Affairs

Diplomacy

Rousseff’s first test— Rio de Janeiro

Preface

Brazil’s president, Dilma Rousseff, is facing her first political crisis since taking office at the start of the year – and her critics believe it has not only highlighted Rousseff’s own weaknesses but also the continuing influence of her popular predecessor, Luiz Inacio Lula da Silva.

Business, Government, Politics, Society

8 June 2011

Brazil’s president, Dilma Rousseff, is facing her first political crisis since taking office at the start of the year – and her critics believe it has not only highlighted Rousseff’s own weaknesses but also the continuing influence of her popular predecessor, Luiz Inacio Lula da Silva.

Rousseff’s chief of staff, Antonio Palocci, was this week forced to resign after growing allegations of improper enrichment. A doctor by trade, Palocci was no stranger to controversy. He served as finance minister under Lula but was toppled by a corruption and sex scandal five years ago. When Rousseff swept to power last year Palocci returned to the pinnacle of Brazilian politics. A powerful political enforcer and Wall Street favourite, he was seen as key to the success of Brazil’s first female president. He was pictured sitting next to her as she drove to a political rally celebrating the victory and was quickly installed as Rousseff’s unofficial prime minister.

Recent weeks, however, saw Palocci become a liability. In mid-May a leading São Paulo newspaper claimed that Palocci’s personal fortune had multiplied 20-fold over four years and that his consultancy firm had earned some $12.7m in 2010 alone. The suggestion was that Palocci had used his political influence to swing deals for clients. Last weekend more allegations appeared in a leading news magazine, suggesting that Palocci’s luxury home in São Paulo was falsely registered in the name of an impoverished 17-year-old whose mobile phone was recently disconnected after the bills went unpaid.

Brazil’s dethroned chief of staff had denied accusations of influence peddling, appearing on national TV to defend himself. But few were convinced, even within the coalition government. “The president knows what must be done,” Brazil’s vice-president Michel Temer said ominously last week, when asked if Palocci should keep his job.

The Palocci scandal has left opposition politicians rubbing their hands. Many claim his departure underlined Rousseff’s great weakness as a president – her lack of political experience with which to navigate such crises. Former president Lula repeatedly waded into the battle to defend Palocci – a sign for many that the ex-president still pulls the strings in Brasilia.

José Serra, a leading opposition figure and former presidential candidate, was particularly blunt. With Palocci’s exit Brazil had lost “the strong man of a weak government”.

“Fernando Henrique and Lula didn’t need a prime-minister,” he went on, referring to Brazil’s last two presidents. “Dilma does.”

On Tuesday Palocci was immediately replaced by Gleisi Hoffmann, a Workers’ Party senator, with a reputation as a political “pit-bull” and an Iron Lady of Brazil’s Upper House. With Rousseff’s most powerful wingman gone, she will need to live up to both nicknames.

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