Corruption and impeachment: What's happening in Brazilian politics?

Operação Lava Jato has seen a number of leading figures in Brazil under investigation

Dilma Rousseff, Brazil, impeachment,

Anti-government demonstrators walk past a Brazilian flag during a demonstration in favor of the impeachment of Brazil's President Dilma Rousseff. Image: Joedson Alves / AP/Press Association Images

On Sunday, the lower house of the National Congress of Brazil voted to impeach the president of the country, Dilma Rousseff, in a historic move. 

The anti-government protesters on the streets of Brasilia and beyond greeted the news with cheers and tears of joy, showing that the country long known for the bright yellow shirts of their football team may well be about to grab global attention for something else: political corruption. 

With an increasingly long list of the accused, including the country's biggest political figures, what exactly is happening in Brazil as they look to root our corruption across the board? 

Here's a brief breakdown of what you need to know about the country's battle against bribes.

What is Operação Lava Jato (Operation Car Wash)?

The Federal Police of Brazil (MPF) are investigating what they believe to be the largest case of money-laundering and corruption in their history, involving a reported R$10 billion (over €2.5 billion). According to EBC, the amount could rise to over R$40 billion, with a quarter of the money being bribes. 

The Federal Police believe that the people and organisations under investigation were involved in international drug trafficking, corrupting public officials, fraud and diverting public funds, amongst a huge list of other crimes. 

The name of the operation came about as a result of the fact that one of the groups used a chain of car washes and petrol stations to move the money, and was dubbed as such by Erika Mialik Marena, the Representative of the National Association of Delegates of the Federal Police.

When did it start and what are they investigating?

The initial accusations were made by Hermes Magnus, a businessman who owns machinery company Dunel Indústria e Comércio, in 2008 when he was approached by the group being investigated to launder money. 

That trail lead to four criminal groups, and their leaders, being identified in the course of the investigations, including the key figure of Alberto Youssef - a doleiro or black market dealer.

According to Bloomberg, Youssef "told prosecutors how he spirited hundreds of millions of dollars through Brazil and beyond as part of a kickback scheme involving state-controlled oil company Petróleo Brasileiro SA (Petrobras), the nation’s biggest builders and top politicians".

Described as a "serial plea-bargainer", Youssef has avoided serving long jail sentences, while also giving information to the authorities on other doleiros, giving him the chance to gain further control of the black market along the way. 

Through Youssef, they discovered a link with Petrobras, the semi-public petroleum company in Brazil, whereby companies who won contracts to work on the Refinaria do Nordeste (Northeast Refinery, or RNEST) made payments to him.

Image: Demonstrators demanding the impeachment of Brazil's President Dilma Rousseff march during a protest next to large inflatable dolls of former President Luiz Inacio Lula da Silva in prison garb and President Rousseff wearing a presidential sash with "Mother of Big Oil" written on it in Portuguese. Andre Penner / AP/Press Association Images

From there, the scope of the investigations widened and the official probe was launched on March 17th 2014 and involved warrants for search and seizure, as well as temporary and preventive detention. 

The MPF discovered that a cartel of companies joined together to give the appearance of competition in the market, but instead set the prices and doled out the contracts among themselves. The rules of the club were, at times, even modeled on football tournaments, and went on for at least ten years.

In March of 2015, the Attorney General opened investigations into a further 55 people from the world of politics, who were responsible for appointing or keeping the directors of Petrobras in place. 

Both Yousseff and one of the ex-directors of Petrobras, Paulo Roberto Costa, named three of the country's major political parties in their discussions with the Federal Police: the ruling Worker's Party (Partido dos Trabalhadores or PT), their coalition partners the Brazilian Democratic Movement Party (Partido do Movimento Democrático Brasileiro or PMDB), and the Progressive Party (Partido Progressista or PP).

Who has been arrested or imprisoned?

A huge number of big names in Brazilian political scene have been implicated in the investigations, most notably incumbent president Dilma Rousseff (PT), after the Chamber of Deputies (the lower house of the Brazilian National Congress) voted to impeach her on Sunday.

