CORRUPTION-BRAZIL:
Campaign Treasurers Play High Risk Game in Politics

Mario Osava


RIO DE JANEIRO,  (IPS) - The ideal is for campaign treasurers to stay in the shadows. If their names appear in the headlines, it's usually a sign that disaster has struck, because they have become the most frequent catalyst of political scandals in Brazil.

Their importance grew as campaigns became more and more costly and due to the evidence of the decisive role played by financing in elections.

''Money is fundamental. Whoever has the most has the greatest chance of winning,'' Claudio Weber Abramo, executive director of Transparency Brazil, told IPS, citing a study by his organisation on the 2002 elections, which highlighted the ''direct link'' between financial resources and success at the polls.

But it is no secret that campaign financing does not always play by the rules, which are frequently bent, as political analysts and even electoral court judges acknowledge. However, campaign treasurers put at risk the image, and even the career, of their bosses, even if they are acting on their own.

That mysterious figure in politics has reemerged in the person of Waldomiro Diniz, a former government aide in charge of relations with parliament, who triggered the first major crisis to shake the administration of President Luiz Inacio Lula da Silva and his leftist Workers' Party (PT).

The scandal broke on Feb. 13, when the weekly news magazine Epoca reported that a video had surfaced showing Diniz soliciting illegal campaign contributions for PT candidates in the Rio de Janeiro gubernatorial elections in 2002 from a gaming magnate accused of running illegal lottery businesses and of having ties to the Italian mafia.

Diniz was immediately fired and became the subject of a police probe, but the measures did not prevent the government from feeling the heat.

Government minister Jos, Dirceu, Lula's chief of staff and ''right-hand man'', for whom Diniz worked, is under pressure to step down from his post until it is verified whether he had any responsibility in the case, and the opposition is demanding the creation of a parliamentary commission of inquiry.

But a parliamentary probe, which would prolong the crisis, is unlikely due to opposition by the PT and its allies in Congress.

The question of ethics has traditionally been one of the PT's main banners, and the party is seen as cutting its teeth on this crisis, even though it has already been hit by at least two previous scandals, which also involved shady fund-raising activities.

The first erupted tragically, with the January 2002 murder of Celso Daniel, mayor of Santo Andr,, an industrial district on the outskirts of Sao Paulo.

Daniel, a PT leader, had already been appointed coordinator of Lula's campaign for the October 2002 elections and was considered a likely finance minister if Lula won. He was replaced by the current Finance Minister, Antonio Palocci.

The murder shook the country and unleashed a spate of denunciations of corruption, fraud and extortion allegedly practiced by high-level city hall officials in Rio de Janeiro, especially in the urban transport sector. The mayor's brother, Joao Francisco Daniel, said part of the ''kickbacks'' demanded from the companies went into PT campaign finances.

In the middle of it all was Sergio Gomes da Silva, one of Daniel's former close aides, who became a wealthy businessman in the transport sector and still maintained close ties with the mayor. The two were together when Daniel was kidnapped. His bullet-ridden body was later found.

Gomes da Silva, whose nickname is ''Sombra'' (Shadow), was arrested three months ago on charges that he ordered Daniel's assassination. The motive was apparently the mayor's decision to try to dismantle the corruption network allegedly operating within the municipal government.

The denunciations of corruption were left hanging after the police considered the case closed, having put eight common criminals in prison in connection with the murder. They supposedly decided to kill Daniel when they realised who they had kidnapped, because of the enormous coverage of the case.

But prosecutors have decided to reopen the investigation.

It is only natural to suspect that the question of campaign financing was behind the tragedy, a former PT activist told IPS, speaking on condition of anonymity.

The PT was traditionally financed by donations from its activists and supporters and from members of the business community who supported it out of conviction. But things changed in the mid-1990s, he said. ''Sombra'' appeared in Santo Andr, and began to operate ''outside of the normal channels.''

''Interestingly,'' he said, municipal transport policy in Daniel's second term, which began in 1997, was diametrically opposed to that of the 1989-1992 period, when the priority was put on public mass transit and on ''democratising'' transportation in favour of the poor.

During Daniel's second term, the municipal government opted for privatisation of transportation, destroying the conquests made by his previous administration, the source pointed out.

He said the history of the PT would probably have been different if public campaign financing, which is proposed in a political reform currently under debate in Congress, had been incorporated in the 1980s, because with the help of state funds, the party would have been able to continue running on donations from supporters and businesses ''without any strings attached.''

In 2002, the PT also faced another local scandal, in the southern state of Rio Grande do Sul, which it governed. The tapping of a telephone conversation between a PT member and a police chief triggered suspicions that the party was receiving kickbacks from the ''jogo do bicho'', a popular lottery that is illegal but largely tolerated by the authorities.

The PT member was asking the police chief to ease up on law enforcement action against the lottery. An investigation by the Rio Grande do Sul state legislature, which was launched on the urging of the opposition, failed to find any involvement by local government officials.

Illegal campaign funds are like doping in sports: they can improve the candidate's performance, but are lethal if discovered.

Senator Roseana Sarney of the Liberal Front Party, for example, was one of the favourite possible contenders for the presidency in the run-up to the elections in 2002, according to the polls.

But when 1.3 million reals (450,000 dollars) in hard-to-explain cash were found in a company in which she was a partner, Sarney's image was destroyed, as she was unable to convince authorities and the public that the money did not consist of illegally obtained campaign funding.

But the most famous campaign treasurer was Paulo Cesar (PC) Farias, who sparked a series of political scandals in the 1990s. He helped former president Fernando Collor de Mello get elected in 1989, and later set up a network of corruption in the government.

Collor de Mello was forced to step down in late 1992, due to the findings of a parliamentary commission of inquiry, and PC Farias was killed in murky circumstances in 1996.