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Collor, Corruption and Crisis: Time for Reflection

Published online by Cambridge University Press:  05 February 2009

Peter Flynn
Affiliation:
Director of the Institute of Latin American Studies, University of Glasgow.

Extract

The scandal involving President Fernando Collor de Mello, leading to his last-minute resignation on 29 December 1992, provoked understandable heart-searching in Brazil. This was clearly evident in a series of research interviews, which I held from August to October, when the political crisis was fast coming to a head, and already was reflected in published analyses of the P. C. Farias/Collor affair.

Type
Articles
Copyright
Copyright © Cambridge University Press 1993

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References

1 These early analyses include Nêumanne, José, A República na Lama, Sāo Paulo, 1992Google Scholar, a good account of how the scandal and pro-impeachment movement grew. He emphasises the perceived difficulty of impeachment and some of the interests ranged against it. These included, he argues, state governors wanting to maintain in office a weak president from whom they might extract resources (p. 177). He also stresses the mistrust of Itamar Franco (pp. 177–8). Further details of the financial scandals and corruption are given in Luciano Suassuna and Luís Costa Pinto, Os Fantasmas da Casa da Dinda, Sāo Paulo, 1992. This notes the importance of changes of rules regarding the signing of cheques, introduced by Collor and Economy Minister, Zélia Cardoso de Mello, who, herself, eventually, was embroiled in the scandal (p. 59). Also see Gustavo Krieger, Luiz Antonio Novaes, and Tales Faria, Todos os Sócios do Presidente, São Paulo, 1992, which gives more damning details, and, on a ligher note, Jó Soares, Luis Fernando Veríssimo, and Millor Fernandes, Humor nos Tempos do Collor, Porto Alegre, 1992, which shows that, even in the midst of political and financial scandal, Brazilians do not lose their sense of humour.

2 As a useful, contemporary reminder that political scandals are not limited to Brazil or Latin America, see Barker, Anthony, The Upturned Stone: Political Scandals in Twenty Democracies and their Investigation Processes, Essex Papers in Politics and Government, No. 92, University of Essex, Colchester, 12 1992Google Scholar.

3 For earlier discussion of the persistent weakness of political parties and party loyalties, see Flynn, Peter, ‘Brazil: The Politics of the Cruzado Plan’, in Third World Quarterly, Vol. 8, No. 4 (10 1986)CrossRefGoogle Scholar, especially pp. 1182–9, when discussing the possible candidacy of Antônio Ermírio de Moraes for the governorship of São Paulo. One of the people who, in an earlier interview, criticised the ‘open list’ system was the, then Senator, José Sarney, in Brasília, September 1984. Also, Fernando Henrique Cardoso, in Rome, January 1986, ‘How can you have democracy without political parties?’

4 Especially to be recommended is the excellent collection, recently edited by Trindade, Hélgio, Reforma Eleitoral e Representação Politica (Porto Alegre, 1992)Google Scholar. This includes such articles as; Regis de Castro Andrade, ‘Presidencialismo e Reforma Eleitoral no Brasil’: Walter Costa Porto, ‘O Sistema proportional nas Eleicões Brasileiras: um balanço’ and David Fleischer, ‘Reforma do Sistema Eleitoral Brasileiro Análise das Alternativas Frente as Experiências e Casuismos Recentes’.

5 On these, and related issues, see the short, clearly argued paper by Fleischer, David, A Reforma Politica no Brasil (mimeo), Brasília, 11 1992Google Scholar. See, too, the excellent paper by Olavo Brasil de Lima Júnior, ‘Perfil da Câmara dos Deputados: Partidos Eleitorais e Partidos Parlamentares’ in Social Democracia vs Neoliberalismo e as Novas Bases da Representação Politica, Grupo de Conjuntura, no. 30, IUPERJ, Rio de Janeiro, pp. 20–35, July 1990. Also ibid., no. 43, Aug. 1991. This whole series contains excellent material.

6 Ibid. p. 4.

7 Ibid. pp. 5–6. The bibliography on Brazil's party system is now extensive. See, in particular, Mainwaring, Scott, ‘Political Parties and Democratisation in Brazil and the Southern Cone – A Review Essay’, Kellogg Institute, Working Paper 107 (05 1988)Google Scholar and, by the same author, ‘Presidentialism, Multi-party Systems, and Democracy: the Difficult Equation’, Kellogg Working Paper, No. 144, (Sep. 1990).

8 For more detailed discussion of these issues, see Flynn, , ‘The Presidential Election of 1989 and Brazil's Current Political System’, in Brazil: Its Development, Experience and Options for the Future, Stockholm University (12 1989)Google Scholar.

9 On the political rôle of television, see de Lima, Vinício, ‘Media and Democracy: The Construction of a Brazilian President’, in Skidmore, T. (ed.), Television, Politics and the Transition to Democracy in Latin America (Johns Hopkins University Press, 1992)Google Scholarand Straubhaar, J. D., ‘Television and Video in the Transition from Military to Civilian Rule in Brazil’, in Latin American Research Review, vol. 24, no. 1 (1989)Google Scholar.

