Dilma and Lula cleared of wrongdoing in Petrobras Scandal
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Dilma and Lula cleared of wrongdoing in Petrobras Scandal

Since emerging victorious in a hotly contested presidential election last October, Brazil’s President Dilma Rouseff has seen her popularity plunge over the last year to a record low as the Latin American powerhouse’s economy stagnates.

To make matters worse, Rouseff’s credibility has taken a damaging blow following a corruption scandal of epic proportions involving high-profile officials from Brazil’s state-owned energy company Petróleo Brasileiro S.A, or Petrobras, several of Brazil’s largest construction companies and senior political figures in a kickback-bribery scheme.

A Brazilian cartel

The parliamentary commission tasked with investigating the corruption released a 754-page report on Monday which concluded Petrobras had been a “victim of a cartel” created by construction companies and culture of venality among political figures. Brazil’s Federal Police and senior prosecutors also investigating the case uncovered several construction companies colluding to alter contracts and inflate prices.

Profits gained from the racketeering scheme were shared with high-ranking Petrobras officials and politicians, including several from the ruling Partido Trabalhadores (Workers Party). The scheme, which ran between 2004 and 2014, reportedly saw Petrobras lose $2 billion, according to teleSur; a figure which Reuters estimates could reach $5 billion.

Rouseff, who was head of Petrobras at the time, and her hugely popular predecessor Luiz Inacio Lula da Silva, the then-President, both previously under investigation were exonerated of any wrongdoing by a parliamentary commission on Monday, teleSur reports.  A spokesperson for the commission tasked with investigating the rampant corruption, Luiz Sergio Nobrega de Oliveira said “there was no proof” implicating Dilma or Lula. Olviera went on to comment the accusations against the two were “superficial” and had been “exaggerated”, according to EFE.

Following the implementation of the anti-bribery Clean Companies Act in 2014 there has been a concerted push to root out corruption in Brazil, making the investigation into Petrobras possible. To date 44 people involved with Petrobras scandal have been found guilty and a further 123 have been charged. The most high-profile figure charged was former PT treasurer João Vaccari who received a 15 year sentence for accepting a reported $1 million in bribes according to the Associated Press.

Little silver lining for Rousseff

Despite vindication from the parliamentary commission, Rouseff still faces an uphill battle to turn around her Presidency. Brazil is currently going through the deepest recession in almost a century as global demand in raw materials shrinks, which has deeply impacted the country’s export-based economy.

The current fiscal crisis and cases like that of Petrobras has spurred several protests against Dilma across Brazil in recent months, with certain opposition groups pushing for her impeachment. A recent CNN/Ibope public opinion survey recorded her approval rating at just 14 percent, among the worst in the region.

Though grounds for impeachment based on involvement in the Petrobras corruption scandal have now realistically been diminished following the parliamentary report, a new probe has been opened investigating fiscal irregularities after a government watchdog rejected the Brazilian president’s 2014 public accounts.

Despite not being personally implicated in the Petrobras affair, the ill-timed scandal has tarnished her reputation for dealing with corruption and has stoked opposition sentiment which has been exacerbated by a contracting economy.

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