Collor de Mello four years after the fall – Part II

Part II

After two years as a President Fernando Collor de Mello
was still attempting to present himself as a reformist. He had already
lost the public’s confidence however and a Gallup poll taken in March of
1992 showed that support for his presidency had dropped to 16.3%. By the
end of the year he would be forced out of government, in disgrace.

Tom Bosque

Continued from the September ’96 issue

The Brazilian political system traditionally relied on exchange politics
or pork-barrel politics, at all levels. From local politicians securing
citizens votes to presidents securing legislators votes. Collor, like Sarney,
came from the northeast, where exchange politics is widely practiced. This
was the politics that Collor was familiar with. The exchange of
resources for support involves the manipulation of public power by officials
for the purpose of `buying’ political support in congress, financial support
from businesses or other interest groups. The reliance on these
“pork” expenditures is important within Brazil’s political system.
With a strong centralized political system, headed by a president, that
president has a lot of power, and is expected to distribute resources,
“pork”, down to the states and municipalities through elected
officials below him.

A president, in order to pass legislation, must secure support from
enough legislators. In a system where there are a lot of different political
parties and the president is from a relatively small party, he must be
able to negotiate many different deals. Sarney and Collor were in
this situation and had to rely on the exchange of material goods
for support.

The 1988 Constitution eased the rules which determine what it takes
to register as a political party, thus allowing more parties on the ballot
and in effect in the legislature. More parties meant more people who wanted
something in exchange in order to get legislation passed. Also there was
a rule in the constitution which allowed for the over representation of
the less progressive more traditional states of the northeast. For
example, the constitution mandated a minimum representation of eight and
a maximum of 70 representatives in the Chamber of Deputies.

If a strict proportional system was used, São Paulo would have
about 120 deputies and some of the small states would have less than eight.
States in the northeast have always been over represented in the Brazilian
legislature, and politicians from the northeast have a history of exchange
politics. Although the south and southeast have their corrupt politicians
and excess “pork” politics, most of the reformist interest are
in the industrial south.

As the reforms the Collor administration hoped would repair the economy
failed to produce results, Collor fell deeper and deeper in a hole and
had to use favors to cement a political coalition. The decline in revenue
caused by the economic situation, pressure from the World Bank and the
IMF (International Monetary Fund) to decrease the deficit and a constitutional
mandate to turn revenues over to the states reduced the size of the pot
from which past presidents usually drew. Collor needed to supply favors
and receive the money from them. This provoked an increase in corruption
during the Collor years, whether through “pork” or outright theft.

Collor set no standard of ethics and members of his team did not fear
any problems. Collor brought many people from Alagoas to work within his
administration. Many of them were only moderately talented in the workings
of a Federal government the size of Brazil. These people could see that
their time in Brasília was limited and almost acted as though they
had to get what they could before they were sent back to Alagoas.

Some of Fernando Collor’s friends that he brought from Alagoas were
Cláudio Vieira, who oversaw the distribution of the publicity budget;
Cláudio Humberto, who was the press Secretary; and Marcos
Coimbra, the president’s brother in-law who became a presidential aid.
But the most important person was Paulo César Farias, an Alagoas
businessman who was in charge of Collor’s presidential campaign fund.

By 1992, the economy of Brazil continued to fail to improve. The country
was not improving as Collor had promised and his stance as the opposite
of Sarney was not holding ground. In February 1992, Collor gives a speech
to congress emphasizing the parts of the social responsibilities of politicians
to the betterment and improvement of Brazil and its economy and
its society and the importance of the strict economic measures taken to
help curb inflation.

Many people already believed that these were only hollow words and that
the President never applied them to himself. But Collor continued to give
the impression of himself as a reformer. On the 18th of February, President
Collor signed a decree creating three new instruments to prevent fraud
and privileges in the federal government.

