Business, Economics and Jobs

Brazil's rich and powerful may no longer be above the law

Demonstrators marched Nov. 15 against the government and corruption.
Credit: Miguel Schincariol

MONTEVIDEO, Uruguay — Some of today’s headlines in Brazil would have been unthinkable 10 years ago.

Years after South America’s largest and most populous country transitioned to democracy in the mid-1980s, Brazil’s rich and powerful enjoyed near-absolute impunity. Corruption wasn’t just rampant, it was also almost never investigated or acted upon.

Looks like the times, they are a-changin’.

In recent months, a string of high-profile public prosecutions have targeted the elites, leaving some Brazil observers hopeful that the country’s finally getting serious about targeting graft in the higher echelons of society.

Here's a look at three cases and the trending hashtags Brazilians are using to talk about them on Twitter. Each relays a pointed message to Brazil’s ruling class.

 

#Petrobras

The headquarters of the Brazilian state oil giant Petrobras in Rio de Janeiro.

An enormous scandal is unfolding at Brazilian energy company Petrobras. It’s notable not just because of the vast amounts of money thought to be involved — billions of dollars, the authorities allege — but also because the accusations implicate some of the country's most powerful business executives and the governing party. To date, the case has netted some 27 arrests.

Allegations of money laundering and profit-skimming at Brazil’s semi-public oil company have ensnared a former top official at Petrobras, as well as leading execs at some of Brazil’s biggest construction companies.

And there are signs that the charges could go even further.

Prosecutors allege that some of the money embezzled from Petrobras found its way into political campaigns, including that of President Dilma Rousseff’s Workers Party. Rousseff and others at the party have steadfastly denied the accusations.

But the recently re-elected leader did acknowledge the case’s significance.

“This may change the country forever,” Rousseff said in Australia during the G20 summit, Reuters reported. “How? By ending impunity.”

Paulo Sotero, director of the Brazil Institute at the Woodrow Wilson Center in Washington, DC, said the Petrobras case echoes another big corruption case known as the “mensalao” (a big monthly stipend) scandal, which went to trial in 2012. That case led to the arrest of 18 congressmen on charges of vote-buying. Then-President Luiz Inacio Lula da Silva’s chief of staff was brought down by the affair.

“Everybody thought that case would end in the proverbial Brazilian pizza — where everybody discusses it, then they all go and get pizza together,” Sotero said. “But 25 people were found guilty and some of them went to jail. Mensalao buried the idea that actions against powerful people inevitably end in pizza and impunity.”

The Petrobras case could well be the next mensalao, Sotero said, and as such, it’s a sign that Brazil’s prosecutorial and judicial systems are maturing.

“It’s one more building block in the affirmation of the rule of law in Brazil,” Sotero said.

 

#EikeBatistaClasseMedia (Translation: #EikeBatistaMiddleClass)

Eike Batista on Tuesday sitting between lawyers during the first day of his trial for alleged insider trading.

A couple of years ago, Eike Batista was Brazil’s richest man. He made a fortune on a succession of companies that specialized in gold and silver mining and oil and gas. But last year, his empire fell apart when it was revealed that his offshore exploration projects were largely failing.

Batista lost most of his fortune as the stocks in his companies plummeted. In September, he told the Brazilian newspaper Folha de Sao Paulo that he had landed back into the middle class with a “gigantic thud,” a quote that garnered him ridicule across social media sites as Brazilians competed to shame the once flamboyant playboy.

But Batista has bigger problems than public ridicule. He’s currently being investigated for insider trading and has been accused of selling off millions of dollars in stock in his companies early to avoid bigger financial losses. Batista has denied the claim, pointing out that he lost billions in the downfall of his stocks.

Insider trading cases might be run-of-the mill these days on Wall Street, but in Brazil, the Batista case could be a game-changer. Nobody has ever gone to jail for insider trading in Brazil, The New York Times reported.

Jamie Cooper, a law professor at California Western School of Law in San Diego and an expert on South American legal systems, said the Batista case, just like the Petrobras scandal, shows that Brazil is rising to the democratic challenge of holding its most powerful citizens accountable.

“I don’t think we can make grand statements yet, but these are hopeful signs,” Cooper said. “I hope we can look back one day and say these were incredibly important as Brazil opened up.”

 

#Juiznaoedeus (Translation: #JudgeIsNotGod)

The Justice Statue in front of the Supreme Court Building in Brasilia.

The furor over the actions of a circuit judge in Rio is building into a scandal that shows it’s not just Brazil’s most famous elites who are feeling a backlash against their perceived impunity.

The scandal, which judging by social media is making Brazilians’ blood boil, concerns news reports that Judge Joao Carlos de Souza Correa was pulled over in a routine stop checking for drunk drivers in Rio de Janeiro. He wasn’t over the limit but was reportedly driving without a license, registration or plates. When traffic inspector Luciana Tamburini issued him a fine, Souza Correa responded angrily and told her he was a judge.

“You may be a judge, but you’re not God,” Tamburini responded, according to media accounts of the interaction.

Tamburini was later convicted of “offending the honor” of the judge and was fined $2,000, a punishment that was upheld on appeal. The media caught on to the story and a legal fund raised more than $27,000 for Tamburini, according to Brazilian news site O Globo.

Currently, calls are growing on Brazilian social media for justice against Souza Correa. Online petitions have been set up to demand his ouster and the Brazilian Bar Association’s Rio de Janeiro chapter has called for his immediate suspension.

Souza Correa is still hanging in there, but the response from the public, the media and the bar association indicate that he’s in deep trouble.

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