The “new” heads of Brazil’s Congress

In this week’s issue: The most important facts of the week. Bolsonaro’s congressional coalition. How Brazilian markets performed this week. The “new” heads of Brazil’s Congress.

The week in review

• Brumadinho 1. The number of victims of the Brumadinho dam collapse has risen to 115 (71 of which have been identified) — 248 people are still reported missing. Vale, the owner of the dam, was aware that a potential failure would have such a devastating effect, but elected not to remove its cafeteria and administrative facilities from underneath the dam — and directly in the path of the avalanche of spilled iron ore tailings. In 2015 and 2016, the mining giant cut spending on safety by 44%. After crashing by 24% on Monday, Vale stock bounced back in the following days, thanks to a rise in iron ore prices.

• Brumadinho 2.Two engineers who attested to the dam’s safety and three Vale employees responsible for getting it its permits were arrested. The case’s judge said that the documents of a December inspection couldn’t be truthful, as a safe dam would not collapse overnight. Nothing has happened to the company’s board, but experts say they could be charged with homícidio doloso — the equivalent of second-degree murder.

• President(s).VP General Hamilton Mourão filled in as acting president for 48 hours while President Jair Bolsonaro had surgery to remove the colostomy bag he used after being stabbed on Sep.6. Gen. Mourão’s stint, while brief, did not go unnoticed, as he positioned himself as Mr. Bolsonaro’s counterpart on several issues. That rubbed the Bolsonaro camp in the wrong way, as the president’s sons believe Gen. Mourão is presenting himself as a more moderate alternative. In 2018, Eduardo Bolsonaro said his father should pick an extremist running mate, so an impeachment would be unthinkable. The VP is trying to change his image.

• Flávio Bolsonaro.Gen. Mourão’s attempts to be seen as an “alternative” is all the more worrisome for the president since the Supreme Court has denied Senator Flávio Bolsonaro’s request to suspend an investigation into his former driver — suspected of operating a money laundering scheme for him. Senator Bolsonaro also has ties to urban militias in Rio de Janeiro (the traditional voting base of Jair Bolsonaro), and many Brasília insiders believe that it is only a matter of time until the scandal hits the presidential palace.

• Industry.Brazil’s industrial production grew by 1.1% in 2018. While still far from juggernaut status, the result represents the second-straight positive year, after three years in which the industrial sector shrank.

• Far-right.Former White House advisor Steve Bannon announced Congressman Eduardo Bolsonaro as the Latin-American leader of The Movement, a Brussels-based far-right organization created to spread populist Trump-style politics globally.

Bolsonaro’s coalition in Congress

As The Brazilian Report predicted in October 2018, Jair Bolsonaro’s administration should have plenty of congressional support — at least as the new legislature kicks off. Besides being the second-biggest group in the lower house, Mr. Bolsonaro’s Social Liberal Party heads an 11-party parliamentary front amounting to 301 seats (out of 513). If all votes are well whipped, the government would only need seven additional votes to achieve a “constitutional majority,” that is, the necessary votes to pass constitutional amendments such as the austerity reforms the administration is championing.

The “new” heads of Brazil’s Congress

The 2019-2023 legislature kicked off on February 1, with both chambers of Congress set to choose their leaders for the next two year. In the House, the election for the Speaker position was rather predictable, with right-wing incumbent Rodrigo Maia winning a third consecutive term — which is neither a victory nor a defeat for the government. Mr. Maia is not exactly close to the Executive branch, but has shown himself committed to austerity reforms.

The Senate President election, however, became a true circus — and a vote has yet to be held after disputes over the procedure that were taken to the Supreme Court.

According to the Senate’s rulebook, the governing board of the chamber is selected through a secret ballot. However, supporters of Jair Bolsonaro, in a push to gain more influence in the upper house, began calling for an open vote. That would undermine the chances of Renan Calheiros, a veteran who has presided over the Senate for three terms in the past. Riddled by corruption scandals, Mr. Calheiros would not be the favorite if Senators were forced to expose their choice. But, a political animal of unparalleled skills, he would be a near lock-in if the ballot is secret.

In Friday’s voting session, a poll in favor of an open ballot was pushed through and the floor exploded. Renan Calheiros’ allies barked that Davi Alcolumbre, presiding over the session, was “usurping the Senate;” Mr. Calheiros himself threatened to physically assault a fellow senator, while another of his allies, Senator Kátia Abreu, marched up to the president’s table, stole Mr. Alcolumbre’s folder and proclaimed, “if you can preside over this session, then so can I!”

After 10 pm, Davi Alcolumbre was forced to suspend the session, calling for the Senate to meet again on Saturday. In the wee hours of the morning, Supreme Court Chief Justice Dias Toffoli issued an injunction to order the vote go ahead by a secret ballot.

At the time of publishing, Senators are currently in session to decide on the chamber’s new president. The Brazilian Report will be closely following all the developments in Congress.

How the government’s political negotiator could alienate Congress

Since Jair Bolsonaro won the presidential election, Onyx Lorenzoni — one of his close advisors — has been seen by other groups within the “Bolsonarism” movement as a political liability. Ironically, he was named Chief of Staff, whose job it is to promote a bridge between different branches of government and secure the administration a solid congressional base. A month into the term, Mr. Lorenzoni has been anything but that — and has created rifts in both congressional chambers.

The Chief of Staff actively boycotted Mr. Maia’s and Mr. Calheiros’ bids in the House and the Senate, respectively. Accordingly, after being re-elected, the Speaker stated that, while he is committed to its neo-liberal agenda, he owes nothing to the government. In the Senate, things are even more complicated. Senator Davi Alcolumbre, partly responsible for the degeneration of Friday’s session, was acting on Mr. Lorenzoni’s behalf. Meaning that, if a secret vote is confirmed and Renan Calheiros is chosen as Senate President, he could turn against the government. The past has shown that Mr. Calheiros can be a ruthless adversary.

Mr. Calheiros offered to act as a buffer protecting Senator Flávio Bolsonaro from accusations of links to urban militias. Now, he could use the president’s son to get what he wants from the administration, that is, placing his allies in key positions within state-run companies — the kind of horse-trading practices the president said he would fight.

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