Assessing the Damage: More On the Way?

Assessing the Damage: More On the Way?

Although a definitive piece of evidence against President Fernando Henrique Cardoso has yet to surface, the opposition has decided to force the issue. They’ll be seeking a congressional inquiry after the July recess.

July was decidedly a bad month for the Brazilian government, and personally for President Fernando Henrique Cardoso. Everything the government wanted to avoid took place, in rapid succession, on the heels of statements made by former top presidential aide Eduardo Jorge. A newspaper interview in which Jorge, once Cardoso’s right-hand man, admits to questionable relations with Judge Nicolau dos Santos Neto—currently on the run from police, and recently expelled former Senator Luiz Estevão, set off something of a race in the Brazilian media. Everyone is clearly out to prove what the statements and their aftermath would seem to imply: that the President may have been involved in the corruption scandal that led to Estevão’s expulsion, and drove Judge Nicolau into hiding.

New details and accusations surfaced continually, at times by the hour, widening the scope of this dangerous sidebar to the ongoing scandal: the diversion of over R$169 million (about US$93 million) meant for the construction of a new Labor Court headquarters in São Paulo. The runaway Judge is accused of being the mentor of the money-siphoning scheme, while Estevão, a wealthy developer, is accused of being the behind-the-scenes owner of the construction company handling the project. Several high-profile names were pulled into the fray, from cabinet members to prominent entrepreneurs and sitting members of Congress. The issue has ballooned to become headline material throughout the media—precisely what the government tried to prevent, when all high-ranking officials were ordered not to “fan the flames” by commenting on the matter. It didn’t work.

A major reason for the issue to grow as it did was a somewhat flawed approach by the media early on. Most news outlets failed at developing an accurate timeline, and as a result, too much was made of certain developments that turned out to be of less importance than they seemed to have at first. The top example of this is a document uncovered by the São Paulo daily, Folha de São Paulo, which many in the media tried to portray as the proverbial “smoking gun”. Not quite. The document, signed by President Cardoso, did authorize additional funds for the ill-fated courthouse, to the tune of R$25 million (about US$14 million). But all everyone saw was Cardoso’s signature on a supposedly damning document. Later, it was clarified that he signed the document in 1996, two years before there was any indication of corruption surrounding the project.

Similar allegations were made about Planning Minister Martus Tavares, and a number of members of Congress, because they were also involved in pre-authorizing supplemental funds for the same project—again, before there was any sign of trouble. Pressure on Tavares became so intense that by Thursday, July 13, he was considered as good as out the door. That evening, at a meeting with President Cardoso and other high-ranking government members, it was decided that if Tavares left, it would be tantamount to an admission of guilt. He stayed on, and came out swinging the next day, emphasizing the date discrepancies in several interviews.

That Thursday, in fact, was the month’s pinnacle of tension. Early in the day, the newsmagazine Isto É announced it was anticipating the week’s edition, normally out on Saturday. It would be out that day, featuring exclusive recordings of conversations between Judge Nicolau and unidentified “others”.

The government braced for what was coming, but again, the material raised more questions than it answered, and did not provide a “direct hit” on the President. First problem with the tapes: the person speaking to Judge Nicolau on the recordings is not identified, and seems to conduct the dialogue to try and get the Judge to say certain things, and involve specific people. Second, the conversation was quite up to date, with references to names and topics that only made the news in the past few days—an indication the recordings may be recent. Finally, the magazine claims the tapes were made by the Federal Police and ABIN, the federal intelligence agency. Both deny any involvement.

The end result from the government’s perspective was more of a sigh of relief. Some government members actually speculated that Estevão might be behind the surfacing of the tapes, since their content was suspiciously helpful to the Senator’s cause because it points an accusing finger at other possible involvements in the scandal. In its Saturday prime-time network newscast, TV Globo reinforced that theory by suggesting that a well-known media executive in Brasília may be the “other” person speaking to Judge Nicolau on the tapes. The person is the General Manager of a Brasília radio station owned by former Senator Estevão.

