Petrobras scandal highlights the need for a deep reform in Brazil

As the Petrobras investigation has expanded, so too has the fear factor in Brasília. Certain members of Brazil's congress are accused of collaborating with company officials and contractors to extract bribes.

If you are a politician in Brasília these days, be careful of friends or associates who sidle up to you asking leading questions.

This is what Romero Jucá, Brazil's former planning minister, discovered after he met Sérgio Machado, the head of a Petrobras subsidiary, for a private chat in March this year.

The conversation predated the impeachment of President Dilma Rousseff earlier in May, which was led by Mr Jucá and his Brazilian Democratic Movement party, or PMDB.

In a transcript of the exchange released by the newspaper Folha de S.Paulo, the pair seemed to conclude the best way to gain some protection from a corruption probe into state-owned Petrobras was to impeach Ms Rousseff of the Workers' party, or PT, and install Michel Temer, her vice-president, also of the PMDB, in her place.

Mr Jucá later found out his interlocutor was wiretapping him, and other politicians, reportedly as part of a plea bargain Mr Machado had made with federal investigators for leniency in exchange for helping them gather evidence.

Indeed, as the Petrobras investigation has expanded, so too has the fear factor in Brasília. Certain members of Brazil's 600-member congress are accused of collaborating with company officials and contractors to extract bribes.

But while the investigation has changed the rules of the game for Brazilian politics, the players in congress remain largely the same. This raises the question of whether the country's biggest corruption probe will be enough to alter a political culture in which graft provides the grease that allows the machine to run. In the future politicians might simply become more adept at hiding their wrongdoing.

Certainly, the investigation is claiming more scalps than any before in a country in which serving politicians were until recently accustomed to virtual immunity from prosecution.

While acknowledging the existence of the conversation with Mr Machado, Mr Jucá denied any wrongdoing and claimed his comments were taken out of context. However, Mr Temer, who is president in an interim capacity, oversaw the stepping down of Mr Jucá from the cabinet lest his presence undermine the fragile legitimacy of an administration that owes its power to the impeachment of an elected president.

Most people in Brazil, whether they are from the PMDB or Ms Rousseff's PT, seem to agree that in addition to the graft investigations, political reforms are needed to try to remove some of the incentives for corruption. As in many jurisdictions, corruption in Brazil mainly revolves around the need for campaign finance.

One of the first reforms has already been carried out by the Supreme Court, which has banned corporate donations. But without accompanying changes, this will only leave parties starved of funding and perhaps even more vulnerable to corruption.

Another reform might be to introduce district representation. Under Brazil's proportional system, voters elect parties, which then appoint candidates to represent states, not specific regions. This means near zero individual accountability.

Another might be to end Brazil's system of coalitions, in which groups of parties form blocs during election time to gain rights to free television advertising time allotted according to their overall representation in congress.

This sustains the plethora of small parties in congress - Brazil's election tribunal lists 35 official parties - that might otherwise have to merge with larger ones if they did not receive this exposure. Many of these smaller parties have no policy platform other than rent-seeking. Some border on the absurd, such as the Brazilian Women's party, whose only member of congress is a man.

Others argue that political reforms will count for little without a fundamental change in Brazilian culture to persuade voters not to keep re-electing tainted politicians. Congress is littered with such people, including former president Fernando Collor, today a senator, who was impeached for alleged corruption in 1992, and Paulo Maluf, a lawmaker indicted in New York in relation to the theft of public funds.

But even without political reform, the Petrobras investigation is a sign of a growing insistence in Brazilian society for greater public probity on the part of its politicians. While the existing crop of crooked players will take time to weed out, the hope is the next generation will embrace the new rules of the game.

In the meantime, Brazilian politicians will have as much to fear from their friends as from their enemies.

Folha de S.Paulo |JOE LEAHY

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