Media Leaks and Corruption in Brazil

The Infostorm of Impeachment and the Lava-Jato Scandal

Mads Bjelke Damgaard

• Publisher: Routledge
• Year: 2018
• Print ISBN: 9780367666040
• eBook ISBN: 9781351049283
• Edition: 1
• Topic: Política y relaciones internacionales
• Subtopic: Política mundial

Analyzing the political consequences of the most extensive corruption investigation in recent Latin American history, Operação Lava-Jato, Media Leaks and Corruption in Brazil answers two central questions about the contradictory effects news media has on political systems. First, how can political actors in a seemingly well-functioning democracy quickly override checks and balances, and replace a head of state with a corrupt vice-president? Second, how can very active news media, while ostensibly performing the role of the watchdog, still fail to deliver media accountability to the public?

Combining a quantitative view of the media sphere with case studies of the leaks, legal actions, and alliances forming and breaking in the Brazilian Congress, Mads Bjelke Damgaard demonstrates that the media's attention to leaks and investigations of corruption paved the way for Dilma Rousseff's impeachment. By timing the disclosure of information in scandals, actors with inside information were able to drive the media agenda and let some scandals escape from the limelight. The book delivers an in-depth study of how scandals become political weapons in a time of media personalities and post-politics.

This book will interest scholars of Latin American Studies, and Brazil, and the broader fields of media studies, democracy studies, and journalism studies.

1 Introduction

In March 2014, a case of corruption was uncovered in Brazil that would go on to shake the country’s democratic institutions to their very core. Through blind luck, a few arrests snowballed, and the case became the largest investigation of political corruption ever in Brazil – a country already infamous for dirty politics. However, the corruption investigation, known as Operation Lava-Jato, did not merely result in trials and sentences for the culprits. The Lava-Jato case had many impacts – but the most profound impacts went well beyond the individuals investigated in the case.

Spinning off from the explosive political atmosphere developing along with the Lava-Jato probe, the elected President Dilma Rousseff became the target of dozens of petitions for impeachment, and was ousted in 2016, six months after the installment of impeachment proceedings. In this atmosphere, much-needed political and economic reform was obstructed indefinitely, and the difficulties of constructing governable majorities in Congress kept the state’s fiscal policies in disarray for three years in a row.

Meanwhile, scores of federal representatives, senators, and governors became targets in an avalanche of new investigations precipitated by the Lava-Jato probe. Rousseff’s vice-president stepped in and picked a cabinet from the ranks of these congressmen, but four of the minister were forced to resign on corruption charges, with two of these in prison at the time of writing.

With no elections held, and despite the absence of criminal charges against the impeached president, the political program of the Brazilian government could change completely overnight, disrupting social conquests of the last decade and manifesting the prevalent Latin-American trend toward (or back to) neo-liberal economic politics. The Lava-Jato scandal not only made this sea change possible, but also precipitated the fall of a whole generation of politicians, and obliterated the citizens’ already negligible trust in political authorities. Furthermore, targeting the top construction companies of the country as well as the continent-leading state oil company Petrobras, the scandal brought investments and public works in an already retracting economy to a standstill.

Since 2014, evidence and material of the Lava-Jato probe have continuously been made public to journalists by the prosecutors and the regional court of Curitiba, but in addition to this, the same journalists have been fed morsels (and sometimes torrents) of information in the form of leaks. Like the WikiLeaks and the leaks of the Panama and Paradise Papers, the Lava-Jato leaks have been continuously curated by journalists, and like these other famous leaks, the sources remain undisclosed. The accumulated data material, over the course of three years, is by now enormous, much like the internationally known leaks, reaching terabytes of data at the time of writing. In contrast to the international leak cases, however, the journalists of the Brazilian news media have not been in complete control of the material pertaining to the case.

