Arthur Ituassu, 18. august 2005

President Luiz Inácio Lula da Silva addressed the Brazilian people on the morning of Friday 12 August in a speech transmitted live on radio and TV networks across this vast country. It was three months since the eruption of the worst political crisis in Brazil since the impeachment of one of his predecessors, Fernando Collor de Mello, in 1992.

The event also marked the end of another week of tough news and crushing revelations for a president elected in October 2002 by a people – especially Brazil’s poor – as an icon of hope, honesty and a better life for themselves and their country. His Partido dos Trabalhadores (Workers’ Party, PT) entered government at the same time after three failed campaigns (1989, 1994 and 1998), carrying the promise of rule by clean hands that deserved the trust of the electorate.

Lula was never a good speechmaker but he has always known how to talk to people, establishing his authority through simplicity: a former factory worker with no university degree who speaks to his people as one of them. But this was different. In place of the usual confident and powerful personality, Lula appeared weak, tired and most of all ashamed. “I feel betrayed and indignant”, he said. “We have to apologise”.

Who the “we” is Lula did not answer, and by doing this he seemed once more to be trying to portray himself as a victim of the cascading corruption scandals that have overwhelmed his administration.

It could have been worse. On the evening of Lula’s address, the president was to have dinner with Venezuela’s controversial (and military officer) president, Hugo Chávez, a visit not scheduled by the Brazilian foreign ministry. The encounter was worrying enough to many Brazilians, especially those who remember the way that another of Lula’s predecessors, João Goulart, radicalised the left and polarised the country before being overthrown in a military coup in 1964. Lula’s rhetoric during the extended Brazilian crisis have included accusations of an “elite plot” against him; by meeting Chávez at this particular moment he made a lot of people fear the venezuelanization of the country.

How did Brazil, and Lula, get to this point? What now are the prospects for Brazilian democracy, at least until the November 2006 presidential and legislative elections?

Lula’s government has proved itself to be a big castle made of sand. In June 2005, a skilful congressman called Roberto Jefferson, not noted for his honesty, began accusing the Workers’ Party of paying congressmen to vote on the government’s side in the Brazilian parliament. Jefferson launched his campaign after himself being involved in a corruption scandal, which he claimed was in fact part of a plot orchestrated by José Dirceu, Lula’s powerful chief of staff. Indeed, Dirceu was more than Jefferson’s main target: he is the political core of Brazil’s recent convulsion, around which all its events and personalities seem to spin.

The authority of Lula’s government at its inception was represented by a triangular power structure, with the president at the apex and two senior figures at the two vertices: José Dirceu as head of political coordination, and the finance minister Antonio Palocci as head of economic management.

Roberto Jefferson’s assault on José Dirceu was classic and deadly. He showed not a single document, but merely invited Brazil’s biggest newspaper (Folha de São Paulo) and gave them a lengthy, two-part interview. The main item on the charge-sheet was simple: that the PT was paying legislators of other parties a monthly allowance (mensalão) in return for their votes, and that the coordinator of the whole plan was none other than José Dirceu.

José Dirceu is a high-profile figure in Brazilian political life, well-known to the country’s political class and media for many years. In exile after the coup that deposed Goulart, he trained as a guerrilla in Cuba, and returned in disguise with a new identity: for years, he did not even reveal his real name to his wife. He was successful in studies and politics, where his Stalinist expertise greatly helped his rise to become Lula’s most trusted aide.

Dirceu’s guiding mantra was clear to everyone: it does not matter how you do it as long as you do it. By operating according to it, Dirceu became both feared and powerful inside the PT and (after 2002) the government; and it is also how he planned to reach the presidency after Lula’s second term expired in 2010.

The press was quick to pursue Jefferson’s initial allegations, closely followed by prosecutors. In their wake, a waterfall of new scandals, accusations and stories emerged. Three months on, an entire web of corruption – involving political parties, banks, prostitution and money-laundering – has demolished what was left of the moral authority of the government, the Workers’ Party, and Lula himself.

José Dirceu did not long survive Roberto Jefferson’s fifteen minutes of fame: he resigned as chief of staff on 16 June, still protesting his innocence, and is now in danger of losing his membership of congress. (Antonio Palocci’s reputation, by contrast, grows daily as he – and Brazil’s macroeconomy – remain untouched by the current crisis). But if Dirceu is at the political centre of Brazil’s earthquake, an even less salubrious figure – Marcos Valério de Souza, a businessman from the state of Minas Gerais – is at its financial heart.

Marcos Valério de Souza was the man with the money, who bankrolled the entire process after first withdrawing a little more than 50 million reais (around $50 million) in loans from two banks (BMG and Banco Rural, where the ex-wife of José Dirceu recently acquired a job); in exchange he provided only the guarantee that his advertisement agency would receive government contracts and funding in the near future.

The money known to have been distributed, perhaps only a small fraction of the total, was given by prominent PT officials – party leader José Genuino, financial director Delúbio Soares, and José Dirceu himself – to members of smaller parties in exchange for political support. The Partido Liberal (PL) of Brazil’s vice-president, José Alencar, seems to have been awarded more than 10 million reais to partner Lula in the 2002 campaign; this money was never officially declared, as was true of the similar amount paid in an illegal offshore transaction to Duda Mendonça, the marketing chief of Lula’s presidential campaign.

The ethics commission of the Brazilian parliament is investigating at least fourteen congressmen, all of who may lose their mandates. Another list of names is even more feared by congressmen – those present at the lavish parties, complete with prostitutes, hosted by Marcos Valério de Souza in hotels in Brasilia – who will have to face not only justice, but also their wives.

The Brazilian crisis raises two main questions: what is going to happen now, and how did it happen at all?

In the immediate future there are three possibilities. First, Lula and José Alencar could be impeached, which could lead the ultra-conservative speaker of congress Severino Cavalcanti to call early presidential elections. The opposition parties – principally the PSDB of former president Fernando Henrique Cardoso and the PFL (party of the old, rural, conservative coronel elite) – have decided not to press for impeachment; but nobody knows what revelations may yet come to the surface.

Second, Lula may keep the government going until the November 2006 elections before deciding to leave office without attempting to secure a second term. He might spend the next year attempting to separate himself from the Workers’ Party and cleaning his name in face of the historical record. The absurd result might be having Lula in the presidency and the PT in opposition – since party dissidents want to expel both José Dirceu and his clan, and the cautious economic policies of Antonio Palocci and colleagues.

Third, Lula could try to win re-election under the flag of a renewed PT, though in doing so he would risk taking to defeat a party trying to breathe again after its most difficult moment. In any case, how the president and his party will respond to their predicament is the core political theme now in Brazil, and even the most optimistic are worried about how a crisis of the presidency itself would influence Brazil’s current, relatively stable economic situation.

Behind such calculations, the Brazilian people – watching, discussing, and worrying over all this every day for three months, and almost not believing in what they see – are asking a deeper question: how their country’s governance stooped so low. The Workers’ Party and President Lula himself were exactly the ones who were supposed to do politics differently in Brazil. As I have written in an earlier openDemocracy article, Lula was the icon of change, representing the transformation of Brazilian politics by virtue. The one who had been poor and was thought to be the same as the poor; the hope for schools, hospitals, a better life. Three years on, there are no schools, no hospitals and no hope.

What went wrong? What is wrong in Brazil is the idea of the republic. Who runs the public thinks it owns the public. This does not concern only the left, the right, liberals, Marxists or nationalists. Public is never public here but only an expression of power and authority.

This article is published by Arthur Ituassu, and appeared originally on openDemocracy.net under a Creative Commons licence. To view the original article, please click here.