Political Risk Latin America Blog @PolRiskLatam

Brazil: Storm clouds ahead

Posted in News and Articles, Political Risk by politicalrisklatam on September 16, 2010

by H.J. for The Economist – Americas View Blog, September 16th, 2010.

At this stage in Brazil ‘s presidential race it would probably take a full-blown hurricane to blow Dilma Rousseff, the front-runner, off course. With the voluble support of the current president, Luiz Inácio Lula da Silva, she has pulled far ahead of her nearest rival, José Serra, and the occasional scandalous cloud on her campaign’s horizon has so far come to nothing. But with just over two weeks to go before the elections, Ms Rousseff may be entering squally weather.

Earlier this week Veja, a Brazilian news magazine, published an article alleging that Israel Guerra, whose mother, Erenice Guerra, is the presidential chief-of-staff, had helped private businesses win no-bid government contracts. In exchange, it said, he received “success fees” and monthly cash payments for “political commitments”. The magazine contended that Mr Guerra’s help amounted to influence-peddling by his mother, and that the payments were in reality bribes. Ms Guerra denies all wrongdoing and has called for an investigation, which she says will exonerate her.

Unlike the most prominent political scandal of the previous few weeks, in which junior members of Ms Rousseff’s Workers’ Party (PT) had illegally accessed private tax records of people close to Mr Serra, this one passes much closer to the front-runner. Until last year she herself was Lula’s chief of staff, and Ms Guerra was what she called her “right-hand woman”. Mr Serra has played the affair for all it is worth in his election advertising, showing footage of the two women together and emphasising their close and long-standing working relationship. Lula’s predecessor as president, Fernando Henrique Cardoso, in whose government Mr Serra served, has also joined the fray, after keeping a low profile in recent years. “It’s the mensalão scandal all over again,” he said, recalling a scheme of monthly bribes paid by the PT to its congressional allies in exchange for their votes. “Plotting in the presidential palace, next door to the president”. Although the mensalão did not stop Lula from being re-elected in 2006, it is widely credited with having denied him a first-round victory. (continue reading… )

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