Brazil: Amid Political Crisis, Bolsonaro Likely to Trade Key Posts for Support

The coronavirus killed 23,413 Brazilians in May, pushing the toll close to 30,000. With over half a million confirmed cases, the country’s coronavirus outbreak is the second largest in the world, behind only the US. The pandemic is sending the economy into recession and deepening political polarization, on top of the Supreme Court having authorized an investigation into President Jair Bolsonaro’s conduct.

In a recent deposition to federal authorities and Supreme Court Justice Celso de Mello (see our Personality of the Week), former Justice Minister Sergio Moro alleged that the president had interfered in Federal Police affairs. Moro claims that Bolsonaro attempted to remove the then director of the Federal Police in order to end corruption investigations into his son, Rio de Janeiro Senator Flavio Bolsonaro.

On 22 May, Judge Mello released a video of the 22 April cabinet meeting, where Bolsonaro complained about the investigation of his family and threatened to replace leaders of the Federal Police with his own allies. The video sparked outrage among opposition leaders as well as new calls to impeach the president. Mello’s decision on the same day to authorize Attorney General Augusto Aras to proceed with this investigation drew harsh criticism from the minister of institutional security, retired Gen. Augusto Heleno. The latter hinted at his support for shutting down the Supreme Court, but then backtracked later in the week amid popular outcry. Supreme Court Justice Alexandre de Moraes is now evaluating whether Heleno’s conduct constituted an impeachable offense.

On 30 May, Mello warned his Supreme Court colleagues that the decay of Brazil’s constitutional order is accelerating, and compared the political crisis to the events leading to the fall of the Weimar Republic in Germany. He encouraged the justices to defend the constitution against those who advocate a return to military rule and totalitarianism. Mello’s supervision of the investigation into the president is now at the center of an emerging political crisis that pits Bolsonaro against the Supreme Court. Before his term expires in December, we expect Mello to aggressively defend constitutional rule and support further investigations into presidential misconduct.

His supervision of the investigation hinges on Attorney General Aras and whether the nation’s top prosecutor would consider charging Bolsonaro with misconduct. On 29 May, Bolsonaro told reporters that he is considering nominating Aras to replace Mello on the bench, a comment widely interpreted as an effort to obstruct justice and persuade Aras to limit his investigation of the president. Aras’ authority includes discretion over such investigations, but his actions regarding the president’s future are now subject to greater scrutiny. We expect Aras and a majority on the Supreme Court to tread carefully in the coming weeks, but further evidence of presidential misconduct would increase pressure on him to deepen the investigation and encourage additional lawmakers to consider impeachment. So far, 29 petitions for presidential impeachment have been submitted to Chamber of Deputies President Rodrigo Maia for consideration.

Meanwhile, Bolsonaro is adding fuel to the fire. On 31 May, he stirred up more controversy by supporting protests against the Supreme Court and making public appearances in violation of social distancing guidance. For the sixth Sunday in a row, his followers gathered at the Plaza of Three Powers (located between Congress, the Presidential Palace and the Supreme Court in Brasilia) to support him and protest both the legislative and judicial branches. (Opposition rallies were also held throughout the country, despite the extension of stay-at-home orders in many jurisdictions.)

This brewing political crisis amid the coronavirus outbreak threatens to further disrupt Congress and slow down efforts to formulate policy responses to the public health emergency and recession. For the oil and gas sector, the crisis distracts from the Ministry of Mines and Energy’s efforts to adapt regulations and E&P contracts to the short-term challenges facing operators. It may also force the president to offer critical posts – including those of Minister of Mines and Energy Bento Albuquerque and recently nominated Secretary of Oil, Gas and Biofuels Jose Mauro Ferreira – to congressional allies in exchange for opposing any attempts to impeach him.

For example, the conservative Kim Kataguiri (DEM), a former ally of Bolsonaro’s and rapporteur of the environmental licensing reform in the Chamber of Deputies, not only endorses presidential impeachment but also filed a petition last week to impeach Heleno. To counter such mounting opposition in Congress, Bolsonaro will likely nominate increasing numbers of party leaders and congressional allies to executive branch posts. However, the looming cabinet reshuffle will increase the obstacles to interagency coordination in the short term, as well as complicate executive branch efforts to push energy and environmental licensing reforms through Congress before the end of the year.