Brazil targets corruption in 'trial of the century'

In Brazil, where personal graft has been part of the political landscape since the Portuguese landed, the Supreme Court is trying more than three dozen of the country’s best known political movers and shakers. It might not reverse centuries of the status quo, but it is being billed as “the trial of the century.”

The 38 accused face charges ranging from money laundering to tax evasion to organized crime, stemming from the so-called mensalao scheme (mensalao means big monthly payment in Portuguese), in which the government of former president Luiz Inacio Lula daSilva allegedly paid deputies in return for congressional backing.

Prosecutor Roberto Gurgel called the scheme “without doubt the most daring and scandalous case of corruption and embezzlement ever uncovered in Brazilian history.”

Defense attorneys dismissed the accusations as a “legal illusion,” “unfounded, incomplete, and intimidating,” and said the process was akin to the “Nuremberg trials.”

Who is right won’t be known until rulings are made, probably some time next month. But the trial is significant for reasons that go beyond the eventual verdicts.

First, although corruption in Brazil is endemic, it rarely leads to criminal prosecution and almost never when politicians are involved, so this is widely considered a step forward for Brazilian justice.

It also highlights the widespread use of illegal financing in political campaigns. One of the most surprising things to emerge from the first week of testimony is how the accused are arguing the money they were siphoning off from public accounts went to campaign slush funds, rather than to pay off allies. Such slush funds are illegal, but the accused are betting the accusation is of lesser gravity because of public tolerance.

The trial comes at a sensitive time, just weeks before October’s municipal elections to elect more than 5,500 mayors across the vast South American country, and as a wave of strikes by federal workers threaten President Rousseff’s huge popularity.

However, analysts say Rousseff herself is largely immune from any mensalao fallout. Not only has she shown an uncommon intolerance for corruption inside her government, sacking at least a half dozen since taking office, she rose to power after the mensalao scandal broke.

“The impact on the Dilma Rousseff administration should be modest,” says Joao Augusto de Castro Neves, a political consultant with the Eurasia group. “From the outset, the inner circle of the Rousseff government had little or no ties with those involved in the scheme.”

The same cannot be said for her Workers’ Party (PT) or her predecessor, and mentor. Mr. Lula da Silva, known as Lula, first said he knew nothing about the scheme, then said he felt “betrayed” and apologized to the nation, then denied it ever existed.

The consummate Teflon president, Lula has largely avoided any blame, but guilty verdicts will further tarnish a legacy that was sullied irrevocably last month when he backed the PT’s electoral alliance with Paulo Maluf, the Sao Paulo deputy on Interpol's most wanted list for financial crimes.

That, analysts say, was further proof that the PT, once the party of ethics in Brazil, had conclusively replaced policies with pragmatism – and politics as usual.

“The PT’s logic was that we do things differently, we are the anti-party party,” says Timothy Power, director of the Latin American Centre and Brazilian Studies Programme at Oxford University. “ 'Everyone else is doing it so why can’t we' is not the most persuasive explanation for a party that was supposed to be different.”