The responsibilities of being the president of such a large country
was beginning to take a toll on the President. On the 12th of February,
daily newspaper O Estado de São Paulo reports that there
had been death threats against the President and that he had changed his
daily routine. The President loses 12 kg. and looks thin and worried.
Rumors began to circulate through the country on the health of the
president. One rumor had him on the operating table, the next stricken
with AIDS. Collor was forced to continue to defend the fact that he was
in good physical health but with each public appearance he looked worse.

Rumors of his bad health caused the financial markets to swing and speculators
made lots of money. Collor’s personal style had a lot to do with the spread
of these rumors. His political image was to portray him as a sort of superman
and this led to speculations about his health even when he had a simple
cold. He would defend his health by having the television news showing
him doing pushups or jogging or playing tennis. But the rumors continued
to spread. In trying times rumors spread quickly, and in Brazil they spread
very fast.

By the second anniversary of his inauguration, Collor was still attempting
to portray the image of a reformist. In a speech on the anniversary
of his inauguration he states that his administration is committed to “…honesty,
transparency and clarity. It is an ethical commandment. It epitomizes respect
for the ideas that gave us the opportunity to serve the nation and it is
essential for the accomplishment of our objective.

“Faithful to its commitment to the democratic process, my administration
has been spearheading this drive for the modernization of the states to
the point that it is sending to Congress a number of bills dealing with
various issues ranging from strict punishment for public officials guilty
of illegal accumulation of wealth to new regulations for bids and contracts.”
But the public was beginning to see through the transparency of his
words. A Gallup poll taken in March of 1992 showed that support for the
Collor administration had dropped to 16.3%.

On March 30, 1992 Collor’s entire Cabinet resigns / is fired, in what
is described as an attempt to allow the President to reorganize his team.
The economy was a mess. The reforms that Collor promised seemed no where
in sight and the public was losing faith in the President. Rumors about
his health and about his associates were spreading throughout the country.

The press becomes very important in the spreading of rumors of improprieties
which later were revealed as fact. In May 1992, the president’s younger
brother, Pedro, in an article in the magazine Veja, makes accusations
against the President. Pedro accuses businessman Paulo César Farias
of an illegal accumulation of wealth. He also implicates the President
as a partner in several of Farias’ business deals including the purchase
of an apartment in Paris valued at $2.7 million and controlling interest
in the daily Tribuna de Alagoas in Maceió. Pedro goes on
to say that he and his brother took drugs, including cocaine, when they
were young.

Pedro claims that he is revealing this information against Paulo Farias
and his brother because of a moral sense of responsibility, that Fernando
Collor was elected on a platform of honesty and reform and that he wasn’t
living up to his statements. Pedro goes on to say that while governor of
Alagoas, Fernando Collor tried to seduce his wife and have them get a divorce,
also that the president had numerous affairs in the governor’s mansion.
He also accuses Collor of using state funds to invest in the financial
market and of keeping the profits. Pedro says that his brother’s ego and
the fact that he wanted Pedro out of the family business forced him to
reveal what he knew about Paulo Farias.

It was revealed that the infighting between the President and his brother
began because of the newspaper Tribuna de Alagoas, which was to
compete with the Collor family newspaper, and also that the President and
Farias were to set up 12 to 14 radio stations in and around Maceió
to halt any competition and political opposition from getting a voice.

In response to the allegations the President files legal action against
his brother for slander. The pressure of the presidency and these allegations
cause concern in Brazil about the President’s psychological condition.
The president starts to seem depressed and fatigued. Rumors about his health
continue to circulate.

By the beginning of June, due to the financial situation in Brazil,
inflation continues to rise, and the decay reflected in the “lack
of respect and violations of laws and citizens rights” spread rumors
about a possible “summer coup”. Forty military officers sign
and present a communiqué saying that the military were ready to
take action when it was necessary for them to “restore order”.
But at the same time 22 governors say they support the President.

