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During the presidency of Lula Da Silva, billions of dollars in bribes were taken to allow construction companies to overcharge the government-owned oil company, Petrobras. Now, Brazil has corruption, but it's actually pretty good for a developing country. But the people of Brazil have come to expect more, and they have been left down.

Current president, Dilma Rousseff, was chairwoman of Petrobras during the period of corruption, but no one knows whether Lula or Dilma were involved or aware. But Lula was under investigation before Rousseff appointed him to be her chief of staff, a move that means he can no longer be prosecuted by a normal court.

I think this whole thing speaks very highly of Brazil. A reckoning had to come, and I'm pleased the citizens are holding the government accountable. However, I can't stop seeing parallels between the awful partisan situation here in the U.S. and the lack of skepticism people in this story have when it comes to believing awful things about their political opponents.

Using this scandal to clean up Brazil must be done, but using it to score political points or gain power is going to rip the country apart.

This is an epic story, and no one knows where it ends. Whether Rousseff retains power and who gets elected once the house is fully cleaned out will say a lot about how this very young democracy handles its economic and cultural growth when people's perceptions are controlled largely by social media.

I think there are many good things in Brazil's future, but leaders will have to do more than fight for power. They will have to actually lead.

Thanks to
Alex Cuadros: https://twitter.com/alexcuadros
Rafael Prince: https://twitter.com/rafaelprince
And all of the Nerdfighters at Nerdfighters Brasil on Facebook.

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Good morning John.

It's easy for us Americans to get caught in our bubble, especially when things are as weird as they are right now, but the rest of the world continues to go on, and in Brazil that means the government kind of totally falling apart in a way that makes House of Cards look frankly boring.

When I asked about it on Twitter Brazilians mostly sent me GIFs to explain how they felt, but I also got a message from a diplomat in Brazil who told me that Brazilians have a saying: "Brazil is not for beginners." But maybe by the end of this video you will no longer be a beginner, so let's go there.

Brazil is a big country, 200 million people, as big as the UK, France, and Germany combined. It's also big enough to fit all of those countries inside of it three times. At least. It's extremely ethnically and economically diverse with a wide gap between the richest and the poorest. That economic gap also falls roughly on racial lines and also on political lines, with wealthy white people mostly in big cities, being mostly conservative, and poor people of native or African descent being more liberal.

Brazil has a diverse economy. Their the ninth largest producer of oil, the second largest producer of beef, the third largest producer of iron ore, and they have the world's seventh largest economy.

From 1964 to 1985 they were ruled by a military dictatorship and in a "stunning turn of events" that military dictatorship had a lot of bribery and corruption in it. But in an actual not sarcastic stunning turn of events Brazil managed to transfer from that military dictatorship to a democracy with relative ease and like sort of slowly and without very much violence.

So its worth remembering throughout this entire process that though Brazil seems very mature economically and politically, its government is only 30 years old. It's new and they haven't been doing it for very long. It's pretty remarkable.

There was plenty of economic and political badness in the 1980s and 90s. But thanks to a lot of hard work and China's insatiable appetite for iron ore and hamburger, Brazil managed to get its economy on track and it's become one of the great success stories of the developing world... until the last couple years.

So remember how bribery and corruption were really rampant in the old military dictatorship? Well that's a difficult thing to take out of the culture of both companies and the government. And it has not been removed in Brazil.

But over the last thirty years Brazil has become more democratically mature and, somewhat unusually for Latin America, it has a really strong independent judiciary and a really strong independent police force.

So the rock of Brazil's culture of bribery and corruption has come up against the hard place of its strong independent judiciary. And something had to break. And it has.

But before we get there, let's talk about Lula. 

Luiz Inácio Lula da Silva was, in the 80's a revolutionary socialist who mostly worked against the military dictatorship as a union organizer. After the dictatorship transitioned to democracy (in a very weird cool long story that I don't have time to tell you) Lula emerged as a strong political figure and the head of the newly formed workers party.

And the worker's party wasn't able to gain much national traction until Lula became what some Brazilians called Lula-Lite. Still Lula. Still for the people. Still from the poorest part of the country. Still representative of that soul of Brazil. But also willing to work inside of the system, also willing to help out big corporations, who are a big part of Brazil's economy and how Brazil works.

After running and losing three times, Lula was elected in 2003 and remained president until 2011, during which time he presided over some truly remarkable achievements. Including an extremely successful social program that basically paid poor families to send their children to school - a program that's credited with helping lift tens of millions of Brazilians out of poverty.

Lula left office with an unprecedented 80% approval rating. His Chief of Staff, an economist who was once a guerrilla fighter against the military dictatorship and was captured by them and tortured (amazing life this woman has had and continues to have) was elected pretty much as his successor because he couldn't run for a third term.

Now Lula was almost never blame free. In 2005 his government was involved in a scandal which saw members of congress being paid $12,000 a month to vote the way that Lula wanted them to vote. But Lula was never directly implicated in the scandal, though several members of his government resigned.

In Brazil it has become so common for huge scandals to fizzle out without anybody getting in trouble that they have a phrase for it. They call it "ending in pizza." And I'm not saying some Portuguese word that sounds like pizza. I'm saying pizza.

Well, the days of things ending in pizza appear to be over, for a bunch of different reasons. First because of the massive scale of the scandal, and yes we're finally going to get there.

Petrobras is Brazil's only oil company. Its majority owned by the government and entirely controlled by the government. It's Brazil's largest company, one of the wolds largest companies, its responsible for 10% of Brazil's GDP, and a lot its government's revenue.

