Mark Collins – Brazil Hit with Petrobras Corruption Brick

What was supposed to be a BRICS star looks as if it is flaming out. The starts of two major reports:

1) New York Times:

Petrobras Oil Scandal Leaves Brazilians Lamenting a Lost Dream

Alberto Youssef, a convicted money launderer and former bon vivant, sat in a Brazilian jail cell in March of last year, getting ready to tell his lawyers a story. It was about an elaborate bribery scheme involving Petrobras, the government-controlled oil giant. He opened with a dire prediction.

“Guys,” Mr. Youssef said, “if I speak, the republic is going to fall.”

To those lawyers, Tracy Reinaldet and Adriano Bretas, who recently recounted the conversation, this sounded a tad melodramatic. But then Mr. Youssef took a piece of paper and started writing the names of participants in what would soon become known as the Petrobras scandal. Mr. Reinaldet looked at the names and asked, not for the last time that day, “Are you serious?”

“We were shocked,” he recalled, sitting in a conference room in his law office in downtown Curitiba, the capital of the southern state of Paraná, one morning in June. “It was kind of like, in Brazil, we know that corruption is a monster. But we never really see the monster. This was like seeing the monster.”

What Mr. Youssef described to his lawyers, and then to prosecutors after he signed a plea agreement last year, is a fraud that has destabilized the country’s political system, helped tilt the economy into recession and left thousands unemployed. It has all but devastated Brazil’s status as an up-and-comer on the world stage…

2) Globe and Mail:

Brazil faces political, economic chaos with an ‘uncertain future’

Brazil’s political and economic crisis deepened through a dramatic week in which the President’s popularity and the value of the currency both hit extraordinary low points.

Congress is paralyzed, the ruling coalition has splintered, the economy is in free fall and a powerful clique of opposition politicians seems hellbent on toppling the President regardless of the costs.

The national newspaper Folha de Sao Paulo has begun to put a crimson headline reading “Brazil in Crisis” above related articles – splashing red over much of the paper.

“We’re in a very tense moment with an uncertain future,” said Jose Alvaro Moises, a professor of political science at the University of Sao Paulo. “Few people in Brazil feel comfortable saying what might happen in the next months or even the next few days.”

One strand of the crisis concerns the economy: There is a recession provoked by the end of a commodity boom, growing unemployment and inflation at its highest rate in a decade. The real hit 3.52 against the U.S. dollar this week, its lowest value in 12 years, and the country’s investment grade is imperilled…

From last year:

Brazilian Oil (Pipe) Dream? Or…

Brazilian Economy: Junk?

Brazilian Infrastructure: Lots of New Junk

Mark Collins, a prolific Ottawa blogger, is a Fellow at the Canadian Global Affairs Institute; he tweets @Mark3Ds

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