If indeed someone “produced” the tapes, that person may know the whereabouts of Judge Nicolau, who disappeared on April 18 when an order for his arrest was issued. The Justice Ministry has now ordered the tapes investigated, and warned that whoever produced them may face charges for aiding a fugitive. On Saturday, July 15, any strength behind the Isto É tapes fizzled even further, when the Judge’s wife and attorney questioned their authenticity.

Although the government hoped and prayed this whole matter would die down, it made several mistakes that helped produce the opposite effect. For example, when news of the President’s signature on the authorization for extra funds became public, the presidential spokesman’s response to reporters was bizarre, along the lines of “the President doesn’t read everything he signs”. Brazil’s largest labor association, CUT, aligned with the left-wing PT party, immediately jumped on this. A statement by its president, Kjeld Jakobsen, said “maybe we should be glad it wasn’t a declaration of war”.

Although a definitive piece of evidence against President Cardoso has yet to surface, the opposition has decided to force the issue. They’ll be seeking a congressional inquiry after the July recess. Party leaders aligned with the government have said they will not support the request, but that’s not likely to stop anything. This is a municipal election year, and the President’s approval rating is at a very low 13 percent—that’s where the opposition wants Cardoso’s rating to stay, in effect eliminating any chance the President might have of favoring government-supported candidates in the October ballot.

The speed with which new details have surfaced since Eduardo Jorge’s remarks were made public, disavows any guesswork as to where all of this might lead. What’s known so far, as concrete facts go, is not as indicting against President Cardoso as some would make it seem, but it does ask a lot from Brazilian society. Essentially, Brazilians are being asked to believe that President Cardoso had no idea what his trusted aide, Eduardo Jorge, was up to in the office next door. No matter how one slices it, this is a tough pill to swallow. Consider that in the 1998 general elections, Cardoso supported the current governor of Brasília, Joaquim Roriz, at Jorge’s request, and against a candidate from his own party, the PSDB. And the top supporter of the Roriz campaign was none other than the now-expelled former Senator from Brasília, Luiz Estevão.

Daily O Estado de S. Paulo quoted a former driver employed by Judge Nicolau in Miami, at the million-dollar-plus condo where his neighbors reportedly include singer Whitney Houston. The driver claims the Judge and Eduardo Jorge exchanged phone calls frequently, and were “obviously very close”. To accept that all of this means nothing require a severe stretch, along the lines of believing that President Cardoso’s I.Q. is comparable to that of a dummy in a store window.

Meanwhile, the person who got all of this started, Eduardo Jorge, has been out of circulation, apparently answering the government plea for silence. A theory emerged as to why Jorge decided to grant the original interview to the financial daily Valor. Unnamed government sources told various newspapers Jorge did it as something of a pre-emptive strike, because he was blackmailed—threatened with the prospect of grave revelations in a series of taped conversations about to be made public (presumably the tapes released by Isto É magazine). Jorge’s attempt to stay a step ahead of this worked in reverse. Instead of defusing the issue, his interview immediately raised the possibility of direct involvement by the President—the angle now being pursued vigorously by the news media.

Finally, the media reaction is a story in itself. Government opponents in Brazil frequently complain that the news media lets the government, and President Cardoso in particular, off the hook much too easily. The claim is that the media doesn’t pursue topics that can make life difficult for the President or his administration. This is just so much whining: hardly a day goes by without serious exposés in print and broadcast, and this sidebar to a scandal is further proof that when there is, indeed, something to pursue, it will be done. The media’s track record in the past few years is sufficient proof of its vital influence, at a level never before seen in Brazil. For now, details are being dug up and the pieces put together. While nobody knows what exactly is at the end of this tunnel, one thing is certain: every news outlet worth its salt in Brazil is trying to find out, whether the President likes that or not.

The Isto É recordings are available on the magazine’s website:

Adhemar Altieri is a veteran with major news outlets in Brazil, Canada and the United States. He holds a Master’s Degree in Journalism from Northwestern University in Evanston, Illinois, and spent ten years with CBS News reporting from Canada and Brazil. Altieri is a member of the Virtual Intelligence Community, formed by The Greenfield Consulting Group to identify future trends for Latin America. He is also the editor of InfoBrazil (, an English-language weekly e-zine with analysis and opinions on Brazilian politics and economy. You can reach the author at

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