With Brazil's Petrobras under fire for corruption, have Brazilians had enough?

Brazil's leading Worker's Party is under intense scrutiny this week amid Senate hearings and mounting allegations of corruption at Petrobras, the state-run oil company.

This is the second high-profile corruption scandal to plague the ruling party in the past decade. The landmark 2005 Mensalão case, where 38 national politicians were accused of crimes ranging from money laundering to tax evasion in a vote-buying scandal, ended in the conviction of 25 people in 2012. In recent weeks, pressure on the Worker’s Party (PT) has mounted amid allegations that Petrobras paid nearly triple the market rate for a refinery in Texas, and that management accepted millions of dollars in bribes from a Dutch oil-rig supplier.

Latin America has long been associated with widespread corruption and impunity – seen in everything from tax evasion to the flaunting of red lights at intersections. As corruption cases become more visible in Brazil, however, laws to battle them have been passed and political representatives have pushed for public inquiries into wrongdoing. Yet while the issue is garnering attention, attitudes are changing only slowly. 

Public intolerance of those who skirt the law is “not as much as you might think,” says Matthew Taylor, an assistant professor at American University’s School of International Service in Washington who studies corruption in Brazil.

Part of the problem is that the accusations are “very much part of Brazil’s political game,” Mr. Taylor says. With elections slated for October, politicians have started “creating difficulties to sell solutions,” he says, citing a popular Brazilian turn of phrase.

The political system is comprised of so many parties that the ruling faction is often forced to create large-scale coalitions. When election year nears, “you get a very strong impulse to beat up your fellow allies in trying to create space for yourself in the coalition,” Taylor says.

This year, the political maneuvering is particularly vivid as the PT’s biggest ally, the Brazilian Democratic Movement Party (PMDB), is competing with President Dilma Rousseff’s party in many local and state elections, and is looking for a bigger role if she wins another term in October. 

The PT has been in power for 11 years, and it’s favored to win again despite faltering poll numbers – President Rouseff’s approval fell from 43 percent in November to 36 percent in March. The PT has controlled Petrobras, and Rousseff, who was the energy and mining minister from 2003 to 2005, was closely tied to the company when the refinery purchase in question took place.

This political investigation "was a very tactical decision by coalition members,” Taylor says. 

Gaining ground

Nevertheless, the problem has slowly started generating public anger.

"Brazil is much more aware of corruption now than it was 10 or 20 years ago,” says Joao Castro Neves, the Latin America director for Eurasia Group, a political risk consultancy.

This was evident last summer, when hundreds of thousands of Brazilians took to the streets nationwide to demonstrate against excessive state spending on large-scale sporting events, lagging public services, and political corruption. Protest banners and posters included phrases like, “Public money, private gain,” and "Brazil a country for everyone thieves.” 

"The protests were part of an awakening process to some extent," Mr. Castro Neves says. But whether that will have an impact at the polls "is something yet to be seen."

Outside Rio de Janeiro’s city hall on a recent afternoon, a group of about 25 people clutched pillows and chanted slogans about World Cup spending. They’re homeless and can't afford Rio's high rents, explained Joao Rocha, who stood just yards from a line of police officers wearing helmets, bullet-proof vests, and carrying plastic shields.

“The government steals for its own benefit,” charges Mr. Rocha. “This is nothing new.”

Public attitudes appear to break down along class lines, according to recent data from IPSOS. The polling group found that Brazil's upper classes are twice as concerned with corruption as the middle class, and more than three times as concerned as the country’s poorest.

Convictions slow to come

Brazil is among the less-corrupt countries in South America, according to Transparency International’s 2013 Corruption Perception’s Index, which has it ranked behind Chile and Uruguay. Globally, Brazil ranks about average for corruption, ranking 72 out of 177 countries researched by the Brussels-based NGO.

Brazil has strengthened many key institutions since its 21-year military dictatorship ended in 1985, including the police, comptroller, and public prosecutor. But progress in convicting people on corruption charges has been slow.

The court system is well funded, independent, and strong, a trifecta not often found in Latin American judiciaries. But it “functions abysmally,” Taylor says.

“There’s a lot more evidence of corruption [in Brazil], but it’s hard to show evidence that corruption is being punished,” he says, calling the judiciary a “paradox.”

Even in the Mensalão case, which was hailed as Brazil’s “trial of the century” because of its potential to reverse the status quo of accepting institutional corruption as business as usual, it took nearly nine years before convictions were passed down, and in many cases the sentences were later reduced.

“We’re talking nine years of deliberations and hearings by the highest court in the land, which presumably should be the fastest court in land,” says Taylor, who says lower-level courts are even worse.

And as the system evolves to fight corruption – Brazil has passed two laws in recent years, targeting businesses involved in public-sector corruption cases and banning people convicted of corruption in lower courts from running for political office – the changes simply "force corrupt politicians to be more creative," says Castro Neves.

"Money and politics are like water and asphalt," he says. "If there’s a crack, the water – or corruption – will find its way in."

And, he adds, "Brazil’s roads still have a lot of holes in them."

Whitney Eulich reported from Brazil as a fellow with the International Reporting Project.