Looking back at Collor
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.
Tom Bosque is a graduate student at San Francisco State University in Latin American History with an emphasis in Brazil.
