Peril for Democracy : Brazil Reels Under Tales of Corruption

Times Staff Writer

A tempestuous corruption scandal is lashing Brazil’s three-year-old civilian government, and President Jose Sarney is feeling the sting.

For more than two months, a special Senate commission has been investigating allegations of graft and illicit patronage in Sarney’s administration. The scandal has become the hottest story in Latin America’s biggest country, sparking banner headlines in newspapers, cover stories in magazines and extensive coverage on television.

While corruption is not new to Brazil, the scandal comes at a critical time for Sarney’s transitional administration and the country’s democratic process. Because of its size and influence, Brazil is often regarded as a bellwether for fledgling democracies that have replaced military regimes in Latin America since the 1970s.

Sarney’s government is also under severe strain from an economic slump, inflation of more than 15% a month and a political battle over the president’s plans to stay in office at least until 1990. Many Brazilian politicians and their constituents are demanding direct presidential elections this year.


Although there are no signs that the scandal is seriously destabilizing the government, it has contributed to a widespread mood of disillusionment and pessimism.

In a darkly humorous one-liner that has been making the rounds, a question is asked: “Why hasn’t Brazil fallen into the abyss?”

Answer: “They stole the abyss.”

Although no one has accused Sarney directly of corruption, he is uncomfortably near the center of the controversy.

“There are corrupt persons close to the president of the republic,” testified Luiz Carlos Bresser Pereira, a former finance minister under Sarney, in a Senate commission hearing.

Fierce Counterattack

Sarney has counterattacked fiercely, alluding to the corruption investigation as “moral terrorism” aimed at “disintegrating democratic society.” He told a newspaper in Brasilia, the nation’s capital, that the scandal is part of “an orchestrated campaign with the intention of forcing the president of the republic to resign or commit suicide.”

His statement recalled the suicide of Brazilian President Getulio Vargas in 1954 amid a corruption scandal first publicized by editor Carlos Lacerda in the pages of the Rio newspaper Tribuna da Imprensa. Pressure for Vargas’ resignation increased when the president’s personal bodyguard was implicated in an attempt on Lacerda’s life.


Before he killed himself, Vargas was reported to have said: “I have the impression that I am on a sea of mud.” The “sea of mud” metaphor is now being used by the Brazilian press to describe corruption in Sarney’s administration.

“A Voyage to the Sea of Mud,” was the title on a recent cover story in the newsmagazine Veja about federal police charges against Anibal Teixeira, a former minister of planning who resigned under pressure in January. Teixeira is charged with letting middlemen negotiate the allocation of government funds, favoring relatives with government business, using public funds to campaign for office and destroying official documents that could be useful in investigations.

Corruption Commission

The Senate commission on corruption was formed to investigate charges by the mayor of Valenca, 100 miles west of Rio, that a middleman asked for a kickback in return for obtaining street-paving funds from Teixeira’s ministry. To get the funds, the mayor said, he also had to award a contract to an engineering firm partly owned by a cousin of Teixeira.


Other witnesses told the commission of similar deals involving Teixeira’s ministry in other towns.

The commission’s investigation and the attendant publicity are products of new freedoms that came with the end of military rule in 1985. Although corruption was widely rumored during the preceding 21 years of military government, authoritarian controls made disclosure of any full-scale scandal unlikely.

Sarney, formerly chairman of the conservative party that supported the military government, became a compromise candidate for vice president when the armed forces permitted an electoral college to choose a civilian president in 1985. Then, President-elect Tancredo Neves died before he could take office, and Sarney assumed the presidency.

Although Sarney has enjoyed the support of the armed forces, they are not taking the corruption issue lightly.


Omission, Negligence

“In Brazil, the frightening escalation of corruption is a consequence of omission, negligence, lack of authority and of control,” said Air Force Minister Octavio Moreira Lima the other day.

The influential Roman Catholic Church also has expressed concern.

“Corruption in Brazil is surpassing the golden days of the military regime, leaving the society bowed down and without dignity,” said Luciano de Almeida, chairman of the National Conference of Bishops.


Much of what the commission has learned has involved apparent conflicts of interest without proof of crime. For example, it discovered that Pinheiro, Sarney’s small hometown in the northeastern state of Maranhao, received many millions of dollars in federal grants for public projects, with fat profit margins for local contractors.

Retroactive Increases

Currently, the commission is concentrating its investigation on a decree issued by the presidency in April, 1987, that granted retroactive increases in government payments owed to private contractors. According to an estimate by the Planning Ministry, the decree cost the government about $600 million.

The increased payments, to compensate for inflation, were retroactive to Nov. 24. At that time, all prices and other rates of payment officially were frozen.


The legal office of the Finance Ministry issued a report saying the decree was unconstitutional. Dilson Funaro, then the finance minister, said he learned of the decree only when he read it in the official gazette, although it bore his name as one of several signers, including Sarney.

Funaro told the Senate commission that he later signed the decree at Sarney’s request, but only after Sarney promised to change its retroactive nature. The change was never made.

Friends of President

Among the biggest beneficiaries of the decree were two giant construction companies owned by friends of Sarney, but no illicit exchange has been proven.


“It is not a crime to be a friend of the president,” said one of the construction magnates, Murilo Mendes.

Sarney’s supporters contend that most of the Senate commission’s 11 members are political enemies of the president and are applying pressure for presidential elections this year.

“They are like wild bulls loose in the arena, crazy for a red cape with the word ‘Sarney’ on it,” said Congressman Jose Sarney Filho, the president’s son.

Baiting the Bull


The presidential palace may be preparing to bait the bull. Officials acknowledge that they are compiling a dossier containing accusations of corruption against members of the commission.

“Many of its members might not be sitting where they are but instead, perhaps, in the defendant’s chair,” said Communications Minister Antonio Carlos Magalhaes.

Magalhaes might be vulnerable himself. His ministry has been accused of awarding dozens of broadcast licenses as personal and political payoffs. The Senate commission has not taken up the matter, and the ministry has denied anything improper in the awarding of licenses.