Image: Brazil's President Dilma Rousseff speaks during a press conference with the international press regarding the congressional vote to open impeachment proceedings against her. Eraldo Peres / AP/Press Association Images

While the allegations against Rousseff are separate to Operação Lava Jato (they focus on allegations that she broke the budget law to hide a growing deficit), when they're coupled with the corruption scandal, it could mean her downfall. 

The vote will now be passed to the Senate, where a majority are expected to vote to carry the motion, and Rousseff will be forced to move aside from her political duties while she is investigated. She has dubbed the charges "a coup d’etat without weapons", and is expected to speak about them during her trip to the United Nations in New York this week.

If she is forced to step aside, her vice-president Michel Temer (PMDB) would be next in line, but he has also be cited by the Supreme Court in the inquest. 

Eduardo Cunha (PMDB), the speaker of the lower house, would then be the man in the hot seat, but he has been accused of taking bribes and, according to senator Delcídio do Amaral (PT) being a "messenger boy" for businessman André Esteves in Congress.

Image: House Speaker Eduardo Cunha leads the debate on whether or not to impeachment President Dilma Rousseff, as opposition lawmakers hold signs that read in Portuguese "Goodbye dear" in the Chamber of Deputies in Brasilia. Eraldo Peres / AP/Press Association Images

Cunha has somehow managed to keep himself in situ and hold onto his parliamentary protection from prosecution. After failing to negotiate with members of the PT, he gave the go-ahead for the impeachment process against Rousseff.

Esteves, the business man who was linked to him by Amarl, built and lead the BTG Pactual investment bank in the country. As The New York Times described it, his case is an interesting one because of "its apparent senselessness" as a result of the fact that many of the "collaborations with the government and Petrobras were mostly producing losses". Esteves was forced out of the bank and also served several months in prison, and is currently under house arrest.

Marcelo Odebrecht, another of Brazil's big billionaires, is also in jail after he was sentenced to 19 years for his part in the corruption scandal. According to the Wall Street Journal, prosecutors believe that the construction company even "set up a special department dedicated solely to keeping track of the bribes and their recipients".

As Latin America's biggest construction company (and one of its biggest employers with over 130,000) the Odebrecht company built a number of the World Cup stadiums as well as being involved in the projects for the Rio Olympics.

Odebrecht has also stated that he's willing to talk to authorities to get a more lenient sentence, and speaking to The Wall Street Journal, Pierre Moreau, a São Paulo-based attorney, said he "has more information to give than other people, so it’s hard to believe his plea bargain wouldn’t be approved."

One of the people that is believed to be among those that Odebrecht has information on is former president Luiz Inácio Lula da Silva, better known as simply Lula.

The former leader's house was raided by police as part of the investigations, and he was temporarily detained as the investigations continued in March.

What is the fall out?

Most obviously, Brazilian president Dilma Rouseff is under fire as her political opponents have used the pressure on her and her predecessor to instigate impeachment proceedings. 

Rousseff was chair of Petrobras when much of the corruption took place, and with the increased focus on her and Lula, a leaked phone conversation in March detailed how the two came to an arrangement to make Lula Chief of Staff in her cabinet.

Lula, the founder of the ruling Worker's Party, would then have been granted immunity as a result, but the move was blocked by the Supreme Court, "citing suspicions that it was a bid to shield Lula from prosecution in lower level courts." 

Mossack Fonseca, the firm implicated in the Panama Papers, was also accused by prosecutors of creating shell company OAS Empreendimentos Imobiliários to help those involved in investigations to hide money offshore, dragging the country head first into that scandal as well.

All the while, the economy is struggling badly, with unemployment rising and living standards falling. The legal institutions of the country are leading a purge against corruption which has been dubbed a coup by the left and their supporters, and effectively bringing the country's government to a standstill.

While the crisis is likely to cause a huge amount of short-term pain, given the economic problems, it may be the long-term restructuring that the system needed to root out corruption. 

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