Game Over for Rousseff?

Arrests and new charges further inflame the political crisis around Brazil’s president.
Photo Illustration: Nejc Prah; Roussef: Getty Images

In a matter of days, the vast corruption probe known as Operation Carwash has moved closer than ever to Brazil’s president, Dilma Rousseff.On Feb. 22, Rousseff’s top campaign strategist, João Santana, was arrested for allegedly receiving $7.5 million, a sum tied to a bribery scheme at national oil company Petrobras, which is at the center of the scandal.

Then the magazine IstoE reported that the government’s former leader in the senate, Delcídio do Amaral, had alleged that Rousseff had pushed judges to release political allies imprisoned on charges of graft. The magazine said the senator, who faces charges of witness tampering, made the allegations as part of a possible plea bargain. Amaral declined to confirm any plea agreement or the details reported in the story.

On March 4, Federal Judge Sergio Moro had former President Luiz Inácio Lula da Silva detained for questioning about favors he and his family allegedly received. On March 9, a state prosecutor in São Paulo charged Lula with money laundering and hiding assets. He allegedly concealed ownership of an apartment renovated by a builder involved in the Petrobras scandal. Lula’s Instituto Lula says the former president denies owning the apartment and has done nothing illegal.

Rousseff, Petrobras’s former chairman, isn’t being investigated. She has denied any wrongdoing. Rousseff says her rivals want to seize power before the 2018 election. “There are certain political fights that create systemic problems not only for politics but for the economy,” she said on March 7 while inaugurating a housing project.

The latest events have revived efforts to remove Rousseff by impeachment or by the annulment of her 2014 reelection. The Democratic Movement Party, or PMDB, Rousseff’s largest ally in the ruling coalition, will discuss severing ties in a national convention on March 12. Opposition lawmakers plan to add details of Senator Amaral’s allegations to an impeachment request filed on Dec. 2 in the lower house of congress. “Amaral’s plea deal is fatal,” says Congressman Pauderney Avelino, leader of the opposition Democrats.

Brazil’s currency surged 6.3 percent in the first week of March in the hope that Rousseff would be impeached, easing the political gridlock so that reforms to fix the world’s seventh-largest economy could go through. Eurasia Group, a political consulting firm, estimates the odds of Rousseff finishing her term at less than 50 percent.

Lula’s brief detention brought about fistfights between supporters and opponents of the government in front of his home outside São Paulo. Rousseff’s opponents are organizing nationwide protests for March 13 to call for her ouster. Hundreds of thousands have signed up on Facebook event pages promoting the demonstrations. Rousseff’s Workers’ Party will stage two rallies later in March to support the government and party hero Lula.

Public protests could further undermine Rousseff’s support. “There is no impeachment without people on the streets,” opposition Congressman Mendonça Filho told reporters on March 7. In 1992 mass demonstrations pressed congress to open impeachment proceedings against then-President Fernando Collor de Mello. Demonstrating students painted their faces and wore black as a sign of grief over corruption. Collor resigned before his impeachment began.

For two years prosecutors and federal police working under Judge Moro have conducted Operation Carwash—named for gas stations allegedly used to launder money—from rented offices in Curitiba, 250 miles south of São Paulo. They’re looking into the possibility that massive bribes from a cartel of Brazil’s biggest builders were paid to politicians and executives in exchange for at least $50 billion in Petrobras contracts. Much of the illicit cash bankrolled three parties, including the Workers’ Party, Moro alleges. The judge has had 482 executives, politicians, bankers, and businessmen arrested.

Last month’s arrest of João Santana, the mastermind of Rousseff’s 2010 and 2014 campaigns, has taken Moro’s team one step closer to Planalto, the presidential palace in Brasília. Prosecutors said in a statement that they suspected people charged in the Petrobras case made multiple payments to Santana and his wife and business partner, Monica Moura, intended for the Workers’ Party. Investigators are trying to determine whether anyone in Rousseff’s campaign arranged the payments of the illicit funds. “We need to discover who gave the order to pay,” says Carlos Lima, a lead prosecutor in the case. “The money came from bribes, and the payment was for some service Santana provided.” Santana and Moura haven’t been charged, and they said in a court filing that the money was for work on campaigns outside Brazil.

The country’s top electoral court also is probing whether Petrobras money made its way into Rousseff’s campaign. If it finds that it did, the court could annul her mandate and call new elections.

Under Lula, 36 million Brazilians escaped extreme poverty. Today the country has double-digit inflation and unemployment, and millions are falling out of the middle class. Opponents of Lula and Rousseff have flooded social media with expressions of rage. “Enough impunity,” says one post on a Facebook page named Vem Pra Rua Brasil, or Come to the Streets of Brazil. “This is not a country of thieves.”

With Anna Edgerton, Raymond Colitt, and Arnaldo Galvao

The bottom line: The odds are increasing that President Rousseff will not finish her term as the investigation called Operation Carwash grinds on.

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