On the first of June, Congress forms the Commission for Congressional
Investigation (CPI), made up of 11 senators and 11 deputies, to look into
the allegations made by Pedro Collor. Meanwhile the President continues
to play the reformer. On June 3rd, he signs law 8424, the Anti-Corruption
Law, which includes punishment of loss of position, dismissal, withdrawal
of political rights for up to eight years, fines, arrest, and even obligation
to pay for losses to the state. Also a politician upon appointment, is
to declare his/her assets and private goods and properties.

On June 8th, Pedro Collor agrees to cooperate with the CPI about his
knowledge of the doings of Paulo Farias. Also in June the magazine Veja
publishes an interview with former Petrobrás President Luis Octávio
da Motta Veiga. He comments on facts that the President is the source of
power behind Paulo César Farias, alias P.C.. So now there are two
sources behind the rumors about the President and his business associates
and how much money was being taken illegally. Luis Veiga claims that while
president of Petrobrás, Paulo Farias approached him several times
about a business deal involving about $250 million to make submarine drilling
platforms, and that Farias wanted to see the other bids. Farias was not
a contractor who would or could build such a structure but claimed to be
working on the behalf of other individuals.

Veiga also reported that Farias contacted him on behalf of an
entrepreneur, Wagner Canhedo, who wanted to buy VASP airlines, which
was owned by the state of São Paulo and in the process of being
privatized, and wanted to cut a deal with Petrobrás to eliminate
a $6 million debt held by VASP. In exchange, Petrobrás was to give
the new owners of VASP a $40 million loan to buy petroleum only from Petrobrás.

 

As absurd as this deal sounds, Veiga insists that Farias seemed to be
not really trying to make a deal, but to be handing out orders. Veiga claimed
that Farias often said that he was “not cooperating”. In the
article, he goes on to say that Farias had acquired an immense amount of
wealth that was undocumented and through influence peddling.

As the newspapers and magazines continued to run stories on the business
affairs of P.C. and the President, Collor decided to strike back. In a
speech published in O Estado de São Paulo, Collor declares
his innocence and high moral standards by emphasizing, “Within the
government, my personal action has always been ruled by absolute good faith,
by the strictest adherence to ethical principles…I am guided only by
my respect for the law and the Constitution.” Few people believed
him as the rumors started to be proven as facts.

In June 1992, Rio de Janeiro hosted the Eco-92 Conference. The conference
brought to Rio presidents, prime ministers and other foreign dignitaries
from all over the world to discuss the ecology. Collor had to put on a
good image as Brazil was showing itself to the world. With all the foreign
press in Brazil, the Brazilian media felt freer to report on the Collor
situation. An arrogance in the press developed.

On June 21st, O Estado de São Paulo reported that Renan
Calheiros, former government leader in the Chamber of Deputies, said he
was certain that President Collor knew that Paulo Farias was a middle man
handling funds and businesses of some ministers and claimed he warned Collor
about Paulo Farias as early as 1990. By July some deputies had begun to
ask for Collor’s resignation. In the July 8th issue of Veja, São
Paulo deputy, José Serra from the Brazilian Social Democratic Party,
(PSDB), says that it is the responsibility of the President to resign simply
because he knew of crimes and/or the misuse of funds within his administration
and did nothing to stop it.

It was reported that Farias had business deals in Florida which were
believed only to be used for money laundering. As more information became
exposed, more and more came to light. Allegations about Fernando Collor’s
financial situation were reported in the July 17th edition of the Folha
de São Paulo
. Sindifisco (National Trade Union of Fiscal Auditing)
completed a review of Collor’s declaration of assets and claimed there
were “strong indications of revenue omissions”. The Sindifisco
experts based their work on the declaration of assets presented by Collor
in August 1989 to the Superior Electoral Board compared to the apparent
wealth reported in the press.

