How fraudulent schemes boosted the president’s party

Author

Gustavo Ribeiro
February 11, 2019 • Reading Time: 7 minutes

In today’s issue: How fraudulent schemes boosted the president’s party. The government v. the “leftist clergy.”

How fraudulent schemes boosted the president’s party

During the October 2018 election, President Jair Bolsonaro’s Social Liberal Party (PSL) managed to elect 52 congressmen—becoming the second-strongest party in the House. However, new information has shown us that the PSL didn’t just benefit from a wave of conservatism around Brazil—it also used fraudulent schemes to fund its candidacies. The party used bogus female candidates to siphon money from the public electoral fund into the campaigns of more high-profile politicians.

Brazil’s electoral legislation forces parties to fill a 30% quota of female candidates—who must also receive 30% of the publicly-financed electoral fund of which every party has a cut. What many parties do—and what PSL did—is use uncompetitive candidates to receive that money and then apply it elsewhere. These candidates are rarely seen in political advertising and end up polling terribly, despite being among those who received the most funding during the election.

PSL chairman Luciano Bivar blamed electoral legislation when questioned about the scandal, saying that “politics is not for women.” He blamed Secretary of Government Gustavo Bebianno, who was party chairman before being named to a cabinet position. Mr. Bebianno, in turn, blamed the state offices of the PSL, “which are the ones responsible for picking who will get more money.”

The government v. the “leftist clergy”

In October 2019, the Catholic Church holds the Pan-Amazon Synod, a 23-day event in which clergy members discuss issues related to indigenous peoples and quilombolas (traditional slave communities) and deforestation-induced climate change. The Brazilian government is calling it a “leftist agenda” and has tried to convince the Italian government to intervene with the See of Rome and avoid direct criticism to the Jair Bolsonaro administration.

Allies of the Brazilian president see the Church as a looming opposition force, as it has been a traditional ally of the Workers’ Party. “We are very worried and want to neutralize that,” said the government’s head of security, Gen. Augusto Heleno. Reports within the government fear that Brazilian priests will use the Synod to attack the administration. Intelligence agents have been instructed to monitor parochial meetings leading up to the event.

Brazilian bishops have criticized Jair Bolsonaro for his pro-business environmental stances—as well as for his attacks on indigenous communities and racial minorities. During the 2018 election, CNBB—the Brazilian National Confederation of Catholic Bishops—supported Workers’ Party candidate Fernando Haddad in the presidential runoff stage.

MONEY

Brazil lobbies for restrictions on agricultural subsidies at WTO 

The Brazilian government is trying to push for fewer agricultural subsidies—especially for developed nations—as a condition to negotiate a new, rehabilitated World Trade Organization, which has been weakened by the trade wars between the U.S. and China. The Foreign Affairs Ministry says Brazil won’t shy away from more high-profile matters such as fishing and e-commerce, but won’t veer away from defending the interests of local producers.

Rich countries are among those who give the most subsidies to agriculture, through cheaper credit, guarantees of a minimum price, compensations for lost crops, and protectionist barriers. Data from the OECD shows that the U.S. alone gave BRL 139bn in subsidies in 2015—against the European Union’s BRL 83bn and Brazil’s USD 4bn.

Brazil’s agribusiness

Agricultural issues are the core of Brazil’s agenda for trading. While the country represents only 1% of world trade, it is a leader in commodity production. The country is over-dependent on seven products (soybeans, meat, crude oil, iron ore, cellulose, sugar, and coffee), which represent over half of Brazil’s commodity exports.

But if Brazil wants other nations to cut down their subsidies, local producers want theirs to stay put. Agriculture Minister Tereza Cristina criticized a proposal of the Ministry of the Economy to slash subsidized credit lines for producers. “Are we willing to bankrupt our agribusiness? I would expect otherwise,” said Ms. Cristina.

Stock market has worst day since truckers’ strike

Ibovespa, the main index of the São Paulo stock exchange, had a terrible Wednesday, down 3.74% to 94,635 points. That was mainly due to profit-taking—when investors cash in their profits after their stock has gained enough value. As the offer of stocks increases, prices go down. But lingering doubts about a pension reform have also played a role in yesterday’s performance.

NOTHEWORTHY

  • Flamengo. Family members identified the last of the 10 victims of a fire at the training center of Rio de Janeiro football club Flamengo, the most popular team in Brazil. Five teenage players were buried over the weekend, and the remaining five should be buried today. Survivors say the air conditioning units—which caused the fire in the dormitory—were installed using shortcuts. Over the last decade, Flamengo received BRL 10m in tax breaks to improve its facilities. 

  • Petrobras.Between 2011 and 2014, Brazil’s state-run oil company Petrobras sold subsidized fuels in the country—with prices below international levels. Since then, it has amassed BRL 71bn in losses. After Petrobras started raising prices, it “recovered” BRL 62bn—but remains BRL 9bn below what it should have earned over the past 8 years.

  • Brumadinho.Fire brigades start today the 18th day of searches for victims of the January 25 dam collapse in Brumadinho. The death toll now stands at 165—with 160 people still missing. Late in 2018, Vale obtained authorization to expand the mines at Córrego do Feijão, where the disaster occurred, despite security reports stating that it could damage the structure of the dam and risk collapse.

  • Reforms.Upon leaving the hospital and returning to Brasília, President Jair Bolsonaro plans on meeting with all party leaders in Congress to discuss adjustments to the pension reform. The idea is to try and soften resistance from Congress—the administration’s proposal promises to be much harsher than the one proposed by former President Michel Temer, which was never voted on by the floor.

  • Health.Per his latest medical report, President Jair Bolsonaro’s health is continuing to improve. Doctors say he has not had any fever and his condition “improved significantly.” On Twitter, he demanded that the Federal Police concludes the investigation on his Sep. 6 stabbing, which the president called a “terrorist act,” and determine “who was responsible for it.”

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