The unauthorized leaks of key information in the case were distributed to different media outlets, probably for a variety of strategic reasons and from various sources with access to the investigation. The timing of the disclosure had a great impact on the political atmosphere. In contrast to instantaneously publicized data dumps such as the Panama Papers, the Lava-Jato case unfolded and leaked over the course of several years, adding a new episode to a crescendo of political drama each time new leaks appeared. In 2016 alone, the leaks of the Lava-Jato operation had profound consequences.

The consequences, however, were far more profound than, say, the disclosure of the Panama Papers in the same period, involving political and business elites of many other countries, including elites in the rest of the so-called BRIC countries. While the Panama Papers, detailing international tax evasion schemes, also made international headlines and meant public disgrace and interrupted careers for some European bank executives as well as the Icelandic prime minister, it barely piqued the interest of Russian and Chinese political authorities, and the systemic issues revealed with the leaked documents were virtually ignored around the world. The disclosure of corruption in the Brazilian political and economic elite, on the other hand, had critical consequences for the whole political paradigm of the nation, for the state apparatus and economy, as well as the balance between the branches of government. The ousting of the president, and ascension of the vice-president with congressional support from the former opposition, especially, was a surprising and monumental turnover: Surprising because erstwhile President Dilma Rousseff was not at that point investigated in the Lava-Jato probe, but instead was impeached on charges of being personally responsible for delays in transfers of funds between the National Treasury and public banks. Yet, in the crucial vote for her impeachment, held in the lower House of Congress on April 17, scores of federal representatives spoke of Rousseff’s corruption. This belied the fact that the Rousseff administration had early on refused to interfere in the Lava-Jato investigations, even as it reached the political and business elite of Brazil.

The impeachment was a monumental event, because it resoundingly broke the governance model of welfare capitalism in Brazil, spearheaded for 13 years by the Worker’s Party. By indicting, charging and sentencing key figures of the Worker’s Party cadre, including the ex-President Lula, the party image was severely tarnished and the left wing of Brazilian politics was in tatters.

Finally, the probe and consequent trials broke with the established pattern of impunity common in Brazilian political corruption cases. The operation came to herald – perhaps prematurely – the end of one of the mechanics that made the particular Brazilian hybrid regime of coalitional presidentialism work in practice. Grafting and directing contracts within public procurements to political allies may have been the oil that greased the wheels and made the government coalitions work. Now, with a host of politicians under scrutiny and with an empowered judiciary and prosecuting branch of government, such a mode of striking political deals may have been curbed. This, to be sure, is good for democracy, but the chances of future consensus among the key players in the political arena looks very uncertain at the time of writing, six months before the 2018 general elections. What kind of majority will govern Brazil in the years to come? What are the tools that can ensure stable coalitions in the future? Questions such as these are still unanswered, in consequence of the turmoil launched with the Lava-Jato case. In this political chaos of corruption scandals, recession, and paralysis of important reform measures, it is pertinent to consider the role played by scandals in catalyzing political transformations.

The Conundrums of the Corruption Probe

Social and political scientists are normally keen on explaining societal change, and have developed large repertoires of theory to account for the changes seen in contemporary societies. Every once in a while, these repertoires fail to deliver answers. One such moment is arguably the Lava-Jato case. In a period of less than two years, so many events conspired to change the political scene that established academic perceptions about Brazilian society and politics couldn’t keep up. In this book, I will focus on one of the theoretical challenges posed by this surprising turns of events: The democratic problem of too much visibility. The accountability overload and excessive corruption disclosure produced cascades of public signals in the news media – and with these cascades, news media ended up disregarding relevant information about the corruption of the political actors grabbing the reins of the federal government. With this preliminary statement of the theoretical challenge, I have already introduced one of the concepts that could increase the scientific understanding of the conundrums posed by the Lava-Jato case.

