CHALLENGES 2005-2006:
Corruption in Brazil - Old Tricks, New Dogs
Mario Osava

RIO DE JANEIRO,  (IPS) - Corruption in Brazil is an age-old practice that is fuelled today by the same sources as in the past. The only novel aspect of last year's enormous scandal was the involvement of the Workers' Party (PT).

The leftist PT, which emerged in 1980, built up an image of an ethical party, but "there is no qualitative difference" with respect to earlier cases, said Claudio Weber Abramo, executive secretary of Transparency Brazil, the national affiliate of the global anti-corruption watchdog Transparency International.

The "institutional roots" of the illegal funds used for political ends remain intact in the country after the 2005 scandals, and there are no concrete proposals for eliminating them, which indicates that the problem will continue, he told IPS.

There are two main sources of corruption in Brazil.

First of all, each incoming government has at least 22,000 public posts at its discretion, which means the public employees and officials are hand-picked, without the need to go through any selection process whatsoever.

That constitutes a weapon in negotiations with the legislature, because the executive branch offers posts to the parties or lawmakers in exchange for support in Congress, Abramo pointed out.

Through that mechanism, all Brazilian governments, not only the current PT administration, expand on the legislative support that they have won in elections. The eradication of this distortion is never discussed, because no party is interested in doing so, since the opposition also makes use of the system, said the expert.

The second major source of corruption, the discretionary budget, allows the executive branch to employ and manipulate public funds according to its interests at any given moment, and "to use them to corrupt," he added.

Public tenders are also used to trade favours between government officials and companies contracted as suppliers, in violation of the rules.

The problem in Brazil, said Abramo, "is not the laws, it's how they're enforced." The situation is further aggravated by the funding shortfall in state oversight bodies.

But Joao Sampaio, a rubber planter from the southern state of Sao Paulo who is the president of the Brazilian Rural Society, an agribusiness association, sees things in a different light. In his view, "the PT created a whole new model of corruption."

"There has always been corruption in Brazil, but it used to be practiced by individuals, and now it involves institutions," including entire parties and Congress, and "public money" diverted from state-run companies, he argued.

"In the past, a construction company would overbill and bribe a public official with kickbacks, but now it is the government itself which is corrupting parliamentarians," Sampaio maintained.

He was referring to allegations that PT leaders and former ministers diverted funds from state bodies like the Bank of Brazil, to pay off parties and legislators for their support for government-sponsored initiatives in Congress. The allegations have been under investigation by congressional inquiry commissions since June.

This "generalised pillage" hurts agribusiness, because "important projects are shut down, and the state fails to carry out essential functions," such as enforcing animal health regulations. A lapse in monitoring last year allowed for an outbreak of foot-and-mouth disease in western Brazil in October, which severely impacted the country's beef exports.

Corruption "has greater repercussions now because the left is involved, but it's no different from the corruption of the past," remarked Clovis Melo, a newsstand vendor in Rio de Janeiro and disillusioned PT supporter.

"The Brazilian public has habits that encourage corruption," Melo told IPS.

Moreover, the people have a short memory when it comes to corruption scandals, which means that the most recent always seems like the worst ever, he added.

Last September, former Sao Paulo mayor Paulo Maluf was arrested on the basis of concrete evidence that he had diverted hundreds of millions of dollars to "tax havens" like Switzerland and the British Channel Island of Jersey.

The source of at least part of this personal fortune is believed to be bribes paid to Maluf in exchange for negotiating padded contracts with private construction companies to build public works.

Although long suspected of corruption, the former Sao Paulo mayor had avoided arrest until recently because of a lack of hard proof against him.

Maluf has been nominated several times as the presidential candidate for the right-wing Brazilian Progressive Party, originally founded by the 1964-1985 military dictatorship.

He was appointed by the dictatorship as mayor of city of Sao Paulo from 1969 to 1972 and as governor of the state of Sao Paulo from 1978 to 1982.

Following the return of democracy, he was elected mayor of Sao Paulo from 1993 to 1996.

One of his predecessors in Sao Paulo, the late Adhemar de Barros, was known in the 1950s and 1960s as the governor "who steals but gets things done" - and he never refuted the label.

In 1969, urban guerrillas opposed to the dictatorship seized a trunk filled with 2.4 million dollars from a house in Rio de Janeiro. The money was just one part of the funds embezzled by Barros, according to the armed rebel group, which believed there were eight similar trunks elsewhere

The most publicised corruption in recent Brazilian history ended in the resignation of former president Fernando Collor de Mello in 1992, following an in-depth investigation and impeachment trial that banned him from public office for eight years.

Paulo Cesar Farias, considered his financial right-hand man and accused of funnelling millions of dollars in ill-gotten funds, was murdered in 1996.

In 1993, corruption could well be described as "institutional", given that 11 lawmakers from various parties were removed from office while others stepped down in the face of evidence that they had embezzled state funds.

Today, there are many in Brazil who believe that public financing for election campaigns would be an effective strategy to combat corruption, but Abramo maintains that such a measure would be futile, since the "objective conditions" that foster corruption remain firmly in place.

In addition to the excessive number of public sector posts filled through political appointments and lax budgetary controls, there are other structural flaws that favour the diversion of state funds, including excessive autonomy for state and municipal governments, the huge number of municipalities with tiny populations, and the "general inefficiency of the Brazilian state," concluded the head of Transparency Brazil.