Brazil: Fachin’s list: the Odebrecht earthquake

Sâo Paulo. April 19. The sheer scale and volume of the gigantic bribery operation that has been bankrolling the entire infrastructure of Brazilian politics over the last 30 years is breathtaking. The details, revealed by the declarations of over 70 executives of Brazil’s top construction company, Odebrecht, to teams of public prosecutors investigating the Lava Jato corruption scandal, would be enough to bring down the government and cause mass resignations of elected politicians in most countries. But President Temer didn’t see it that way. “Just because this or that happens, Brazil has to stop?” he asked, referring to what is claimed to be the biggest corruption scandal ever, not only in Brazil, but in the world.

It is true that congress, where the presidents of both houses, plus most party leaders and scores of deputies and senators appear on the list of accused, did empty out for a few sessions, but once the dust had settled they were back at work voting to roll back pension and labour rights and terceirize (outsource) the labour force as part of the government’s austerity package of reforms. On the list of those accepting illegal campaign funding or simply taking bribes are the crème de la crème – or perhaps now the curdled cream- of the political establishment – government ministers, state governors and party leaders – but also many local mayors and councillors.  The payroll included members of all the major political parties and most of the smaller ones. Odebrecht practised a policy of political inclusion, paying campaign expenses for communists and conservatives alike. Only the leftwing PSOL and the independent Rede parties escaped mention. The bribes were paid not only to gain government contracts for infrastructure projects, including those for the 2014 World Cup and the 2016 Olympic Games, but to influence new laws in Odebrecht’s favour, and to favour cartels. Sometimes the initiative came from politicians themselves, demanding money in exchange for favours.

The taped and filmed interviews with the company’s directors and top executives revealed how the multitude of transactions with so many different players became such a large and complicated operation that Odebrecht set up a special department to manage it, under the innocuous sounding name of Department of Structured Operations. Spreadsheets contained columns for amounts paid, dates, services rendered, and beneficiaries, known by their codenames. Some of them were jokey – Gilberto Kassab was Kibe, José Serra was Baldy. But the objective was no joke: power over the political system. Over 30 years it turned Odebrecht into the power behind the throne, the invisible puller of strings in what was in effect a carefully organised assault on public coffers, dating back to the end of the 1980s, continuing through the eight years of FHC, the eight years of Lula, and the six years of Dilma’s government, even after the Lava Jato investigations had begun.

A giant illegal cash machine was in operation – over a billion dollars was paid out. Beneficiaries still in power today include eight out of  the 28 ministers in the Michel Temer government, 12 of the 27 state governors, 29 of the 81 senators, over 40 of the 513 federal deputies, and innumerable other politicians, plus several executives at Petrobras. Some of the money went through offshore bank accounts, much was paid in cash, handed over during secret meetings in offices and homes. They discovered that up to 3 million reais could be stuffed into a rucksack. In exchange for their plea bargains, the Odebrecht executives expect lighter sentences for their part in the sea of sleaze into which they have helped to transform Brazil. Odebrecht is the biggest construction company, with hundreds of infrastructure projects in Brazil and overseas, especially in Latin America and Africa. But they were not alone: all the other major construction companies were also paying out to the politicians and their plea bargains are still to come. The devastating declarations, released by Supreme Court judge Edson Fachin, still have to be supported with material evidence before they can be heard in court.  But any last vestige of credibility of the Temer government has been torn away and the entire political class is discredited and demoralised. “Everyone who took part in the redemocratization process, in one way or another, operated with practices and within a logic that has led to the demoralization of the political system”, said political scientist Sergio Fausto. “We need to build a new political accord in Brazil because that which sustained the transition from the dictatorship to democracy is exhausted,” said Marcio Pochmann, director of the Perseu Abramo Foundation. Meanwhile unions angry at the government’s austerity measures have called a general strike for 28th April and indigenous peoples from all over Brazil are planning a ‘Terra Livre’ Camp in Brasilia, to protest at the dismantling of the laws that protect their rights and of Funai, the agency charged with protecting those rights. Scientists and environmentalists are also protesting at the severe and damaging cuts to the science and environment ministries, cuts that will affect Brazil’s role in international programmes and the Paris climate change agreement. The revelation of the vast amounts of money pocketed by some politicians – not all of it went on their campaigns – at a time when thirteen million Brazilians are unemployed – is leading to a dangerous disenchantment with politics. Nobody expects a repeat of the French Revolution, when the aristocracy paid the price with their lives for grinding the poor into the ground with taxes while they danced and feasted at Versailles. But analysts agree that there is a real risk of the political crisis worsening, opening up opportunities for populists and adventurers in next year’s elections.