In 1990 alone Collor purchased a lot in Brasília, refurbished
Casa da Dinda (the president’s personal residence in Brasília) and
took a trip to Africa and Europe for a total of $1.4 million. It was reported
that the monthly expenses for Casa da Dinda alone were 50 million cruzeiros
and the presidential monthly salary was only 10.8 million cruzeiros. The
President claimed he received a personal loan from a Uruguayan financial
institution to cover his personal expenses.

On July 1st, the chauffeur for President Collor’s private secretary
Ana Acioli, Francisco Eriberto França, gave an interview with the
magazine Isto É. He said how he routinely made pickups of
checks and cash, including dollars, from a company owned by Paulo
César Farias called Brazil Jet. The cash was used to pay for many
of Collor’s personal expenses including the buying of expensive jewelry.
Bank records revealed that Ana Acioli had passed checks totaling more than
ten times her salary through her account.

The CPI found that invoices of Farias charter airline showed the company
never used the planes for charter purposes, but only for flying businessmen
around Brazil and making trips to the Cayman Islands and the Netherlands.
Allegations of drug trafficking surfaced when some of his planes were found
to have false bottoms. Ghost bank accounts began to be exposed, bank accounts
controlled by one person but under many different names.

By late July 1992, there were many unanswered questions. Why did the
President need to pass money through his secretaries account in
order to give an allowance to his wife? Why were there all these ghost
accounts? How did Paulo Farias, who in 1990 owned 2 businesses, one which
was losing money, become the owner of the largest Fiat dealership in the
northeast, owner of Brazil Air Taxi which had just bought a $10
million aircraft, and president of Tribuna de Alagoas communications with
investments of $5 million?

By August, the case against Collor and Farias was moving fast. A coalition
of Political Parties was forming to guarantee enough votes to demand impeachment.
The opposition was led by deputy Ulysses Guimarães and senator Pedro
Simon of the Brazilian Democratic Movement Party, both from the state of
São Paulo. Also key figures were senator Fernando Henrique Cardoso
from the Brazilian Social Democratic Party, again from São Paulo
and Liberal Front Party senator, Guilherme Palmeira from the state of Rio
Grande de Sul. The press, both written and on television could not
get enough information for a hungry public. Impeachment seemed inevitable
but there had been no precedent set.

The new constitution only vaguely discussed the issue of impeachment.
Leaders of the opposition bloc of the Congress, including ex-president
José Sarney, now a senator from the state of Amapá, began
to meet to discuss the issue and how best to enforce the impeachment without
causing too much anxiety amongst the population. Meanwhile the press continued
to report on “ghost deposits,” unexplained wealth, rumors of
drug connections, influence peddling and other forms of corruption in connection
with Paulo Farias and his association with the President.

The groups leading the call for further inquiry and possible impeachment,
a coalition of the PMDB, the PT, and other opposition parties, called for
organized demonstrations to be held in the first weeks of August. The first
one was to be held in Curitiba in the state of Paraná, which was
the first city to hold organized demonstrations in 1984 leading to direct
elections. Demonstrations were to follow in all the other major cities
throughout Brazil. These opposition leaders wanted to use the spirit and
momentum which led to direct elections and the eventual election of Collor
to lead to his democratic removal.

As the CPI investigation continued and stories and rumors were spread
through the press, the Rio and São Paulo stock markets were negatively
effected. There was no sense of stability as to what the next week, or
month, would bring, and investors used extreme caution. As time went by,
more and more information about Farias and influence peddling were reported
including large real estate deals in São Paulo, sometimes involving
city or state owned lands and how they would be developed.

It was also reported that Paulo Farias had withdrawn large sums of money
just before all bank accounts were frozen leaving him with money at his
disposal while many Brazilians were stuck with savings they could not use.
In late August the First Lady’s personal secretary was charged with fraud,
embezzlement and illegal association with unlawful persons.

