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Brazzil - Politics - August 2004

Brazil: Lula's Friends Have License to Kill

If Brazil's Central Bank president becomes an insurmountable
liability, be it for the series of accusations or not, what does the
future hold for him?
Should that turn out to be the case he would
be named Brazilian ambassador to a country of great magnitude;
and he would return to politics in time for the 2006 elections.

Carlos Chagas

Hernique Meirelles

Picture President Lula's resolve to keep Henrique Meirelles as president of the Central Bank at any cost remains firm. However, frequently, facts don't go hand in hand with intentions, and the question concerning the banker's future in case he is removed from his post comes to mind; assuming, for example, that new accusations of illegal transfers of funds and tax evasion emerge, even if such operations were indeed investigated prior to his nomination as head of the Central Bank.

Meirelles, although born in Goiás, has spent 20 years away from his home state. He built a career in the financial world, first in São Paulo, and later in the US, climbing to the position of president at Bank of Boston.

Upon noticing he was about to receive the pink slip, a common practice experienced by top executives from that institution, he decided to return to Brazil through the political doorway.

He registered as a member of the PSDB (Partido da Social Democracia Brasileira—Brazilian Social Democracy Party) and took a shot at a nomination for the Senate, in the 2002 elections. Unsuccessful, he settled for the House of Representatives.

For him, that was a cake walk, since more and more, with the usual exceptions, getting a House seat has become a financial operation. The candidate needs to link up with other candidates running for state office and finance them through a one-two team effort capable of rendering them votes.

Meirelles went way beyond, and funds were not an issue for him. The only thing he did lack was political and campaigning experience, that is, votes. He banked 22 candidates to the State House of Representative, not all from his own party.

They all got elected. It would be irresponsible to say how much each candidate received, but it wouldn't be too far off to estimate between US$ 100 to 165 thousand each.

On the eve of his taking office, the representative with the largest number of votes to Congress from the state of Goiás, with more than 180,000 votes, found himself taken by a surprise invitation from President Lula to be the head of the Central Bank.

His name would ease tensions throughout the markets. Nonetheless, by law, he would be forced to resign the House seat to which he had not yet been sworn in. He resigned, but obviously was promised a few compensations.

Atop the promise list was an anti-dismissal guarantee—to serve all of Lula's term in office. And more: the government would pull out from Congress, in 2004, legislation of an independent Central Bank, paving the road for Meirelles to secure—if elected—a four or five-year term, from where no one would be able to remove him.

The vote on the proposal has been pushed back to 2005, but the pledge still stands, at least on Lula's determination. Nevertheless, if Meirelles becomes an insurmountable liability, be it for the series of accusations or not, what does the future hold for him?

No need to fret over it. Should that turn out to be the case, to make up for his interrupted congressional career, he would be named Brazilian ambassador to a country of great magnitude; and he would return to politics in time for the 2006 elections.

Privacy Breaking

The government is announcing a new act capable of shutting down the umbrella of bank and tax secrecy safeguards. The Brazilian Intelligence Agency, the Federal Police, and agencies involved in national security will be able to overstep the privacy of any individual or organization under suspicion.

It's a necessary measure, because he who has nothing to hide, has nothing to fear. It is hard to comprehend a constitutional device that today benefits a minute portion of 175 million Brazilians, whose great majority has nothing to hide. Those who do, we want to know why.

After the calm comes the storm. Another bill expected in the coming days will establish that only ministers and high level officials may pass on to the press information regarding federal inquiries and investigations underway.

Employees who fail to comply with this directive will be punished. Now, the only thing missing is the rebirth of the Gag Order Bill, which bars State Agencies, Federal Police and the Judiciary from disclosing information of unresolved procedures.

One must try to understand President Lula, when he thrashes the wave of accusations and loses his temper with any new revelation of irregularity performed by government employees. Nothing justifies the protection of despicable people, responsible for wrongdoings. But no government can stand being criticized.

Some 40 years ago, General Arthur da Costa e Silva took office as President. In the beginning, everyone paid him tribute. During a banquet at the Brazilian Press Association, he sat next Countess Pereira Carneiro, owner of the newspaper Jornal do Brasil.

She said to the President that he could count on her newspaper for constructive opposition to the government. The old general, very casually, countered: "Look, countess, what I really appreciate is praise, OK?" Things have not changed since…

Carlos Chagas writes for the Rio's daily Tribuna da Imprensa and is a representative of the Brazilian Press Association, in Brasília. He welcomes your comments at carloschagas@hotmail.com.
Translated from the Portuguese by Eduardo Assumpção de Queiroz. He is a freelance translator, with a degree in Business and almost 20 years of experience working in the fields of economics, communications, social and political sciences, and sports. He lives in Boca Raton, FL. His email: eaqus@adelphia.net

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