Brazil: Ruling class in crisis

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fora temer

On 17 May, in the latest blow to the Brazilian ruling class, unelected President Temer was finally exposed in the establishment newspaper O Globo, caught on tape in March endorsing the payment of hush money to ex-speaker of the lower house of Congress, Eduardo Cunha. Joesley Batista, chairman of JBS, the world’s biggest beef exporter, was paying Cunha monthly to keep quiet about JBS’s role in the associated ‘Car Wash’ scandal, the payment of a percentage of state contract monies to political parties in return for receiving contracts. Cunha is already serving 15 years for taking $1.6m in bribes in the Petrobras scandal. Alvaro Michaels reports.

Brazilian politicians are absolutely discredited. The revelations now emerging have highlighted the shameless hypocrisy of those who forced Dilma Rousseff out of office last year. Rousseff was impeached on charges concerning manipulation of government budgetary accounts; a minor offence compared to those committed by the gang now clinging to office.

Immediately after the tapes were published, the opposition filed a motion in Congress for the impeachment of Temer. To date, at least nine impeachment motions have been submitted against him, including one by the Bar Association. Protesters demanding a fresh election took to the streets in several cities after the news broke. On 19 May Brazil’s lead prosecutor Janot wrote that there was evidence of Temer and one of his most powerful coalition allies, the senator and former presidential candidate Aecio Neves, ‘possibly committing the crimes of corruption and of obstructing justice’ via legislative means and by influencing police investigators. On 20 May, Temer filed a petition to have the investigation suspended, by the same court that issued the order, but withdrew it three days later to be able to ‘clear his name’. Charges can only proceed if a two-thirds vote in the Congress’s Chamber of Deputies approves the step.

Temer denies accusations of negotiating a $40m bribe in 2010 for his Brazilian Democratic Movement Party. His special adviser Rodrigo Rocha Loures, who is involved in this, may be arrested at any time. Temer has presidential immunity – which lasts until 2018 – from investigation for matters outside his time as president.

Batista made his confessions as part of a plea bargain deal which included providing the tapes. On 23 May, JBS executives told federal prosecutors that JBS paid politicians like the Senate President Eunicio Oliveira and former Foreign Relations Minister and current senator Jose Serra to obtain benefits through legislation passed by Congress. Oliveira received $5m to make changes in a legislative decree issued by the executive which could have jeopardised properties of J&F Investments, JBS’s parent holding company. Oliveira sponsored the decree. Batista claims JBS paid Temer about $1.5m between 2010 and 2017. Some of those funds were disguised as legal campaign donations and others were channelled to Temer’s public image consultant Elsinho Mouco. Batista then resigned as chair and a Brazilian court ordered the freezing of R$800m ($247m) in his bank accounts because of allegations of insider trading. J&F agreed to pay a record-setting R$10.3bn ($3.2bn) fine for its role in the corruption, a deal that conveniently shut down several other inquiries into its dodgy pension fund and repackaging out-of-date meat.

Batista told authorities that he transferred $150m to offshore bank accounts for the campaigns of President Lula da Silva and his successor, Dilma Rousseff, via former finance minister Guido Mantega, but could not say which accounts or which campaigns.

Up until this latest exposure the Supreme Court had authorised investigations into eight members of Temer’s cabinet, 24 senators and 39 lower-house deputies for alleged graft related to the state-run oil company Petrobras and the construction company Odebrecht. JBS had provided evidence of bribery that prompted the Supreme Court to suspend Rocha Loures and Senator Neves.

A new thread in the web of corruption investigations around Temer was revealed on 23 May when Tadeu Filippelli, a former vice-governor of the capital and cabinet adviser, was one of three senior politicians detained by police. They are accused of deliberately inflating the cost of the Mane Garrincha World Cup stadium in return for bribes from the construction company. Initially budgeted at $180m, the stadium ended up costing $454m, the second most expensive football stadium in the world. Last year, it was used as a bus depot. Filippelli was dismissed from his post as soon as the charges were made public.

On 24 May, Temer called out the country’s armed forces to end a protest against his government by more than 45,000 people who gathered at Brasilia’s Esplanade of Ministries. He claimed it was not unusual, noting that the military had been called to patrol cities 29 times since 2010. Such was the reaction that he revoked his decree on the same day. Protesters want his resignation and a new election.

On 9 June Brazil’s Supreme Electoral Tribunal rejected allegations of campaign finance violations against Temer that could have removed him from office. The focus will now be on the parallel case of obstruction of justice and corruption.

The material imperative

Imperialism is indifferent to anything other than the enforcement of the so-called ‘reform’ process put in place by the thieves running the country. Western bankers worry about anything that slows the intensification of the rate of exploitation of the Brazilian working class. As long as they can plunder the country of its resources, nothing else really matters.

14 million unemployed workers threaten the financial elite’s hold on the country. Overall in 2015 and 2016, the economy dropped a massive 3.8%, then 3.6%, in its worst recession on record. Temer argues that any attempt to remove him from office would doom the effort to revive growth, and plunge Brazil into new instability. Brazil’s stock market fell 9% on one day in the week after the Temer bribery allegations surfaced; its biggest loss since the 2007-2009 global financial crisis. A bill to reduce wage costs is awaiting final Senate approval and Temer’s attack on the pension system will probably pass Congress this year.

Austerity and protest

At the end of April, thousands marched against the austerity plan in the first general strike in over two decades (see www.revolutionarycommunist.org/americas/brazil for previous reports). Trade unions called for Temer’s resignation. In cities like Rio de Janeiro and Sao Paulo there were violent demonstrations. A poll found 71% were against changes in retirement laws which will see people working longer and paying more for state pensions. However, there is no significant political opposition and no government can operate outside the multi-party coalition process, compromising any socialist effort. Former president Lula da Silva is likely to emerge as the strongest contender to win next year’s presidential elections, if he survives the accusations of corruption thrown at him by those opponents charged or investigated for corruption themselves.

Fight Racism! Fight Imperialism! 258 June/July 2017