10 These interviews, too, were carried out in different cities and regions over Brazil over a period of two months. Their social and political range, again, was very wide.

11 For details, see Flynn, ‘Brazil: The Politics of the Cruzado Plan’, above, n. 3.

12 One effect was an acceleration of capital flight. In May 1989, the Central Bank forecast that capital repatriation by foreign companies could be, at least, US $ 840 million in the year, 10 per cent above the record set in 1986. The Bank also expected multinational companies to increase dividend and profit remittance to US $ 2 billion, compared with US $ 1.54 billion in 1988. Estimates of illegal capital outflow suggested that it would easily exceed the figure calculated for 1988, US $ 7.5 billion, which, in turn, was 134 per cent more than 1987. An overall estimate suggested that Brazilians had between US $ 35 billion to US $ 40 billion abroad, equivalent to about 10 per cent of GDP.

13 For details and further references on these events of 1988, see Peter Flynn, ‘Brazil and Inflation’, Third World Quarterly, vol. 11, no. 3, pp. 50–70, especially pp. 53–7 on the ‘Social Pact’. Also Lima, Olavo Brasil de, Júnior ‘O Voto Ideólogico na Eleição de 1988 e na Campanha Presidencial’, in Eleições Presidencies 89 (iii) IUPERJ, Rio de Janeiro, 11. 1989Google Scholar. See, too, his well-argued article; ‘As Recentes Eleições Brasileiras: Tendencias e Dilemas de Interpretação’, in Grupo de Conjuntura, no. 27, IUPERJ, Rio de Janeiro, pp. 7–30, April 1990. See, too, Eli Diniz; ‘Eleições e Crise Institucional: Uma Avaliação’, in 0 Governo Collor no Quadro Pós-Eleitoral. Grupo de Conjuntura, no. 33, pp. 1–6, IUPERJ, Rio de Janeiro, October, 1990.

14 The municipal elections of 1992 especially brought important gains for the PT. The defeat of the PDT candidate in Rio de Janeiro represented a particularly severe defeat for Leonel Brizola. It may produce a new party leader, possibly Ibsen Pinheiro or Jaime Lerner. Another potential candidate for PMDB leadership is César Maia, who won the election for Mayor of Rio de Janeiro with no official party support from the PMDB or Orestes Quércia, the party leader, whose record is now under scrutiny. César Maia, an economist, was an exceptionally successful Secretary of Finance for Rio de Janeiro, in Brizola's first term as Governor. He remained loyal to Brizola and the PDT when others found Brizola's high-handed behaviour too difficult to bear but, eventually, he, too, broke with Brizola, joining the PMDB. Maia's political, administrative and electoral record now marks him as one of the most able politicians of his generation.

15 Lindolfo Collor was one of the able gaúcho politicians who came to power with Vargas. He was trained in pharmacy, then in the social sciences, had written a study of Garibaldi in Brazil and, from 1923, edited A Federação, the leading political paper of Rio Grande do Sul. His father's name was João Boeckel, but, after his father's death, he took the name of his stepfather. He was a Protestant, who spoke German. He had served as a Federal Deputy on the Foreign Relations Committee of the Chamber of Deputies. He knew about European Corporatism, was deeply conscious of social issues and was the single most important influence in shaping Vargas' early social and labour policies. See Flynn, , Brazil: A Political Analysis (London, 1978), pp. 99131Google Scholar.

16 See Flynn, , ‘Collor de Mello, Fernando’, in Calvert, P. (ed.), Political and Economic Encyclopaedia of South America and the Caribbean (London, 1991), pp. 122–5Google Scholar. For both Lindolfo and Arnan see, in particular, that most excellent, and strangely neglected, research tool, which cannot be recommended too strongly: Beloch, Israel and de Abreu, Alzira Alves: Dicionário Historico-Biográfico Brasileiro 1930–1983, 4 vols (Rio de Janeiro, 1984)Google Scholar. This detailed work by scholars in CPDOC, the Centre for Research and Documentation for the Contemporary History of Brazil, in the Fundação Getúlio Vargas, in Rio de Janeiro, provides important biographical studies of Brazil's leading politicians. One must hope that a second edition will extend the period covered.

17 See Flynn, P. Calvert, Encyclopaedia, pp. 84–5.

18 One startling estimate, in José Nêumanne, A Repúblicablica, is of US $ 2 billion creamed off in illegitimate ‘commissions’, during Collor's time in office. Unattributable interviews in Brazil, in late 1992, went so far as to allege that Collor and Farias were aiming to amass between US $ 4 and 5 billion, each, during Collor's term in office.

