Brazilian President Rousseff's first semester marred by battles with Congress, scandal

Although she has kept Brazil's economy buoyant in her first six months, the president has lost four ministers to corruption scandals and has been unable to keep her congressional allies in line.

On July 13, Brazilian President Dilma Rousseff threw a cocktail party to celebrate the end of her government’s first semester and the beginning of the National Legislature’s mid-July break. According to LatinNews.com, 17 of 38 ministers made an appearance, as did the presidents of both chambers of Congress and the vice president. The event began at 7:30 p.m., but by 9 p.m. most invitees had already left. The lukewarm turnout and hasty departures reflect a palpable lack of enthusiasm for Ms. Rousseff’s performance after six months in power.

To her credit, the president has kept the economy buoyant while Europe and the US tank, and she has added continuity to former President Luiz Inácio Lula da Silva’s achievements by expanding and inventing new social programs, such as the new Program to Fight Extreme Misery (Programa de Combate à Miseria Extrema). But apart from these significant bright spots, the president’s policy performance has been halting at best and weak at worst. Overall, the clearest trend has been to privilege the unity of her legislative coalition at the cost of policy priorities, ultimately making a success of neither.

The Coalitional Problem

Notwithstanding the largest majority coalition in Brazil’s democratic history, the president has had extreme difficulty ensuring Congress’s support. Supposed allies have disobeyed and blackmailed Rousseff, weakening or delaying governmental policy priorities, particularly those critical to Brazil’s future sustainability and stability: Forestry Legislation (Código Forestal), the establishment of a Truth Commission, and the passage of a Freedom of Information Law, among others.

On the other hand, Congress has merrily passed measures to increase opacity in budgetary accounting, as was the case with decree 527/11, ostensibly designed to expedite contracting for the 2014 World Cup and 2016 Olympics. One of the few members of the congressional opposition, PSDB (Brazilian Social Democracy Party) leader Aecio Neves, commented:

In all, absolutely all modern societies, transparency or the advance of transparency is seen as an instrument to defend [the rights of] society. Here we are taking a contrary path, employing the argument that we’re in a hurry, as if we had just now discovered, over the last couple of months, that we would host the World Cup and the Olympics.

The Corruption Problem

Despite Congress’s role in obstructing the president, resisting transparency, and supporting opacity, it has predictably blamed the president for a lackluster first semester. “In this first semester,” according to the president of the Senate, José Sarney, “the crises that emerged were all within the Executive.”

It is true that Rousseff has had to replace no less than four ministers in her first six months in office, including two as a result of major corruption scandals. First to go was Antonio Palocci, the president’s chief of State and congressional fixer. It was the Folha de São Paulo newspaper that discovered a multiplication of 20 in the político’s net worth over four years. Apartments and other assets had been registered under false names.

Second was Rousseff’s transport minister, Alfredo Nascimento, a coalitional cabinet posting for the PR (Republic Party), an important ally of Rousseff and her Workers' Party. Mr. Nascimento’s ministry and PR congressional leaders had skimmed untold amounts from the massive public transport projects in advance of the 2014 World Cup and 2016 Olympics. Nascimento then had the gall to ask Rousseff for an additional $6.5 billion because of budget shortfalls.

While the transport minister’s entourage was forced to resign, it initially appeared that Nascimento himself had escaped the axe. Then it was discovered that the net worth of the minister’s son had increased from somewhere under $130,000 to around $20 million in a matter of a few short years. The minister’s resignation – which Rousseff should have ordered from the very beginning – soon followed suit.

It is widely suspected that the leak responsible for this scandal originated within the president’s sphere of influence. Rousseff is viewed to support a housekeeping of corrupt rent-seekers, many of whom, like Nascimento, are hangovers from President Lula’s two administrations. When Rousseff finally did choose a replacement minister for Nascimento, the PR appeared to be unhappy with choices made; this past Wednesday it boycotted a lunch for PT (Workers' Party) allies in the Lower House.

The need to pander to congressional allies is the critical reason Rousseff has not acted with greater decisiveness. Some, including the author, originally thought that what Rousseff lacked in negotiating ability, she would make up for in fearsome authority. Yet with congressional legislators disloyal to ideology and local constituencies, negotiation through pork and positions seems to be one of few alternatives.

Rousseff’s decision not to spend last year’s residual budget funds is illustrative of what can happen when legislators are denied resources. When Rousseff refused to release funds for pork barrel spending, the Lower House conducted a boycott; not even her own party would vote for critical health legislation until Rousseff caved in, disbursing the $3 billion she had sought to save taxpayers. Such defeats illustrate that Rousseff still has much to learn about legislative hardball.

--- Greg Michener, based in Rio de Janeiro, writes the blog, Observing Brazil. He is currently writing a book on Freedom of Information in Latin America for Cambridge University Press.