Brazil’s anti-corruption efforts reflect the rise of the middle class

by Felipe Krause

“The institutions are working,” the pro-impeachment camp in Brazil confidently proclaimed after President Dilma Rousseff’s removal, on charges of disguising shortfalls in government accounts, in August 2016. While some argued the charges were a weak basis for ousting a president, the impeachment process was procedurally rigorous.

Yet just a few weeks after Michel Temer took office as the new president, corruption allegations surfaced against members of his government and parliamentary support base, including some who had voted to impeach Rousseff, leading to the replacement of five cabinet ministers in the administration’s first six months. Rousseff’s defenders didn’t miss a beat: “The institutions are working!” they declared.

Now that former President Luiz Inacio Lula da Silva, who orchestrated Rousseff’s election in 2010, has been sentenced to almost a decade in prison for corruption and money laundering, it is worth asking, whom are the institutions working for?

Carwash and the fight against corruption

“Operation Carwash,” is a colossal investigation into a kickback scheme centred around Petrobras, Brazil’s national oil company. The company’s government-appointed directors colluded with a cartel of contractors to arrange bogus bidding rounds, leading to over-invoicing. The proceeds of the scheme went to the directors, including senior politicians, and in some cases, into the coffers of the Worker’s Party (PT), to which both Lula and Rousseff belong. Over the past three years, the case has produced 157 convictions, totalling over 1500 years of prison time, as prosecutors seek to recoup £9 billion in embezzled funds.

While the Operation Carwash investigations are of unprecedented proportions, the case in fact reflects the gradual improvements in Brazil’s anti-corruption mechanisms since the country’s return to democracy in the late 1980s. Brazil now boasts a highly professional civil service, including increasingly well-funded and trained public prosecutors, supported by the equally competent Federal Police. In addition, a vibrant and demanding civil society, as well as fierce competition among political parties have all contributed to the independence and strengthening of anti-corruption institutions. Much of this improvement in fact occurred during President Lula’s two terms (2003-2011).

The Role of Party Politics

Brazilians, however, are divided. On the centre-right, the conviction that “the institutions are working” is reinforced by the fact that the initial subjects of the Carwash investigation have been figures of the traditional left. Petrobras, the company at the centre of the case, is similarly seen by centre-right economic liberals as a bloated and inefficient arm of the state. Predictably, centre-right enthusiasm for the anti-corruption investigation has waned as the accusations have turned to politicians in the Temer government, potentially derailing the party’s policy programme, which is focused on spending cuts in pursuit of fiscal solvency.

The mainstream left, meanwhile, is strongly suspicious of Carwash, viewing it as a partisan project to undo much of the previous government’s legacy in welfare and social protection. This suspicion is in part a panicked reaction to the PT’s decline. It is also a result of the dependence of Brazilian political parties on charismatic leadership, rather than on than robust democratic procedures to elect party candidates and leaders. As a consequence, the potential downfall of former President Lula – still the main PT figurehead and probable 2018 presidential candidate, unless his conviction is confirmed in an appeals court – weakens the whole party. So far, there has been no serious internal effort in the party to renew its leadership.

A Social Transformation

A momentous shift in public sentiment, however, seems to be underway: there is a rapidly decreasing tolerance for corruption and mismanagement. An increasing number of people are demanding neither more nor less government, but better governance.

This is an outcome of the relative success of earlier efforts on both the right and the left, which have secured, in turn, a functioning economy and a strong social safety net. Whatever the partisan fears, it is now politically inconceivable for a government to drastically alter the current macroeconomic consensus, or to eliminate the welfare state. That’s because these two pillars have been jointly responsible for the expansion of a young, informed and aspirational middle class, who now defend the institutions that have empowered them .

As the middle class broadens, attention turns to the quality of service provision, and the conduct of leaders. These have proved to be lacking, and people are more aware of it than ever. While traditional Brazilian newspapers are struggling, new “do-it-yourself” media collectives and international companies (such as the BBC, El País and The Intercept, which launched a Brazilian edition in 2016) are changing the information landscape.

The prosecutors leading the investigations and the Federal Police officers conducting the groundwork are all overwhelmingly young and middle class, rather than older members of the aristocracy. People increasingly identify with them, rather than with formally elected politicians. Many of the young lawyers working on Operation Carwash are also members of the new Protestant churches, whose congregations – if not always their pastors – are particularly strict on work ethic and probity. The lead Carwash prosecutor, Deltan Dallagnol, is emblematic: a fervent Baptist wielding a Harvard Law degree, Dallagnol is 37 years old and operates outside traditional Brazilian patronage systems.

Political scientists contend that policy tends to progress in Brazil through accretion, rather than outright substitution. This process seems to be reaching a new phase. Despite much contention on the surface, historic debates about macroeconomic policy and redistribution are largely settled in society. In order to adjust itself to the growing public sentiment, the political establishment will have to turn to rooting out corruption and inefficiency in the administration of the state. The Carwash metaphor seems particularly apt for this moment, in which Brazilian leaders are being compelled to clean up their act. It remains to be seen how long the investigations will take, whether they will be constrained by politics, and what impact they have on the economy and the political system. For these investigations to yield a real change in leadership, however, the archaic and undemocratic internal structure of Brazilian political parties would need to be challenged and upgraded. For now, there is no sign of this happening.


About the Author

Felipe Krause

Felipe Krause is a PhD candidate in Politics and International Studies at the University of Cambridge. His research is about global drug policy reform, with a focus on Brazil and Latin America. He is also a diplomat in the Brazilian Foreign Service, and was stationed in Dhaka and London.