.
Pochmann, M. (2012). Nova classe média?: o trabalho na base da pirâmide social brasileira . Boitempo Editorial.
Netto, V. (2016). Lava Jato: o juiz Sérgio Moro e os bastidores da operação que abalou o Brasil. Sextante.