No end: the crisis of Brazil's Workers' Party

Hilary Wainwright
26 September 2005

“When there is such an overwhelming disaster and you see yourself as part of this disaster, you begin to question your whole life. Why so many years of sacrifice and struggle?” Congressman Fernando Gabeira expresses the feelings of many petistas – members or supporters of the Brazilian Partido dos Trabalhadores (Workers’ Party / PT) – when they heard that the party they built or supported as an instrument of democratic, ethical politics, was governing on the basis of systematic corruption.

The Brazilian left is in a state of profound shock and confusion. Over the past two decades, hundreds of thousands of people have devoted their lives to creating the PT as a principled and forceful instrument of social justice against one of the most corrupt and unjust ruling elites in the world. Now they are being forced to come to terms with their own party’s lack of principle.

Also in openDemocracy on Lula’s political project and the crisis in Brazil:

Marco Aurélio Garcia, “Brazilian future” (July 2003)

Tarso Genro, “From Brazil to the world…” (July 2003)

Ivan Briscoe, “Beyond the zero sum: from Chávez to Lula” (July 2003)

Arthur Ituassu, “Lula and Brazil: new beginning or dead end?” (May 2005)

Arthur Ituassu, “Lula: the dream is over” (August 2005)

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I had been to Brazil several times in a mood of hope, to write about the participatory political experiments of the PT and to engage in the World Social Forum hosted by the then-PT government of Porto Alegre. My most recent visit to Brazil, after months when a “money-for-votes” scandal and wider evidence of financial wrongdoing have exposed the malpractice of leading PT officials, was an attempt to find answers to two troubling questions:

  • how could the party of participatory democracy have followed the example of its political adversaries to the right and become the party of corruption?
  • has the democratic creativity the Workers’ Party displayed in the years before the election of President Luis Inácio Lula da Silva in October 2002 survived the waterfall of scandal engulfing it?

The corruption of reform

In its almost four years in office, Lula’s government – which came to power committed to achieving social justice by building on the power of popular movements – has pushed through neo-liberal reforms of which Tony Blair himself would be proud. These included what amounts to the partial privatisation of an extremely unequal public-pensions system, which has left Brazil’s extreme social inequalities almost untouched; and the amendment of the country’s relatively radical (albeit contradictory) 1988 constitution to facilitate the creation of an independent bank with the freedom to raise interest rates as high as it wants.

There have also been social reforms – for example, a basic (but very low) income for all poor families – which are hardly adequate to the problems they seek to address; moreover, many of them, along with the relatively progressive aspects of Lula’s foreign policy, have not needed the congressional approval that the PT finds difficult to acquire. (Lula received 67% of the vote in 2002, but the PT – although the largest party – won only a fifth of the seats in congress).

Now, even the modestly progressive elements of these reforms have now been overshadowed by the corruption scandals that exploded in June 2005 after a revelatory TV interview by a member of congress from a small party allied to the PT, Roberto Jefferson (who has himself fallen victim to the process he unleashed). It is generally admitted that the cúpula (group at the top) of the PT bribed political parties of the right to join their parliamentary alliance and gave monthly payments to congressmen of the right to support their legislation.

The corruption extended also to the PT’s strategy for winning the 2002 election. This, it turns out, was based on a secret slush fund or caixa dois (literally “a second cash till”) sourced by donations from businesses contracted by PT municipal governments, public companies and private companies seeking government contacts. The publicist responsible for Lula’s 2002 advertising campaign admitted he had received money from these PT funds through an illegal account held by the PT in the Bahamas.

There is evidence, too, of personal corruption. The PT treasurer received a Land Rover; the Trotskyist-turned-monetarist finance minister, Antonio Palocci, made a suspiciously vast speculative gain on a house. But far more important than allegations against individuals – many of which circulate without definitive evidence – is the wider corrosion of democracy in Brazil that the scandal has unearthed.

Many observers attribute this to the way that an instrumental methodology of “by any means necessary” has degraded the political goals and values of the very party that offered a new, clean political project in Brazil. The most significant figure in creating this operating model (though unlikely himself, despite extensive allegations, to be corrupt) is José Dirceu – the ex-guerrilla leader (once responsible for kidnapping the German ambassador, and who subsequently spent years in exile in Cuba) who became Workers’ Party president in 1994 and was the architect of Lula’s three election campaigns until his 2002 victory.

The evidence of corroded ends is stark. The revelations of political corruption came after it had become clear that the government had moved from a supposedly tactical acceptance of the International Monetary Fund (IMF) terms to a wholehearted acceptance of neo-liberal orthodoxy. Interest rates in Brazil are, at 19%, among the highest in the world. The government continues to generate an internal surplus far higher than that demanded by the IMF, which can rely on the economists who determine policy in the presidential Palácio do Planalto to do its work for it.

Indeed, perhaps the most crucial signal that the leadership had broken the bond at the heart of the original PT project was Lula’s failure to turn his electoral mandate and huge international support into a democratic counterforce to drive a hard bargain with the IMF. “He could have got much better terms in order to pursue the social programme for which he was elected. At that point, the people would have been on the streets behind him”, says Plinio de Arruda Sampaio, a founder of the party with Lula who now plans (in his 70s) to test “for the last time” whether the party retains any integrity by standing for election as party president.

