The Petrobras affair —A charged campaign

| SÃO PAULO Economist

Another twist in Brazil’s election

IF I talk, there won’t be an election, Paulo Roberto Costa, a former executive at Petrobras, was supposed to have warned. Mr Costa, arrested in March in a money-laundering probe involving Brazil’s state-controlled oil giant, has started talking. Polling day, less than a month away, will not be cancelled. But if what he says is true, it could affect the outcome.

According to stories published on September 5th in Veja, a leading weekly, and O Estado de S. Paulo, a newspaper, Mr Costa, who ran Petrobras’s refining division from 2004 to 2012, has accused more than 40 politicians of involvement in a vast kickback scheme. The list reportedly includes a minister, three state governors, six senators and dozens of congressmen from President Dilma Rousseff’s Workers’ Party (PT) and several coalition allies. The beneficiaries are alleged to have pocketed 3% of the value of contracts that colluding suppliers signed with Mr Costa’s Petrobras division in return for securing support for the government in congressional votes.

All those whose names appeared in the press reports have fiercely denied any wrongdoing. Petrobras and the police have declined to comment. Ms Rousseff called the accusations “staggering” but insisted that if any misdeeds had taken place, they were long in the past.

Aécio Neves, leader of the opposition Party of Brazilian Social Democracy, was quick to dub the affair mensalão 2. In the original mensalão (the big monthly), a scheme that operated from 2003 until it came to light in 2005, the PT arranged regular backhanders for congressional allies in exchange for their votes. The scandal hurt the government of Luiz Inácio Lula da Silva, Ms Rousseff’s predecessor, and landed some of the PT’s leading lights behind bars.

Lula himself emerged from that imbroglio personally untarnished and managed to win re-election the next year. But it is widely thought to have cost him an outright victory in the first round. Lula had a year to get rid of the stench, whereas this time Ms Rousseff has only weeks till polling day. She is already facing a challenge from Marina Silva, a former environment minister who has surged in the polls since the death a month ago of Eduardo Campos, her running-mate and the candidate of the Brazilian Socialist Party (PSB), pushed her to the top of the ticket.

Ms Silva might have been in an even better position had Mr Costa not also fingered Mr Campos, a former PT ally and governor of Pernambuco when Petrobras decided to build a huge refinery in the state. But Ms Silva herself is regarded by most Brazilians as unimpeachably ethical. Besides Mr Campos, who cannot defend himself, no PSB-linked politician apparently appears on Mr Costa’s list.

No one doubts Ms Rousseff’s personal probity. And Mr Costa’s word, made in return for a reduced prison term, will need to be corroborated. But the affair risks rekindling memories of PT sleaze that the incumbent wished to put behind her. It does not help the president that, if true, the alleged shenanigans at Petrobras could have taken place right under her nose, first as Lula’s energy minister and then as the chairwoman of the company’s board.

The immediate effect on voters has been muted. Polls taken this week continue to show Ms Rousseff slightly ahead of Ms Silva in the first round of voting, and trailing her in a second. (Mr Neves is a long way behind both.) But Mr Costa, who has been testifying to police since the end of August, won’t be done talking for another two weeks. A campaign marked by surprises could be jolted again.


 From the print edition: The Americas