President Dilma Rousseff on rack in Brazil

Economy struggling with fall in oil price taking its toll against backdrop of corporate corruption scandal

 

Brazil’s President Dilma Rousseff is facing a perfect storm. Political and economic crises feed off each other. Up to a million on the streets demand her resignation. Oil prices fall, the real plummets in a declining oil-dependent stagnant economy, GDP is down for second year, jobs evaporate. And a multi-billion – at least $3 billion stolen – corruption scandal, the largest in the history of the country, enmires Petrobras, the state-controlled giant oil producer . All just three months into her second term, and now her personal poll ratings are down at 13 per cent.

The going rate for bribes was about three per cent of the value of huge Petrobras contracts. In return for a plea deal one manager alone has not only admitted to receiving bribes but agreed to return nearly $100 million hidden in offshore accounts. Some of the money also went into the coffers of the governing Workers Party and helped pay for Rousseff’s re-elction campaign.

Among those implicated are a former president, the chairs of both houses of Congress, and the treasurer of the ruling Workers Party (WP), with executives from several of the nation’s biggest construction firms. To date 103 politicians and executives have been indicted on charges of racketeering, bribery and money laundering.

Brazil’s WP, and particularly its president, are taking most of the flak for corruption endemic across the whole political system. In the previous Congress, roughly a third of the 614 members faced criminal charges ranging from murder and slavery to money laundering and kidnapping.

So farRousseff herself has not been implicated personally in profiting from the bribery but much of the allegations relate to her watch as chairwoman of Petrobras, and critics say that her failure to blow the whistle suggests either silent complicity or incompetence. Repeated declarations of her commitment to fighting corruption ring hollow in the face of seeming inaction – now the first groups she must tackle are her own party’s backroom operators and notional political allies in congress, accused of waging a campaign of intimidation against public prosecutors.