Bloomberg News

Brazil Elects Senate Leader Facing Surpreme Court Probe

February 01, 2013

Brazil’s Senate elected as its leader a government ally who is being investigated by the Supreme Court over fraud allegations, as President Dilma Rousseff seeks to maintain support to pass legislation.

Renan Calheiros, from the rural state of Alagoas, was elected head of the Senate in a secret ballot over protests from the opposition and some pro-government lawmakers. A leader of the PMDB party, the largest member of the governing coalition, Calheiros resigned as head of the Senate in 2007 over media reports that a construction company made regular alimony payments to his daughter in exchange for favors.

Rousseff, since coming to power two years ago, has taken a harder line against corruption than her predecessor and mentor, Luiz Inacio Lula da Silva, firing several members of her Cabinet accused of graft. The house-cleaning, while popular with Brazilians, has angered members of her Workers’ Party and coalition partners whose support she’ll need to help boost economic growth before an expected election run in 2014.

“She would certainly like a different name but she needs her coalition united and can’t continue fueling internal disputes,” Rafael Cortez, a political analyst with Tendencias Consultoria Integrada in Sao Paulo, said in a phone interview. “The risk is that an anti-corruption campaign surrounding Calheiros could contaminate her legislative agenda.”

Court Probe

Calheiros, 57, is still being investigated by the Supreme Court in three separate cases, according to documents on the court’s website. He is accused of embezzling public funds and committing perjury to cover-up the child-maintenance payments, Epoca Magazine said, citing a sealed indictment filed by prosecutors it obtained.

Public Prosecutor Roberto Gurgel yesterday said that Calheiros turned in false receipts to justify the use of his Senate expense account, according to Globo’s G1 news site.

Calheiro’s press office did not return phone calls seeking comment. In his acceptance speech, Calheiros pledged to make the Senate more transparent and open to society.

“No institution can think it is perfect,” he said in a speech on the chamber floor after taking command of the Senate from former Brazilian President Jose Sarney, who also belongs to the PMDB party, whose full name is the Democratic Movement of Brazil Party.

A landmark corruption case last year, known as the mensalao, struck a chord with Brazilians fed up with graft- ridden politics. The world’s second-biggest emerging economy ranked 69th among 176 countries, behind Cuba and Saudi Arabia, in Transparency International’s 2012 study of corruption perceptions around the world.

Corruption Cost

Graft costs Brazil 85 billion reais ($43 billion) a year, nearly double what the government spent on roads, ports and airports in 2011, according to the Sao Paulo Industry Federation.

An online petition calling Calheiros’s election a “slap in the face” of Brazilian society collected more than 305,000 signatures.

Still, Rousseff needs his support passing bills that seek to simplify the nation’s tax code, to redistribute the royalties from offshore oil revenue and to attract investment to infrastructure projects, Cortez said.

To contact the reporters on this story: Joshua Goodman in Rio de Janeiro at jgoodman19@bloomberg.net; Raymond Colitt in Brasilia Newsroom at rcolitt@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net


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