Foreseeing a vote of impeachment on the horizon, Collor and Farias began
to develop a strategy for guaranteeing votes of support. Farias threatened
to disclose names of other politicians whose campaigns he helped finance.
Collor used his resources at state banks such as Caixa Econômica
Federal and Banco do Brasil to secure support. Banco do Brasil controls
funds used to provide subsidized finance for certain agricultural, business
and social projects. According to press reports the president of Banco
do Brazil, Lafayete Coutinho, offered deputies and senators willing to
back Collor the opportunity to choose the municipalities that would receive
investments for local projects.

On the 24th of August, 1992, the Senate presented the CPI report to
the public on Rede Globo Television. Now all the rumors were confirmed.
It was reported that “The President of the Republic has made inappropriate
use of his economic advantages during his term in office to adapt the legal
procedures. These crimes can also be considered as a case of malfeasance.”
The CPI report goes on to list all the various crimes committed by Paulo
Farias from money laundering to influence peddling and the Senate and constitutional
laws which were violated by the President. Article 85 of the 1987 Constitution,
list crimes of presidential responsibility such as crimes against the union,
the free exercise of power, internal security or the property of the executive
branch, or failure to comply with the provisions of the budget law or judicial
decision.

The report also lists the ghost accounts held by the President’s personal
secretary and the First Lady’s personal secretary, and the huge deposits
made from companies owned by Paulo Farias. Collor continued to insist that
the CPI investigation and the talk of his impeachment were only the result
of a power struggle. He denied the depths of his association with Paulo
Farias which were stated in the CPI report and that he could not know what
everyone in his administration was doing. He stated that the political
turmoil was only a way for his opponents to influence the upcoming municipal
elections due in October.

Demonstrations continued in all the major cities, many times led by
students but also participating would be civil servants, teachers, even
housewives and children. The demonstrations were peaceful and often times
had a party atmosphere to them. The Police and Military either could not
or would not get involved. The press reported facts gathered by the CPI
and the demonstrations justified the public’s belief in those facts. The
question of the military taking aggressive action was always present

but the military was no great ally of Collor, who had little experience
in national politics to foster ties with the military, and the public sentiment
was so strong in favor of impeachment that a coup was not the right thing.

Historian Raimundo Fararo stated, “The purely political use of
impeachment always raised the suspicion that it is being used because a
coup-d’état is not an available option.” It was much
wiser for the military to let the public make the decisions. The anti-Collor
movement had carried out hundreds of popular mobilizations, some involving
up to 700,000 demonstrators without one personal injury or broken window.
Collor was soon to be out of power and it was wiser for the military to
let him be removed peacefully. Opposition to Collor had grown so much that
military and Church officials feared that if Collor was not tried and the
impeachment vote not taken that riots might occur.

Up to this point the demonstrations had been peaceful. São
Paulo mayor Luíza Erundina de Souza put it this way, “Violent
demonstrations had not taken place yet because there is still a climate
of confidence in the institutions, but 25% inflation per month and the
millions of unemployed are going to generate a very serious problem”.
It was felt that as long as Collor left peacefully, the demonstrations
would remain peaceful.

In a last ditch attempt to save face, without admitting guilt, Collor
said the country had never been so alive. But by the end of August Collor
had a disapproval rating of 84%. People started to wear black clothing
as a symbol of support for impeachment. At an Independence Day ceremony
on September 7, Collor was booed loudly and had to leave. On September
11, Rio’s daily O Globo reported that the Federal Police had identified
President Collor as the head of the influence peddling scheme set up by
Paulo Farias. The Police came to this conclusion based on computer data
seized from EPC Construction owned by Farias.

On the 18th of September, the largest political demonstration in the
history of São Paulo took place. Among the participants were four
governors and mayors of several state capitals. On September 24,
the president’s wife, Rosane Collor, was indicted for embezzlement involving
the misuse of public funds related to the Legião da Boa Vontade
(Brazilian Welfare Legion) which she had been president of.

