For the past two years, Brazil has been mired in the costliest corruption scandal ever uncovered in a democracy. Evidence surfaced in 2014 that contractors in Brazil had formed an alliance to overbid on projects for government-owned energy company Petroleo Brasileiro (Petrobras). Contractors pocketed the extra cash and bribed politicians and Petrobras executives to keep quiet.
The scandal — the investigation of which came to be known as “Operation Carwash” — was so blatant and implicated such prominent political figures that it shocked Brazil, a country accustomed to high-level corruption. And now the odds that Brazil’s president, Dilma Rousseff, will survive the fallout are looking slimmer and slimmer.
The Brazilian middle class reacted swiftly and harshly to the Petrobras revelations, staging massive protests whose scope eventually transcended the scandal. More than corruption, the protests are about waning patience with the ruling party as Brazil’s economic recession drags into its second year.
Swept up in the frustration is Rousseff, who has not been directly implicated in the Petrobras scandal, though she served as the company’s chair for several years. Instead, Rousseff faces imminent impeachment proceedings, in Brazil’s lower house of congress for allegedly manipulating government budgets in 2014 to make the country’s budget deficit appear smaller ahead of an election.
Brazil is a massive country spanning several varied environmental zones, a fact that has historically made it difficult to develop and to govern. On top of this, the country’s formidable geographic challenges have had an almost deterministic effect. The country’s s unfolding political tribulations are a significant departure from its recent trajectory.
Just a couple of years ago, Brazil seemed destined for greatness. The biggest economy in South America, Brazil is part of the so-called BRICS (Brazil, Russia, India, China and South Africa), a group of emerging economies highlighted for their massive growth potential. Social progress accompanied its economic advances. The World Bank praised the country for reducing inequality and raising the standard of living for its poorest citizens from 2003 to 2014.
So how did Brazil fall so far? To ensure that the Petrobras scandal becomes a milestone in the country’s progress, rather than the event that derailed its rise, Brazil must examine its underlying causes.
In any corruption campaign, various targets emerge as scapegoats who embody the scandal. Rousseff, as the leader not only of the country but also of Petrobras during much of the time period under investigation, has come to emblemize Brazil’s corruption.
If at least two-thirds of Brazil’s lower house (342 of 513 congressmen) vote in favor of Rousseff’s impeachment, the president will be one step closer to ouster. The case would then go to the Senate. Once a simple majority in the Senate accepts the impeachment case, she would be forced to step down for up to 180 days while it is evaluated. If two-thirds of the Senate members vote to impeach Rousseff, Vice President Michel Temer would officially assume the presidency, where he would be challenged with stabilizing the country politically and economically.
If he did take over the presidency, Temer’s first challenge would be gaining enough support from opposition parties and from the parties breaking from Rousseff to form a ruling coalition
But these best-case scenarios for Temer overlook a political wild card that could be more disruptive than even Rousseff’s impeachment. Based on allegations that Rousseff’s presidential campaign received money gained through the Petrobras collusion, the entire 2014 election could be nullified. In that case, Rousseff, if not already impeached, would lose the presidency anyway. And because Temer was a part of the nullified election, he would also lose power, whether as vice president or president.
Hence both president and Vice are caught in what is fundamentally a legal dispute spurred on by political infighting. Even so, Brazil’s large-scale anti-corruption probe is a testament to the strength of the country’s institutions and the success of democratization. If Temer and other lawmakers handle it well, the resulting reforms could eventually restore investor confidence and lead to stronger and more stable growth. For now, the waiting game continues.


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