Brazilian government in car wash to clean off sleaze

Brazilian president Dilma Rousseff has seen her approval rating plummet. Source: AFP

BRAZIL is mired in the biggest corruption scandal it has ever faced, a story of bribery and money-laundering that threatens to destroy the government and drag the country to its knees.

Senior state officials have been accused of involvement in a kickbacks scheme over contracts with national oil company, Petrobras.

Prosecutors say a cartel of the country’s biggest construction firms has allegedly been fixing a significant proportion of the world’s seventh-largest economy for years.

Operation Carwash, so-called because laundered funds were allegedly passed through a service station, is trying to scrub the country clean, arresting more than a dozen executives, politicians and bankers since its launch in July 2013.

Former President Luis Inacio Lula da Silva is facing investigation for alleged “influence peddling”. 

President Dilma Rousseff has seen her approval rating plummet to a record nine per cent low as the country’s formerly promising economy faces its worst four-year slump in a quarter-century.

Brazilians are sickened by the whole mess, with tens of thousands protesting in the streets, demanding an end to corruption.

Neither Rousseff nor her predecessor and mentor Luiz Inacio Lula da Silva have been implicated in the Petrobras scandal, which allegedly saw major construction and engineering firms paying bribes to politically appointed executives at the oil company in exchange for winning inflated contracts.

But the federal prosecutors’ office confirmed last week that it was considering opening a full investigation into Silva’s alleged overseas lobbying efforts for the nation’s biggest builder, Odebrecht.

Such an inquiry would explore whether Silva engaged in “influence peddling” by allegedly swaying foreign leaders to award inflated billion-dollar contracts to Odebrecht, and by pushing Brazil’s state development bank to give the company more than $1 billion in low-interest loans since 2011, after he left office.

Fake US dollar bills with images of Rousseff, Silva and the former Workers’ Party treasurer are thrown by protesters during voting on amending labour laws. Source: AFP

The company strongly denies any wrongdoing, as does Silva, who said he did not travel to lobby for deals. Silva was previously caught up in a vote-buying scandal in 2005, known as the Mensalão affair.

Petrobras says it knew nothing about the bid rigging. But in November, an executive at engineering giant Galvão Engenharia said he paid $1.5 million in bribes to win contracts from Petrobras, the Wall Street Journal reported. Former Petrobras manager Pedro Barusco admitted to taking almost $100 million in bribes. And former Petrobras exec Paulo Costa, nicknamed the ‘human bomb”, confessed to money-laundering and is co-operating with the state along with moneychanger Alberto Youssef.

More than 50 political figures, including 33 members of Congress, are now being investigated in the Petrobras case, and the scandal only threatens to get bigger.

Teachers and military police clash in downtown Curitiba during protests last month demanding better wages and working conditions for teachers. Source: AFP

The Workers’ Party that Silva helped found is in chaos, after prosecutors alleged that bribe money was funnelled back to its campaign coffers.

Brazilians are furious that Silva’s promises of a “new Brazil” that would end five centuries of poverty and corruption concealed a flawed system that was filling the pockets of the elite at the country’s expense, Bloomberg reported.

Finance Minister Joaquim Levy is proposing to reduce the deficit through heavy cuts to social service programs that support millions, in a country that desperately needs such support.

Rousseff, who was lucky to be re-elected in October despite the growing scandal around Petrobras, appears to be living on borrowed time.

As for Brazil, the scandal could be an opportunity to end massive corruption in the country, or it could simply be the symbol of its latest failure to become the developed nation it promised to be.