The date for the impeachment vote was set for the 29th of September.
This was important because municipal elections were to take place on October
3. Most mayoral candidates called for impeachment. No politician wanted
to be seen as supporting Collor. Then the Supreme Court made two important
decisions: not allow the members of Congress to vote secretly and to allow
live television broadcast of the roll call vote. Now each deputy
would have to face the nation on live television and cast a vote in support
of the President or against him.

On the 28th of September, Army troops were placed on a state of alert
in most capitals and would stay there until after the impeachment vote.
The next day, the 29th of September 1992, the Chamber of Deputies took
a vote to decide to start impeachment proceedings. The outcome was overwhelming
in support of impeachment by a vote of 441 to 38. When the issue of impeachment
first began to be discussed there was uncertainty in the new Constitution
as to the correct majority, either as simple 50% plus 1 or by a 2/3 majority.
This issue became a moot point. Deputy Ulysses Guimarães, commenting
on the overwhelming vote called it a surprise and a massacre.

In a short period of time, three years, the Brazilian people had gone
from electing a president to peacefully removing him from office and thus
had taken a huge step forward on the road to a greater democratic society.
It is this step forward, and the ideas of democratic change, which will
help propel Brazil forward to achieve greater social changes. Changes in
the way Brazilians deal with many of the social conditions which keep a
large majority of their people living in poverty and with ignorance.

In the beginning of the summer of 1992, when the question of impeachment
was starting to be explored in the press and with the public, senator Fernando
Henrique Cardoso, from São Paulo, currently the President of Brazil,
said that raising the possibility of impeachment was harmful to the nation
for several reasons, one of which was that it was a source of embarrassment.
This was the farthest thing from the truth. Where as many people at first
thought that an impeachment would tear the country apart in actuality it
brought the country together. It became a source of pride for many Brazilians.

Hasn’t the American public, through demonstrations and the press, forced
the resignation of President Nixon during the Watergate affair? Many Brazilians
looked at their situation in comparison. In fact the situation in Brazil
was often referred to as Collorgate. Brazilians had done something unique
to a democratic society and it placed them in the ranks of other democratic
nations.

Asked to respond to the fact that he was the most applauded deputy during
the voting session, Ulysses Guimarães said, “I think it is
recognition of my public activities. I thank God for having allowed me
to live as I lived and for allowing me to reach this point of my life to
observe an event like this. The triumph of the citizenry, democracy and
my country. It is an example for all Latin America.” Yes, it
is an example for all of Latin America, for as we head into the 21st Century
let us hope that peaceful and democratic changes are the norm, not the
military and violence which have been so much a part of the history of
this part of the world.

After many years of struggle, from his leading of the formation of the
Brazilian Democratic Movement Party in the 1970s, an early and the largest
political party to question military rule, to his leading for the call
for the end of military rule, to his call for direct presidential elections
and leading the movement for the impeachment of President Collor, Ulysses
Guimarães was not able to see where Brazil is headed. Two weeks
after the impeachment vote, after spending a weekend away from the press
and his duties, on an island off the coast of Rio de Janeiro, his helicopter
crashed into the sea. And so the man who led the opposition through some
of the worst years of Brazilian history is unable to see where Brazil is
going.

On December 31, 1992, President Fernando Collor de Mello resigned

from the presidency of Brazil the day before the formal impeachment
was to take place. After his resignation he was cleared of all charges
which may have been raised in connection with his association with Paulo
César Farias.

Fernando Collor currently lives in Miami and occasional
raises the possibility of him running for public office in Brazil.

Pedro Collor died of brain cancer in 1993.

Paulo Farias was sentenced to six years of house arrest
for crimes committed which were uncovered during the CPI
investigation. In June of this year he was found shot to death
along with his 28-year-old girlfriend in his home in Alagoas. Speculation
continues about the circumstances regarding his death. It is reported that
he had millions of dollars in Swiss banks at the time of his death.

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