19 Veja, Isto é, the Folha de São Paulo and other journals and newspapers carried detailed reports and analyses, especially as the scandal unfolded from July to October. The charges involving Collor's wife and the diversion of the funds of LBA (Legião Brasileira de Assistência, Brazilian Legion for Social Welfare), caused particular scandal. LBA had been started by Vargas' wife in the 1940s, and, later, developed as part of the state welfare programme, to help poor women and children. Interviews in 1990, several times brought a response from the poor, in, for example, the Baixada Fluminense, in the state of Rio de Janeiro, that people had voted for Collor, because, as a very rich man, he did not need to steal: now his wife was stealing from some of Brazil's poorest and most vulnerable women and children. For LBA, more generally, to fill in this background, see Allen, Elizabeth, Poverty and Social Welfare: a Challenge to Civilian Government, Institute of Latin American Studies Occasional Paper No. 44 (Glasgow, 1985)Google Scholar.

20 Right up to the vote in the Chamber of Deputies, on 29 Sept., there were doubts as to the result. However, the decision of the Federal Supreme Court, on 23 Sept., that the vote must be open, announced at the microphone, put strong new pressure on deputies, especially in the light of the forthcoming municipal elections of 3 Oct. Right up to the end, the president's press spokesman, Etevaldo Dias, was claiming, apparently sincerely, that Collor would win the vote.

21 See Nêumanne, A República. Also Folha de São Paulo, 22 Sep. 1992.

22 For details of such efforts, and on the economy as a whole until mid-1991, see Flynn, ‘Brazil’ in P. Calvert (ed.) op cit, especially pp. 84–100.

23 See Flynn, ‘Brazil’ in P. Calvert, Encyclopaedia, pp. 84–7, especially for Zélia de Mello's attempt to satisfy the unions without a return to wage indexation, through the introduction of a factor for salary or wage adjustment, the FRS (Fator de Kecomposição Salarial).

24 This, it will be remembered, was a point made in Nêumanne, A República.

25 He was born on a ship, on 28 June 1931, sailing from Salvador to Rio de Janeiro. His mineiro parents, of Italian descent, had moved to Bahia, where his father worked as an engineer on new roads. His mother combined ‘Ita’, the name of coastal passenger ships, with ‘mar’, ‘sea’. After his father's death, from typhoid, his mother returned to their native Juiz de Fora.

26 This section on Franco, Itamar draws on interviews in Brazil, on Brazilian newspapers and journals, but, especially, on the excellent analysis contained in Itamar Franco: The Man and the Moment, Brazil Watch, Orbis Publications Ltd, Washington, DC (10 1992)Google Scholar.

27 It included voting for a 50 per cent increase for working overtime; a 40-hour week; abortion; a six-hour shift; notice of dismissal in relation to years worked; the vote for sixteen-year-olds; nationalisation of subsurface minerals: a 12 per cent ceiling on real interest rates; prohibition of the sale of human blood; limits on foreign debt service; legislation of the jogo-do-bicho (a numbers game); the right of the state to expropriate productive properties. He voted against the death penalty; more than one union for each industrial sector; a five-year term for Sarney.

28 An early upset was the resignation, in Dec. 1992, of the Minister of Finance, Gustavo Krause. Krause's background was mostly working in tax in the state government of Pernambuco. His loss was a blow to Franco's strategy on fiscal reform.

29 This fiscal reform issue came up repeatedly in interviews in 1992, as it has done for years. It is very well treated by Lamb, Christina, ‘Fiscal Changes Tax New “Moral” Congress’, Financial Times, 20 01 1993Google Scholar, See, too, her report on the Congressional vote, ibid., 22 Jan.

30 For President Collor's proposed reforms on taxation, among other changes which he wanted in the Constitution, see Brazil Watch, 21 Oct-4 Nov. 1991, p. 5. The proposals were similar to those currently being made. The refusal of Congress to approve them was one of Collor's justifiable complaints.

31 C. Lamb, idem.

32 The rôle of state governors is now one of the key issues of Brazilian politics. Their power has been growing steadily since direct elections were re-introduced in 1982 and since the Constitution of 1988 increased the resources available to them. They tend, increasingly, to act as political blocs, including during the movement against Collor. They are understandably reluctant to accept fiscal reforms which may reduce the resources given to them by the 1988 Constitution, especially when most states are deeply in debt. This is a major problem for Itamar Franco, as it was for Collor.

33 One concession was over the confidentiality of bank accounts, which Itamar, like Collor, wanted to waive, in order to get at tax dodgers. This negotiation on Itamar's part contrasts sharply with increasing reports of his failure to work harmoniously with his own economic team. Early differences of opinion led to the resignation of Krause. Questions now hang over the continuation in office of Paulo Haddad, as the President openly disagrees with his Ministers. Such apparently arbitrary behaviour gives cause for concern. See Financial Times, 1 Feb. 1993. Further disagreements and resignations could seriously weaken, or even endanger, Itamar Franco's government.