After the media storm of the Lava-Jato scandal and the impeachment of Dilma Rousseff, several accepted truths about Brazilian democracy capsized, posing the following questions to researchers: First, how could political actors in a seemingly well-functioning democracy quickly override checks and balances, ousting the president Rousseff and putting a corrupt vice-president in her place? Second, how could the nation’s very active media, while they ostensibly were performing the role of the watchdog, still fail to deliver media accountability to the public? Third, political scientists had more or less agreed that the executive branch of the Brazilian system held too much power relative to the other branches. That notion was completely undermined with the impeachment proceedings. How could an elected president not maintain even a third of the congressmen as allies, given the budgetary and formal powers of the executive branch? Fourth, it is generally supposed that the independence of the judiciary is a bedrock of the rule of law, but in this case, it seems that independence of the judiciary is apt to mutate into political interests. Could it be that there is such a thing as too much independence, or in other words, that the Brazilian system of checks and balances is, in itself, neither balanced nor checked properly?

These tendencies – the bypassing of democracy, the accountability failure in plain sight, the impotence of the presidency, and the imbalance of the judiciary – are now appearing as issues on the agenda in Brazil. At the same time, each of these tendencies poses questions relevant to democracies across the globe, especially in the age of virally spreading information, 24/7 news, and media personalities grabbing the positions as leaders of the world’s largest democracies. Therefore, the case of Brazil is a valuable lesson, not just to scholars, but to anyone interested in the state of democracy today.

Finally, the Lava-Jato investigation came as a big surprise in itself, because corruption scandals have been the norm since the military dictatorship ceded the reins of the country to civilians in the 1980s. Since then, barrages of scandals and disclosure of corruption have reached front pages of newspapers, the airwaves, and the evening TV news, but accused politicians were rarely convicted. The de facto law of impunity was notoriously hard to break, even as public prosecutors, little by little, gained political independence from the 1990s and onwards. But the astounding success (which to many spectators should be interpreted as the astounding excesses) of Lava-Jato has broken that vicious cycle, it seems. In order for readers not familiar with the recent Brazilian history of political corruption, I will present a small tour of the environment of media and politics since the country’s transition, in the mid and late 1980s, to democracy.

25 Years of Media Exposés

The censorship institution of the military dictatorship, which had repressed free journalism in Brazil in the 1970s (Kucinski 1991), petered out with the gradual opening of democracy in the 1980s. As the generals stepped down, a new era was inaugurated in press-state relations, and this era was characterized by an explosion of corruption scandals during the civilian presidency of José Sarney, attributable both to high levels of corruption and the newfound freedom of press (Lattman-Weltman and Abreu 2001: 12ff.). Arguably, the heyday of Brazilian investigative journalism was the 1992 disclosure of corruption within the government of Fernando Collor de Mello. The young president was the first to be elected in free elections after the military left the presidential palace in Brasília. Collor moved into the Palácio de Planalto in 1990 on a wave of support for his image as the “hunter of maharajas,” the broom that could sweep out the overpaid and corrupt public servants still lingering in the country’s bureaucracy. However, Collor was exposed himself as corrupt by his brother in the weekly magazine Veja in 1992. He resigned before impeachment proceedings were finalized, in face of a massive wave of popular protests in the streets (Figueiredo 2010). His vice-president, Itamar Franco, stepped in, but he struggled to find a cure for the four-digit inflation that Collor had left behind, hollowing out the economy.

Only in the middle of the 1990s did the Brazilian government manage to stop the hyperinflation marring the period after the return to the democracy. Fernando Henrique Cardoso (former Minister of Finances in the Itamar Franco administration) was the name of the new president who headed the team of technocrats behind the successful Plano Real that ended the spiral of inflation (Skidmore et al. 2010: 343). Cardoso’s team worked within the boundaries of orthodox economics and the so-called Washington consensus until his second term was up in 2002. Under Cardoso, many corruption scandals surfaced, but his appointed prosecutor-general of the republic decided to shelve the vast majority, and only let 60 out of 600 cases of grand political corruption pass into court rooms.

