Could Petrobras unseat Rousseff?

By Artur Salles Lisboa de Oliveira

Dilma Rousseff and Petrobras

Petrobras has been a symbol of Brazilian pride since its foundation back in the fifties.

The state-owned oil company attracts all sorts of investors ranging from small time backers pursuing gains by investing their savings for the education of their children to big time players interested in having a say in the decisions of the corporation. However, in the past few years the government has wilfully overlooked rising indebtedness and plunging shares which has created political turmoil, accusations of corruption and disillusionment among Brazilians.

Recent scandals reported by the international press regarding the acquisition of the refinery of Pasadena by Petrobras could lead the Brazilian Congress to pursue a deeper investigation over the contracts signed by the former head of board of directors, Dilma Rousseff. In a recent statement, Ms Rousseff tried to understate the case by claiming to not have any knowledge of the “put options” clause which allowed the Belgian Astra to sell its 50 per cent stake in the American refinery to the Brazilian company for over US$1 billion.

The Brazilian benchmark, Ibovespa, responded aggressively to a seven per cent drop in the popularity of Ms Rousseff as reported by Ibope poll last week. A strong rally followed with investors cheering the possibility of a shift in power in Brazil. In other words, the financial markets sent a strong message to opposition leaders to continue pursuing a deeper investigation inside Petrobras, the outcomes of which are likely to be damaging to the government’s credibility as Brazilians get ready to vote in September.

However, government supporters are willing to do whatever it takes to overshadow the scandals by using such a usual practice in Brazilian politics: the creation of several Parliamentary Comissions of Inquiry to investigate possible opposition leaders’ mismanagements of their own accounts. Therefore, in the end of the day the public interest will come in second as politicians from different colours arrange a political trade to save their own skins.

There are plenty of reasons for an investigation inside Petrobras as public money was used in questionable transactions regarding acquisitions of assets in the United States. Nevertheless, those who are interested in political gains should be advised that Parliamentary Comissions of Inquriy in Brazil tend to lose focus rapidly and block Congress from approving any legislation until government supporters and opposition leaders reach any sort of agreement to save their own jobs.

Artur Salles Lisboa de Oliveira writes for Exame Magazine.

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