Brazil: Temer and Cunha, Authors of Rousseff’s Ouster, In the Crosshairs of Corruption Investigation

Antonio Cruz/Agência Brasil

BRASÍLIA, Brazil – Eduardo Cunha and Michel Temer, the suspended head of the Chamber of Deputies and the interim President of the Republic of Brazil, respectively, the two leaders of the effort to suspend democratically-elected leader Dilma Rousseff, are now both in the crosshairs the investigation into the massive Petrobras corruption case.

In early May, a majority in the Brazilian Senate (upper house of Congress) voted to remove incumbent Dilma Rousseff of the Workers Party (PT) from power; 55 voted for Rousseff’s impeachment while 22 voted against. A majority of the Chamber of Deputies (the lower house of Congress) also voted in favor of impeachment several weeks prior to the Senate vote.

The vote saw Rousseff suspended from her position for up to six months pending an investigation into her alleged wrongdoing, meaning that a decision has to be made whether she will be reinstated or face a trial. According to the Impeachment Commission’s timetable, a decision will be made by August 2 by the full 81-seat Senate and requires a two-thirds majority (54 votes); 55 Senators voted to suspend Rousseff in May.

Rousseff voiced her anger and disappointment at the “unspeakable pain of injustice” carried out against her. “My government has been the subject of intense sabotage,” Rousseff said from the Palácio do Planalto, the seat of government, as she stood surrouned by her cabinet members and supporters on the day of her suspension.

Nearly 55 percent of Brazilian parliamentarians have some sort of criminal case opened against them, mostly in relation to corruption, bribery or money laundering while others are accused of assault and even kidnapping. Those same politicians, however, voted to unseat Rousseff, one of the very few politicians in the nation that has not been directly accused of illegal enrichment.

The official reason given for the action against the leader is that she allegedly transferred parts of the national budget between different funds in order to present a better picture of the national economy. This is standard practice in Brazil and in many nations (and has been seen especially in recent years with the global economic crisis) and while it does present a murkier view of a government and its transparency, it has never come close to toppling a national leader. In truth, judicial experts in Brazil have blasted the whole process as “irregular.”

Instead, budget-shifting tactics like these by any given government will have their consequences at the next election, especially in Brazil, one of the world’s biggest democracies. In this case, however, politicians have used public discontent over a stagnant economy and rampant cases of corruption (in which most of them and their parties are involved) to use Rousseff as a scapegoat.

In particular, most members of the big-tent (but currently right-leaning) Brazilian Democratic Movement Party (PMDB), which withdrew itself from the ruling coalition recently, have come out against Rousseff, as have members of other parties that were once allies.

The most notable PMDB members to do so include Eduardo Cunha, the man who started the impeachment effort and was the President of the Chamber of Deputies of Brazil until mid-May when he was removed due to allegations of corruption and obstruction of justice.

Another notable figure is Michel Temer, Rousseff’s Vice-President and now-interim leader who was recorded speaking of himself as President and about his presidential plans two months before the Senate’s impeachment vote even took place.

Lawyers speaking on behalf of Rousseff, who has still not been implicated in any corruption case, said that she was removed from power by other politicians with the sole purpose of putting an end to Operation Lava Jato (Car Wash), the investigation into allegations of widespread corruption.

With Rousseff out of the way, her legal team argues, the investigation would be sidetracked or stopped altogether by the interim government. In turn, the citizenry would not object much to the stoppage of the investigation because the most powerful politician in the country would be impeached as the biggest result of the ‘anti-corruption’ campaign.

Rousseff’s lawyers have presented tons of evidence to back their claims including numerous recordings held between members of the PMDB (whose members are the most represented on the corruption lists compiled by prosecutors) in which the dialogue clearly suggests ousting Rousseff with the aim of saving themselves by stopping the investigation.

Romero Jucá, Temer’s close ally and Minister of Planning, Budget, and Management, stepped down three weeks ago from that post after a recording involving him and a Petrobras figure was released. Jucá became the third Temer cabinet member to resign over corruption allegations since the interim leader assumed power on May 12.

Most notably, Operation Lava Jato has focused on the Petrobras scandal, in which prosecutors allege that over $1 billion was doled out and laundered to the the semi-state-owned energy company’s executives in exchange for valuable contracts with construction and engineering companies.