At the end of his second period, Cardoso was unable to end a recession, and this gave the leader of the opposition, the union boss and socialist Lula, his first win in a presidential election, despite running in every election since the first free election in 1989. Lula represented (and had founded) the Worker’s Party PT, and as a former steel worker and union leader he had an image of being close to the common people. However, in his successful bid for the presidency he still had to convince the economic elites, both in Brazil and in the international organizations such as IMF and the World Bank, that he would maintain Brazil on the path of orthodox economics. Lula managed to combine that pressure from the international financial markets with his socialist ideologies, inaugurating several very successful cash transfer programs and lifting millions of citizens out of poverty without draining the public coffers (ibid.: 346). The neo-developmental model of the Lula administrations (Bresser-Pereira et al. 2014) and the transfer programs were lauded across the world, as the country joined with other developing giants under the abbreviation of “BRICS.” The middle class expanded enormously in Lula’s two terms as president. However, he and his party came under severe fire in a corruption scandal known as the Mensalão case.

The Mensalão scandal (named for the neologism used to describe the big monthly payments to parliamentarians) drew headlines throughout the country in 2005 and 2006. Money was allegedly pulled from slush funds of Lula’s PT and dealt out to congressmen in order to sway votes. While Lula remained unscathed, and succeeded in getting re-elected in 2006, central members of his inner circle in government and the party were indicted and went on trial, after many delays, in 2012. Sectors of the electorate became disappointed with the corruption in PT, a party used to defending ethical politics loudly. However, in contrast to the Cardoso period, federal prosecutors had by then obtained independence to pursue investigations into national political elites. The laws that made this possible were signed by Lula, and – undeniably – constituted a great step in constructing a functioning set of checks and balances in the Brazilian democracy.

The trial of the Mensalão case before the Supremo Tribunal Federal (the Supreme Federal Court) was big news: The exceptional number of defendants, their political positions close to the presidency, the vast amount of documents, and the potential to seriously harm the governing party fueled the intense interest of the media. As the trial progressed, the adamant will of the majority of judges to condemn political corruption severely were also hailed as a historical event in the media, a milestone in the country’s continuous struggle against corruption (Damgaard 2015, Michener and Pereira 2016, Power and Taylor 2011: 33). The trial happened to be the first time after the transition to democracy that a minister was sentenced for corruption in the Supreme Court – even the case of Collor had ultimately been filed away.

Lula had more or less left the political scene by the time of the Mensalão trial, recovering from cancer, and left the presidency to a former minister of Mines and Energy, later chief of staff in the cabinet, Dilma Rousseff. Rousseff had initiated her presidential period in 2011 with a grand gesture of cleaning out the ranks, by sacking all ministers denounced in the press. Combined with impressive growth rates in the economy and a continuously flourishing middle class, Rousseff managed to remain relatively popular, even as her party was the target of scathing critique in the media coverage of the Mensalão trial.

Two international milestones dominated the political arena in the years following the Mensalão case. Brazil prepared to host the World Cup in 2014, and the Chinese economy began to slow down after decades of rapid growth. This was gradually felt in the Brazilian sectors of commodities, especially soy and mineral exports, and eventually meant reduced tax income and empty public coffers. On the domestic scene, a wave of protests against a bus fare increase picked up steam and erupted into massive street protests in June 2013. The protests saw millions in the streets of the large capitals, numbers not seen since the 1980s and early 1990s. The protesters were not united under any single banner, as the multitude in the streets branched off from the topic of public transportation fares (Cardoso and di Fatima 2013, Saad-Filho 2013). However, the mainstream media quickly cast the protests as being focused on corruption and governmental overspending, especially on the World Cup prestige construction projects (Avritzer 2016). Somehow, in the media discourse interpreting the June protests, the supposed milestone of the Men...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright page
• Table of Contents
• List of Illustrations
• List of Abbreviations
• 1 Introduction
• 2 The Media System and Political Journalism of Brazil
• 3 Leaks and Their Effect in Media and on Politics
• 4 Lawfare and the Judiciary-Political Relations during the Lava-Jato Corruption Scandal
• 5 The Informational Cascades of Impeachment and the Lava-Jato Scandal
• 6 Coup d’état or Constitutional Act?
• Afterword: Lula and Lava-Jato
• Index