Brazil’s Rousseff Pushes Anti-Graft Bills as Her Approval Sinks

President Dilma Rousseff proposed tougher anti-corruption legislation on Wednesday as her approval plummeted to a record low following mass protests on Sunday.

The bills, if approved by Congress, would require a clean record for civil servants, allow ill-gotten gains to be confiscated and sold, and make under-the-table campaign donations a crime. The proposals came hours after Rousseff’s approval rating fell to a record of 13 percent from 23 percent in February according to a Datafolha poll published on Folha de Sao Paulo’s website.

“The poll shows just how difficult it will be for her to regain support in Congress and the confidence of the people,” Marcos Troyjo, who teaches and co-heads a forum on emerging markets at Columbia University in New York, said by phone from Sao Paulo. “She has lost all political capital.”

The government is raising taxes and cutting spending as a means to shrink the budget deficit and avert a downgrade to its sovereign credit rating after years of ballooning spending and subsidized lending. Congress has balked at proposals to cut pension and labor benefits. Allegations that her Workers’ Party benefited from kickbacks at state-run oil company Petroleo Brasileiro SA have increased opposition to the measures.

‘Purging Evils’

While Rousseff’s approval ratings will fall further in coming months as the full impact of austerity measures are felt, the president is unlikely to backtrack on policies of fiscal adjustment, Eurasia Group consulting firm said in a research note on Wednesday.

The government’s legislative proposals, some of which had already been presented and on Wednesday received fast-track priority, will help prevent corruption and end impunity, Rousseff said during a ceremony at the presidential palace in Brasilia. The government has also prepared new bylaws to 2013 legislation that holds companies more accountable for executives bribing public officials.

“We’re purging evils today that we’ve been carrying for centuries,” Rousseff said. “I know it’s a task for more than one generation, but we’re proud to have started.”

Above Target

The scandal surrounding Petrobras, which has led to the arrest of more than a dozen executives at its contractors, has also crimped investment in the energy and construction industries, exacerbating an economic slowdown.

Gross domestic product will contract 0.8 percent and inflation will accelerate to an above-target 7.9 percent this year, according to the latest central bank survey of analysts.

The Datafolha poll shows 62 percent of respondents rank Rousseff’s government as bad or terrible, compared with 44 percent in February and the worst since the administration of Fernando Collor, who resigned in 1992 amid corruption allegations. The poll of 2,842 people conducted March 16-17 has a margin of error of two percentage points.

The president is also considering changes to her cabinet to accommodate demands from her main coalition partner, the PMDB party, local media including newspaper Estado de Sao Paulo reported today.

More than 1 million people protested on Sunday in cities throughout Brazil. Of those surveyed by Datafolha in Sao Paulo that day, 27 percent cited impeachment as the main reason for their attendance, Folha de Sao Paulo newspaper reported Tuesday. Nearly half went to the streets to speak out against corruption, according to the poll that surveyed 432 people and has a margin of error of five percentage points.

Legal Grounds

After the protests, several congressional leaders said there are no legal grounds to impeach Rousseff, and Eurasia Group said many members of Congress prefer to benefit from a weak president than oust her.

“If Dilma did something illegal, she will have to answer and be punished after the end of her second term,” lower house President Eduardo Cunha said in an interview with TV Cultura that aired Monday night. “According to the Constitution, she has immunity until the end of this mandate.”

Rousseff said this week she was open to dialogue with anybody, adding she may have made some mistakes on economic policy. Her party denies allegations of corruption and says all donations were legal.

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