Although most of those named in corruption case do not come from Rousseff’s PT, the party has bared the brunt of the blame and so has Rousseff as she was Energy Minister (2003-2005) during a part of when the alleged crimes took place, and she also sat on the board of Petrobras during this time.

Several prosecutors overseeing the case, which began to filter out to the public in March of 2014 and is being called the biggest corruption case in Brazilian history, have cleared Rousseff of any wrongdoing and say that she did not know what was happening behind her back.

According to the Attorney General handling the case, the corruption began with kickbacks in 1997 (14 years before Rousseff even became President) during the administration of center-right Fernando Henrique Cardoso (1995-2003).

Regardless, Cunha and Temer led the charge against Rousseff and were successful in their aim of having her suspended from office. The two men, however, are now facing corruption issues of their own in a turn of events.

Cunha, who was temporarily removed from his position as the President of the Chamber of Deputies of Brazil in mid-May due to allegations of corruption and obstruction of justice, has been scrutinized for several months now by the Ethics Committee (a parliamentary panel) for lying about his role in the Petrobras scandal and about having illegal, multi-million dollar accounts abroad in Switzerland and embezzling millions more.

In an influential decision, that same panel voted this week that Cunha should be stripped of his position as a Federal Deputy. The 513-seat Chamber of Deputies will soon vote on whether to take this action against Cunha and if a simple majority (257) approves, he will then be removed from the position and will be banned from serving in the same capacity for at least eight years.

Cunha has claimed innocence and said that he is being targeted unfairly by a biased group of politicians. He is planning to appeal the decision with other parliamentary panels and committees.

Just after he made his first appeal, however, more charges came as the Attorney General of the southern State of Paraná alleged that Cunha received a $1.5 million bribe from a Petrobras executive in exchange for expedited permission to drill in a new oil field of the coast of Benin, the West African nation where Petrobras has a subsidiary. In addition, the same case alleges that Cunha and his young wife, Cláudia Cruz, embezzled over $7 million.

Members of the Brazilian media say that if Cunha feels abandoned by his political allies and is stripped of his position, he will then “name names” and implicate scores of other politicians. Already implicated and being investigated (but not officially charged or condemned by a committee yet) is another PMDB man: Renan Calheiros, the President of the Senate. He, like Cunha, is suspected of taking bribes from Petrobras executives and embezzling millions of dollars.

All of these developments mean more trouble for Temer given that as more and more figures from his interim government fall, many parties that joined his anti-Rousseff crusade may choose to simply leave and abstain from the process or even back Rousseff’s reinstatement during the Senate vote. As a reminder, 54 votes are needed to impeach Rousseff and 55 Senators voted to suspend Rousseff in May. This means that she only needs two Senators to change their votes by August 2.

If Rousseff is impeached, Temer would rule until the end of 2018 (when her mandate is scheduled to end) but if she is reinstated, she will then resume with her job. Rousseff, however, has said that if she is reinstated, she would call for a public referendum that would open the door to early elections, a promise that could earn her the support of at least a few Senators.

If the problems of his party members and government (an 11 percent approval rate according to the latest polls) are not enough, Temer himself has now been implicated in the Petrobras scandal.

Sérgio Machado, the former head of Transpetro (a chemical transport subsidiary of Petrobras) and the executive heard speaking to Jucá on the recordings, is now an informant in the massive case that has relied on catching “smaller fish” in order to catch “bigger fish” by offering reduced sentences in exchange for information.

Machado, who also served as a Federal Deputy and Senator in the past, testified in front of the Supreme Federal Tribunal that he gave nearly half a million dollars in illegal campaign funds in 2012 to São Paulo mayoral candidate (and close Temer ally) Gabriel Chalita of the PMDB. According to Machado, Temer was the specific individual that requested this donation and even negotiated on the amount. Temer was also the one that carried out the transfer and handover of the funds clearly knowing that it was an illegal act.

Machado said that this was just a small part of the $30 million he doled out in illegal campaign funds to more than 20 politicians from an array of political parties (but mostly from the PMDB) that year.

For his part, Temer, who was the head of the PMDB from 2001 to April of 2016, called Machado’s accusations “false, reckless and irresponsible.”

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