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Thursday
May122016

Andy Spalding: Dilma’s Removal and the New Rule of Law in Brazil

Early this morning, Brazil’s Senate voted to move forward with President Dilma Rousseff’s impeachment trial. Under Brazilian law, Dilma must immediately step down from office for the duration of the trial, which could be as long as six months.

Dilma’s impeachment on corruption charges would not be unprecedented.  But the manner in which these damaging facts came to light is indeed new, and powerful evidence of the changes now taking place in Brazil.

Remember that Dilma is not being tried for impeachment because of any alleged participation in the Petrobras scandal (though suspicions of her involvement, or at least knowledge, are rampant). Rather, Dilma allegedly committed fraud in her annual federal accounting. And how was this discovered?

Brazil has a federal accounting court, called the TCU. That body is comprised mainly of ministers, who are politically appointed (and mostly former politicians) and non-political auditors. While the auditors are widely regarded as competent, the ministers were historically perceived as politically loyal and unwilling to disclose damaging facts.

But here, when the auditors discovered Dilma’s fraud, they were able to convince the ministers that action must be taken. The TCU ministers took the extraordinarily unusual step of rejecting the president’s accounting. This rejection was the first domino to fall in the series of events that culminated today in her removal from office.

Brazil is changing. Culturally, legally, and institutionally, the country is no longer tolerating corruption. The so-called jeitinho Brasileiro has lost its charm. Dilma’s removal should be seen not as a crisis, but as a triumph for the rule of law.

*     *     *

For further discussion of Brazil’s historic anti-corruption moment, see my ebook and webpage at law.richmond.edu/olympics/

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Andy Spalding is a Senior Editor of the FCPA Blog and Associate Professor at the University of Richmond School of Law. He'll be a moderator and panelist at the FCPA Blog NYC Conference 2016.

Reader Comments (3)

Rousseff was able to move 40 million people out of poverty in Brazil, provide medical coverage, education to the people, according to media reports. Part of the way she was able to accomplish this was through accounting irregularities, which were used to hide the massive deficit that she was creating in order to fund that program.

The likely result of her impeachment will be a right wing takeover of the country, which will undo all of the social benefits that she accomplished.

So what is worse - corruption and major social improvements, or less corruption (assuming a right wing government acts less corruptly - a big assumption) and moving those people back into poverty?
May 12, 2016 | Unregistered Commenteralan franklin
As some of you know, Brazil is in effect my second country . I have lived there on two separate occasions and travel there frequently. I have watched current events in Brazil with fascination. Although Dilma's impeachment is not framed in terms of Petrobras, many people believe Dilma, who, prior to assuming the Presidency, was the Chairman of Petrobras, was at least aware of the conduct that Lava Jato has uncovered. The acquisition of the Pasadena refinery, for instance, took place under her tenure as the Chair of Petrobras. So that is at least color in the present drama. Also influencing events are the dramatic fall-off in economic performance of Brazil, which is partly a function of lower commodity prices and partly a function of continuing challenges with development of the economic and business infrastructure in the country. So it is a complex situation. Nonetheless, it is remarkable what is happening in Brazil today. Dilma has called it an attempted coup, but all of what Andy describes is being done within a legal framework. Lucinda Low
May 12, 2016 | Unregistered CommenterLucinda A. Low
I am a long time resident and supporter of brasil. I find the reason for the impeachment a bit,sketchy however it is not a coup. It is illegal for the government to do this and the head is responsible for this infraction. To continue in this vain, she also is responsible for the situation of Petrobras, as she was the chairman of the board. The chief "is where the buck stops " but in this case this is where the "Real" stops.
May 12, 2016 | Unregistered CommenterRobert wasilewski
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