[Brazil] Petrobras: when corruption rhymes with privatization

Written by PSTU – Brasil
Friday, 12 September 2014 18:32
Testimony of former director of the company puts politicians in trouble.
After the revelation of the scandalous purchase of the Pasadena refinery in Texas, where Petrobras paid US$ 1.2 billion for the refinery, which had been purchased shortly before by US$ 42 million, another scandal promises to shake further the electoral scene. The testimony of the former Petrobras’ Executive Board member, Paulo Roberto Costa, arrested during a Federal Police operation[1], puts the bigwigs of politics on the spot, involving a wide range of parties, ministers and governors.
Paulo Roberto Costa was arrested in March, then released and returned to jail in June. He is charged with committing a variety of offences, as holding US$ 23 million in an illegal bank account in Switzerland. Given the situation, Costa decided to save his own skin adhering to the whistleblower protection program. He had already threatened to squeal on his peers, saying that if he spoke what he knew, “there would be no elections.” Apparently he decided to tell at least part of the story.
According to information from Veja magazine [2], the former director of Petrobras would have reported to the Federal Police a mega-scheme of overbilling the Petrobras contracts with a number of companies and the diversion of resources to politicians and parties. A bribe of 3% on the value of the contracts would be directed to parties of the governing coalition. It’s a quite similar scheme to what has surfaced in reports of the Mensalão scandal in 2005[3], but involving much more money.
The former director of Petrobras would be responsible for signing the overpriced contracts whose resulting bribe would be delivered to the money exchanger Alberto Youssef. It is believed that an amount of US$ 4.4 billion has been laundered by Youssef, who was also arrested in March. Then, part of that diverted money would be passed on to parties of the governing coalition. The bridge between Costa and the parties would be none other than the PT treasurer, João Vaccari Neto.
Also according to the magazine, Costa would have accused three governors: Roseana Sarney (PMDB) of Maranhão, the former governor of Rio, Sérgio Cabral (PMDB), and the former governor of Pernambuco, Eduardo Campos (PSB), dead last month, of being members of the scheme. In the list would still be the presidents of the Senate, Renan Calheiros (PMDB) and of the Representatives House, Henrique Alves (PMDB), the Minister of Mines and Energy, Edson Lobão (all PMDB), and 24 more congressmen.
The values of the overpriced contracts are impressive​. Only the Abreu e Lima refinery in Pernambuco has an estimated spending of US$ 20 billion, equivalent to almost 20 times its original price. The Petrochemical Complex of Rio de Janeiro, COMPERJ, is also in the list.
The panic that takes over the government is understandable. Roberto Costa was a Petrobras Downstream Director from 2004 to 2012. Initially indicated by the Popular Party, from the Lula’s governing coalition, he was gaining sympathy and political influence among the various parties and entrepreneurs. Besides politicians, this new scandal inevitably touches president Dilma Rousseff, as she was Minister of Mines and Energy and chairwoman of the Board of Directors of Petrobras at that time.
Public resources, private business
For now, the scandal boils down to the information released by the Veja magazine, which has its own interests in this story. In addition to attacking the candidacies for president of Dilma Rousseff (PT) and Marina Silva (PSB), in order to benefit Aecio Neves (PSDB)[4], the magazine does not hide its political bias concerning privatization. That means, trying to associate corruption with the state owned character of the company. The repercussion caused by this scandal and the impact on the government, however, seem to give consistency to the informations leaked from the testimony.
This new corruption case shows how the governments (from the right, PSDB from 1995-2002; and from the “left”, PT from 2003-2014) use Petrobras as a true “business centre” to satisfy the hunger of the allied bourgeois parties. The distribution of key jobs among the parties and the diversion of financial resources, however, unlike what the PSDB and the media try to show, have nothing to do with the state owned character of the company. On the contrary, under the PSDB and the PT governments, progress was made towards Petrobras privatization. Currently, 53% of the company shares are in the hands of private shareholders. Corruption occurs precisely due to the narrowing of spurious relations between the state owned company and the contractors.
It also shows how the funding of political parties by large companies and contractors is one of the main causes of corruption. It is an investment made by the big business which collect their profits in the form of laws that benefit them or “winning” public tenders. This can be seen in Petrobras with the increasing participation of the private sector in the company[5], in addition to numerous overpriced contracts.
The allegations of Paulo Roberto Costa hit not only Dilma Rousseff but also Marina Silva, who arises as a representative of the “new politics”. However, she doesn’t think twice before trying to cover up the irregularities in which Eduardo Campos may be involved, as any “old politician” would. The PSDB, on the other hand, bears no moral right to talk about corruption, as shown by the scandals of the airport in Minas Gerais or the “trensalão” in São Paulo, both properly muffled with the help of the media.[6]
The corruption at Petrobras reinforces the need to ban the funding of political parties by companies and raises the need to campaign for a 100% state-owned Petrobras under the workers’ control.
[1]This special operation is called “Lava Jato”, in English, “car washing”.
[2]Veja – a conservative magazine which defends the neoliberal policy and privatization of state owned enterprises
[3]The Mensalão scandal was a vote-buying case of corruption that sent to jail many influential politicians from the party in power, PT (Workers Party). Mensalão is a neologism and variant of the word for “big monthly payment”.
[4]Dilma Rousseff (PT) is the current president, who runs for a second term. Marina Silva was the candidate for the vice presidency in Eduardo Campos’ list before his death. Now she is the PSB candidate, replacing Campos. Aecio Neves is the candidate of the rightist party PSDB.
[5]Petrobras claims to have 80 thousand employees while there are more than 200 thousand outsourced workers from contractors.
[6]Cases of corruption involving the PSDB governments of Minas Gerais and São Paulo. Trensalão is a combination of the words “trem” (train) and “mensalão” (see footnote 3) – trem-salão – due to the similarity between the Mensalão scheme and the corruption in the works on the subway company of São Paulo.

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