Brazilian President Dilma Rousseff and her leftist political party, Partido dos Trabalhadores (PT), face growing criticism as more details emerge in the Petrobras scandal, a complex scheme in which large construction companies funneled cash to the state-run oil company and then allegedly to the Rousseff re-election campaign.
Corruption has long been an obstacle to economic growth and stability in Brazil, and the country’s citizens are rightly fed up. At the end of June, Reuters reported that the approval rating for Rousseff was just 10 percent, the lowest rating of any president since the early 1990s. Many in Brazil, even within Rousseff’s own party, are eager to see her go.
Several major political power brokers in Brazil are considering moves that could lead to Rousseff’s impeachment. An investigation by the Tribunal Superior Eleitoral (TSE), Brazil’s election commission, could find that Rousseff and her vice president, Michel Temer, financed their 2014 re-election campaign using Petrobras dollars. Such a finding would result in a new election, in which Aécio Neves of the center-right Partido da Social Democracia, who barely lost to Rousseff last year, might be favored.
Other avenues of removal, however, would affect only Rousseff, allowing Vice President Temer to govern until the 2018 elections. The Tribunal de Contas da Uniao (which is examining the federal government’s fiscal accounts) and the Procuradurial Geral da Republica (which is reviewing certain accusations of bribery) are investigating the scandal. If Rousseff must go, this is the preferred method for the PT, as it would retain its position in the ruling coalition. It would also help to preserve the PT’s option to run former president (and Rousseff mentor) Luiz Inácio “Lula” da Silva for a third term in 2018.
The judicial investigations and strong public support for impeachment have paralyzed effective governance in Brazil. The powerful speaker of the House has recently begun urging Brazil’s largest political party (PMDB) to break with the ruling coalition, which would immobilize Rousseff’s legislative agenda.
Freedom from corruption is one of the core components for the rule of law that is essential for economic growth. According to The Heritage Foundation/Wall Street Journal 2015 Index of Economic Freedom, Brazil ranks 72nd in freedom from corruption out of 178 nations scored. While Brazil’s corruption score has improved slightly from previous years, its overall Index score has declined, and the country still has a long way to go if it wants to reassure foreign investors that it is a reliable place to invest and do business. Privatizing state-run entities such as Petrobras and electing political leaders opposed to corrupt practices would help to head off additional scandals and to institutionalize economic freedom.
Henry Dickman is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please click here.