Oil, Corruption, and Uncertainty: The Impeachment of Brazilian President Dilma Rouseff

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On August 31, the Brazilian Senate voted 61-21 to formally impeach President Dilma Rouseff, who had been ousted in May amid charges that she illegally “[moved] government expenditures around within the Brazilian budget to make her government’s financial performance look better overall than it actually was.”[1]  Her impeachment comes at a time of economic difficulties and political scandal.  Rouseff and her Worker’s Party, which has held presidential power in Brazil for thirteen years, was at one time seen positively by the working class due to the importance she gave to labor issues, including the passing of a number of labor laws.  Those successes have apparently been forgotten as Brazil has been experiencing “its worst recession since the 1930s, with GDP falling for six straight quarters.”[2]  Combined with a number of corruption scandals, including a $3 billion scandal involving the country-owned oil company, Petrobras.  Despite the impeachment, it is uncertain whether the new president, Michel Temer, will be able to improve conditions.

While the movement of government expenditures is cited as the official reason for Rouseff’s impeachment, it is the Petrobras scandal that has most drastically affected her support among Brazilians and which had placed her in the most danger of facing impeachment.  The company was founded in 1953, with the government owning a majority share and smaller shares being held by groups in São Paulo and New York, as well as private citizens in Brazil.[3]  After being partly privatized by centrist party President Fernando Enrique Cardoso, state control was restored by Worker’s Party President Luiz Inácio Lula da Silva in the 1990s.[4]  In 2007, while Lula da Silva was still in power, a large deepwater, offshore, pre-salt oil field was discovered and the Worker’s Party, in an attempt to keep the oil out of private hands, created a “new regulatory regime that made Petrobras the sole operator of pre-salt discoveries.”[5]  The scandal involves the placing of Worker’s Party officials in the most prominent Petrobras executive positions, which they then used to divert funds and make profits for themselves which some estimates claim amount to billions of dollars thanks to the large interest and investment in the pre-salt fields.  While she has not personally been charged with corruption related to the scandal, Rouseff came under suspicion and lost trust among Brazilians because she had been the chairman of Petrobras from 2003 to 2010.[6]

While Rouseff was impeached on charges of corruption related to the reallocation of government revenue, she and her supporters describe the impeachment as a coup and that the movement of money is not inherently illegal, particularly if it is not for personal monetary gain.[7]  While Rouseff had seen low approval ratings as a result of the country’s economic crisis and political scandals, Temer faces his own wave of backlash connected to both the Petrobras scandal and the few measures he has enacted since taking office in May.

One of the biggest complaints among Brazilian’s is Temer’s cabinet, which has no female or Afro-Brazilian ministers, which is supposed to represent a country in which 51% of citizens identify as black or mixed race.[8]  Just the same, some cabinet ministers, including the anti-corruption and planning ministers, have resigned amid claims they actively tried to impede the Petrobras investigation.[9]  Temer was also recently found guilty of violating campaign finance laws, which may result in his being ineligible to run for political office for eight years.  There are also significant groups of Brazilians who see Rouseff’s impeachment and Temer’s appointment as counter to the country’s young democracy.[10]

For now, the country’s future is uncertain.  Rouseff is planning to appeal the impeachment decision to the country’s Supreme Court, although many believe that they will uphold the vote, if they choose to intervene at all.  Coupled with low approval ratings of the siting president, continued charges of corruption, and continuing economic crisis, it is too soon to know if Temer will be able to make positive changes or if the Worker’s Party will be able to take back control in the next election.

[1] Editorial Board, ”Exit Rouseff: Brazil impeaches a president, but will carry on,” Pittsburgh Post-Gazette, September 2, 2016.

[2] Matt Sandy, “Dilma Rouseff’s Impeachment is the Start of Brazil’s Crisis—Not the End,” Time, September 1, 2016.

[3] Joe Leahy, “What is the Petrobras scandal that is engulfing Brazil?” Financial Times, March 31, 2016.

[4] Ibid.

[5] Ibid.

[6] Ibid.

[7] “Exit Rouseff”.

[8] Romero.

[9] Ibid.

[10] Ibid.

Jessica Chrisman, Atlantic World, jchrisma@villanova.edu

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