War on Corruption Looks Set to Burnish Rousseff's Legacy

08/06/2015 - 16h41

Brazil's President Dilma Rousseff chose a recent trip to the US to raise a topic close to her heart - her distaste for "informants".

Journalists were pressing her after construction boss Ricardo Pessoa told prosecutors probing corruption at state-owned oil group Petrobras that he had made illicit payments towards her 2014 campaign for re-election.

"I do not respect informants," Ms Rousseff said. She recalled her days during Brazil's rightwing military dictatorship in the 1960s when as a young Marxist guerrilla she was captured and tortured for information.

The irony for Ms Rousseff is that a reform during her rule that has enabled Brazilian prosecutors to use informants to tackle corruption may prove to be the greatest legacy of her struggling presidency.

If it prompts a permanent improvement in the rule of law, it could one day even be seen as on par with the achievements of her two immediate predecessors, former presidents Luiz Inácio Lula da Silva, who reduced poverty, and Fernando Henrique Cardoso, who conquered runaway inflation.

Until the Petrobras case erupted into the open last year, Ms Rousseff's scorecard was in bad shape.

After inheriting an economy that had survived the global crisis in reasonable condition, her administration ran public finances into the ground.

A recession is expected this year. Her approval ratings are among the worst of any president.

But Ms Rousseff's one difference has been how she has dealt with Brazil's endemic corruption.

In 2011, the first year of her first term, she allowed a succession of ministers to fall on their swords after they became caught up in corruption scandals. Mostly, she refused to defend them.

In 2013, she did not try to interfere when senior members of her left-leaning Workers' party, or PT, were convicted of organising a vote-buying scheme in Congress.

After that, Ms Rousseff brought in anti-corruption legislation that enabled investigators to negotiate leniency agreements, in which a suspect can agree to turn informant in exchange for a lighter sentence.

The measure proved to be a weapon of mass destruction against corruption conspiracies.

Since early last year, when prosecutors launched the probe into the Petrobras scandal, in which former company directors allegedly colluded with mostly ruling coalition politicians and contractors to extract bribes, 125 have been charged and more than 30 convicted.

There are expected to be scores more to come. Senior politicians, including both heads of the upper and lower houses of Congress, have been implicated, although all deny the allegations.

Those already under arrest include PT treasurer, João Vaccari, and Mr Lula da Silva's former right hand man, José Dirceu.

Prosecutors are also pursuing Ms Rousseff's mentor, Mr Lula da Silva, in a separate investigation into alleged illegal influence peddling. All reject the allegations. The PT denies accepting illicit donations.

Throughout the probe, Ms Rousseff has made shows of outrage on behalf of accused comrades. But mostly she has been keen to claim credit for the war on corruption.

This is partly disingenuous. While she has some power over the federal police, she has little control over the courts and public prosecutors, which are fiercely independent.

She also headed Petrobras and the ministry of energy when much of the wrongdoing took place. This makes it unlikely that she encouraged the investigations.

Yet unlike many of her opponents in Congress, she is not accused of direct involvement in the schemes. Supporting the investigation, therefore, could prove to be a canny survival strategy.

She might end up being the last senior politician standing once the dust has settled. Her low popularity means the scandal could also blow up in her face.

Whatever happens, she could yet secure her legacy as the president during whose rule Brazil began cleaning up its corruption problem. She might, however, first need to rethink her rhetoric on informants.

Copyright The Financial Times Limited 2015