Background: Reasons differ, but Brazil has had enough of Dilma Rousseff

Voters are more angry about corruption than the president’s accounting ‘stepovers’

Former Brazilian president Luiz Inácio Lula da Silva  earlier this year. President Dilma Rousseff says her accounting practices in government were  no different from those of her predecessors. Photograph: Nelson Almeida/AFP/Getty

Former Brazilian president Luiz Inácio Lula da Silva earlier this year. President Dilma Rousseff says her accounting practices in government were no different from those of her predecessors. Photograph: Nelson Almeida/AFP/Getty

 

Ask most Brazilians the reasons they think the country’s president, Dilma Rousseff, should be removed from office, as opinion polls show they overwhelming think she should, and few will mention the actual charges she faces.

Instead they will rail against her Workers’ Party’s involvement in the sprawling corruption scandal at state oil giant Petrobras or bemoan her disastrous handling of the economy.

But in fact it is Rousseff’s opaque accounting methods that led to the senate vote to suspend her mandate on Thursday morning until it organises a formal impeachment trial to decide her ultimate fate.

Nicknamed fiscal pedaladas, after the the stepover dribble in football, these methods allegedly allowed Rousseff to boost federal government spending by taking large loans from state banks and a workers’ severance fund while hiding the cost of these away on the banks’ books, thereby masking the deteriorating state of Brazil’s public accounts.

According to state auditors, such practices broke the law, and the senate will now decide if they constitute a crime of responsibility meriting impeachment. It is a debate over accounting methods that for many Brazilians is obscure, especially considering most understand it as just a pretext for removing Rousseff for her other failings.

Nevertheless, some in Brazil argue that, however arcane, the issue is of huge importance for the health of the country’s economy and democracy and believe Rousseff’s impeachment would mark an important stand against the perils of profligate Latin American populism.

The president herself has dismissed the accusations, saying that what her administration did was “absolutely normal” and no different from the practices of her two predecessors, Luiz Inácio Lula da Silva and Fernando Henrique Cardoso.

Alarm

“Before, these deficits were something left over the weekend and covered on a Monday. But not in Dilma’s case. Hers were intentional. She didn’t have the money for her spending plans, so she used the banks’ money instead and left off paying them back for a long time,” says Paulo Dutra, head of the economics programme at FAAP, a university in São Paulo.

This, her critics argue, amounted to unauthorised spending which circumvented the law on fiscal responsibility. Passed in 2000 to avoid a repeat of the uncontrolled public spending of the 1970s and 1980s that ended up producing hyperinflation, this law is, for many economists, a key guarantor of Brazil’s recent macroeconomic stability.

“The pedaladas on their own merit impeachment,” says Mário Garcia, an economics professor at PUC university in Rio de Janeiro. “They should be called by their proper name: fiscal fraud. This is a crime and, in my opinion, a grave crime in a country that just 20 years ago suffered hyperinflation because of a lack of fiscal control. The damage she has caused is much worse than if she’d stolen money and put it in a Swiss bank account for herself.”

Warned

pedaladas

“The coming to light of the pedaladas was an inflexion point for how Brazil’s economy was perceived,” says Garcia.

The practices, which rapidly became more commonplace during Rousseff’s first mandate and continued into her second term, when she is also accused of illegally editing supplementary credit decrees, have also led to accusations that she won re-election in 2014 by deceiving voters as to the health of the economy.

“There was a fraud engineered to allow for unsustainable public spending in an election year, obviously with the objective of winning the election,” Júlio Marcelo de Oliveira, the public prosecutor who investigated the practices for the audit court, told the senate last week.

For some, the fact that Oliveira’s investigation has now helped bring a sitting president to the brink of being impeached is progress in a country that spent most of the past century struggling to keep its public accounts in order.

“I want her impeached for the pedaladas and not because of Petrobras,” says Dutra. “Because if she is impeached, it is a powerful message to our politicians. We will be able to impeach governors and mayors from all parties who use the same methods which undermine Brazil’s fiscal health.”

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