And it spends (as you might expect) a lot of money on construction contracts, and it's maybe always been kind of been the case that high up Petrobras employees and the government officials that appointed them (because remember is controlled by the Brazilian government) would give contracts to construction companies that overcharged the government massively, and the CEO of the construction company would pocket some of the difference, and some of the difference would come back to the politicians and the employees who, you know, helped get them the contract. It's a very common corruption thing. We have it here in the US, we call it graft. But it's basically just a company bribing a politician for a lucrative contract. And as Petrobras grew under Lula (thanks mostly to the price of oil getting really high), the amount getting kicked back grew as well, to truly massive, massive proportions. It's the largest corruption scandal in the history of any democracy on earth. Billions of dollars. One guy has offered, because, you know, he's scared, to give all of the money that he took in bribes back to the Brazilian government. Uh, that amount of money is a hundred million dollars. One guy! Many people are going to jail. This is not ending in pizza. Around a hundred of Brazil's current members of congress, almost a fifth of the entire body of congress is under investigation right now. No political party is blame-free but the Workers Party, which was in charge at the time, and also supposed to be the party against this kind of corruption, is kind of catching most of the flack. 

But more than just the scale it's also just awful timing. People are poised to dislike the government right now because Brazil is in the middle of a giant recession. The scandal has resulted in lots of lost jobs. The Zika virus epidemic is hurting tourism, Chinese retraction is terrible for Brazil, massive trickle-down loans to large corporations didn't spur economic growth, and if you've been to a gas station recently, you know that oil is not the profit center it once was. Always difficult for politicians and citizens, Brazil has had to implement austerity measures to get its budget in line with its revenue, but it's more than just the scale and the awful timing. Brazil also really, mostly, doesn't like the current president. They just really don't like her.

Two-thirds of the country, according to a recent poll, want her to be impeached, but it’s more than just the scale and the economy and the president that nobody likes. It’s also Judge Moro, a guy who has taken lessons from the 90s campaign in Italy to take down the Mafia, a guy who is willing to make deals with criminals if it means uncovering more of the scandal, a guy who doesn’t mind bending the rules if it means getting support from the public, and a guy who doesn’t seem to mind being deified and exalted by a lot of the Brazilian public.

Searching for some non-political person to put their faith in, Brazilians have taken a lot of the love they lost for Lula and put it into Judge Moro. He says he has no interest in politics but he doesn’t really seem to be acting that way, and if Rousseff is impeached, and there are two current hearings trying to impeach her, a lot of people would like Judge Moro to run, but it’s more than just the scale, and the economy, and the president, and the charismatic judge who takes no prisoners, or rather takes lots of prisoners. It’s also the deep, kind of ugly, partisan divide in Brazil. No one knows how involved Rousseff and Lula were in the Petrobras scandal or if they were involved at all, but it doesn’t seem like anyone is waiting for due process to make their judgements. And a story that might feel pretty familiar to people in America is social media has hyper-polarized Brazil. People in Brazil spend a lot of time on social media and their filter bubbles are just as strong as ours. People tend to hear and thus think just the worst things about their opposition and everyone’s cynicism about everyone else, which I admit is kind of justified, results in lack of skepticism about negative stories about the opposition. And I am not saying this is a unique problem to Brazil. But like when Judge Moro released a recorded telephone conversation in which Rousseff appeared to be telling Lula how she would protect him from prosecution, a lot of people thought, “How could anyone still be supporting these people? They are so obviously corrupt,” but a lot of other people thought, “Why is a judge taking this seemingly political action and making this recording public a mere three hours after it was recorded without due process?” Lula and Rousseff say it is just 100% partisan attacks trying to take them down and have the opposition parties gain political power. The opposition says that it is 100% just them trying to get to the bottom of the scandal, even a cursory inspection though shows that it is definitely both of those things.

In response to her plummeting approval ratings and multiple impeachment hearings and also possibly to protect him from prosecution, Rousseff has brought Lula on as her Chief of Staff and if that seems fishy, it’s because it is, but also the more conservative parties, some of them fed by classism and racism, are definitely using this as a political opportunity to gain power. Meanwhile, on the left a lot of people are seeing the Workers party as way too centrist and obviously corrupt and are running away from them toward the left and that’s just creating a deeper partisan divide inside the county, but every major party is involved. Five of the people on Rousseff’s impeachment committee are under investigation themselves. Many of the most respected leaders in the country are not going to make it out of this unscathed, which means it is going to be hard for Brazil to lead its way out of this problem. But it isn’t just the bribery that’s the problem. Paulo Maluf, who literally can’t leave Brazil because he’s wanted by INTERPOL, ran for reelection and won with the campaign slogan “I steal, but I deliver.” Lula, on the other hand, has had his own quote from 1988 thrown back at him on every social media platform on the internet: “In Brazil, when a poor man steals he goes to jail. When a rich man steals, he becomes a minister.” Many Brazilians now see this as Lula predicting his own future. Now this is all bad in the near term for Brazil but I think it’s good for Brazil in the long term because it shows that being a crooked politician is not worth it.

As for what happens tomorrow and the next day, nobody knows. It’s a bad situation and Brazilians on the whole are very cynical about the government but they’re also very pragmatic. While passions can certainly run high in the individuals, there is an overall culture of peaceful evolution rather than violent revolution and very few people seem at all interested in giving that up, which is great news.

John, I’ll see you on Tuesday.

Thank you to diplomat Rafael Prince and journalist and author Alex Cuadros for all of your help.

Alex’s book Brazillionaires will be out in July and thank you as well to all of the members of the Brazilian Nerdfighters Facebook group. Thanks for helping me out and keeping me straight.