It’s not just Brazilian leftists who are shocked and disoriented by what has been happening in the elegantly designed corridors of office (but patently not of power) in Oscar Niemeyer’s Brasilia. Lula and the PT are not a Soviet-style “god that failed”. But many western leftists, myself included, vested great hopes in the PT’s ability to combine, in Sampaio’s words, “the building of popular movements with occupying spaces in the political system”.

This was seen as a strategy for socialist change more powerful than the failed parliamentarism of west European social democracy, yet also more legitimate and democratic than the Leninist tradition in the way it built on struggles for the franchise and other liberal political rights. The PT’s particular origins in mass movements resisting the military dictatorship of the 1960s, 1970s and early 1980s, along with strong traditions of popular education and self-organisation, produced something new. This rich popular history makes the failure of the Lula government more than just a repeat of the classic scenario of a social-democratic party that talks left in opposition and is pressured into compliance when gets to office.

The politics of participation

One illustration of the PT’s innovative politics is its relationship with the landless mass movement Movimiento sim Terra (MST) – whose members occupied the land of the rich latifúndios and then tried to use it for cooperative agriculture. The PT’s connection with the MST was one of mutual support that preserved the MST’s autonomy.

Another example of the PT’s operating method was its civic policy, especially participatory democracy and budgeting. When the party won mayoral elections in cities like Porto Alegre in Rio Grande do Sol, Rio Branco in the Amazon, Sao Paulo, Recife and (more recently) Fortaleza in the northeast, it sought (in the words of Celso Daniel, mayor of Santo André who was murdered in 2001 for trying to stop corruption) to “share power with the movements from whence we came”.

The PT did this by opening up the finances of the municipality to a transparent process of participatory decision-making through which local people had real power. A driving motive behind this experiment was to expose and eliminate corruption.

To assess whether the emphasis on participatory democracy had really been confined to the state of Rio Grande Do Sol, with its highly-developed civil society, I took a reality check by visiting Fortaleza – 4,000 kilometres from Porto Alegre. There, the radical PT member Luizianne Lins had won a contest in 2004 for mayor against the wishes of the leadership (José Dirceu had flown in from Sao Paulo to campaign against her).

I attended meetings of citizens deciding on their priorities for the city's plan to negotiate over them with Luizianne. The participation was evident and strong, and was pushing municipal policies in a more egalitarian direction. The co-ordinator of the local office for participatory democracy, Neiara De Morais, told me how they were developing the politics of participation: “popular participation is about more than the budget: we aim for it to run through every aspect of the municipality”.

There is a process of formacão (training) that explains the workings of the government machine, especially the finances and helping “people to become fully conscious of the process, improving, taking control over it”.

Fortaleza’s participatory administration had clearly taken the participatory process deeper than its original, renowned Porto Alegre home. The next stages of my trip were Sao Paulo and Rio de Janeiro, where dissident PT figures had long been sounding the alarm that the party leadership were bypassing this kind of grassroots radicalism.

I visited Chico de Oliveira, Marxist sociologist and a founder of the PT who comes (as does Lula) from Pernambuco. In an excoriating letter of resignation from the PT over the government’s economic policy, Oliveira had presented a comprehensive analysis of the deformities of Brazil’s political system: stressing the enormous powers of patronage it makes available (the president has 25,000 jobs in his gift; France under Francois Mitterrand had 150); criticising the electoral system, where the fact that candidates tend to stand as individuals makes for weak parties; and highlighting the clientilism and bribery encouraged as a normal way of passing measures through congress and through regional and municipal assemblies.

It was exactly this system that the participatory budget was fashioned to attack. The idea was that instead of bribery and patronage, the mayor or governor (and, it was imagined, eventually the president) would rely on a process of shared decision-making infused with institutions of popular participation; their legitimacy would in turn derive from processes of direct and delegate democracy that councillors and regional deputies would be unable to ignore because their voters were part of it.

A visit to Porto Alegre confirmed that this system worked. “We ruled for sixteen years without bribery”, said Uribitan de Souza, one of the architects of the participatory budget in Porto Alegre itself and for the state of Rio Grande Do Sul as a whole.

The essential principle guiding Uribitan, Olivio Dutra and the other pioneers of participatory budgeting was the recognition that electoral success does not on its own bring sufficient power even to initiate a process of social transformation but that an electoral victory can be used to activate a deeper popular power. Such an approach, even without immediately developing new institutions, would have led to the kind of mobilisation that petistas expected from Lula in dealing with the IMF and a hostile congress and Brazilian elite.

Indeed, one government insider told me that bankers expected it too and were reconciled to some tough bargaining. But from Lula’s 1994 election defeat (when many had been looking forward to a PT government) to the successful campaign of 2002, the leadership of the party was not in the hands of people with a deep commitment to participatory democracy.

The two scandals

Chico de Oliveira stresses the emergence of a group of trade-union leaders, including Lula, whose approach was essentially one of pragmatic negotiations. He argues that under the dictatorship in the 1980s, when the independent trade-union movement was highly political even where its activity was economic or sectional in intent, union leaders appeared radical and political as well as industrially militant. But as workers, in the car industry especially, faced rising unemployment and declining influence, their union leaders’ attitude turned to caution and pragmatism.

Another group in the post-1994 leadership – for example, ex-guerrilla José Genuino – had reacted to the fall of the Berlin wall by dropping any belief in radical change and adopting a variant of Tony Blair’s “third way”, or diluted social democracy. Meanwhile, there was José Dirceu, whose break from the Communist Party in the 1970s had been over the armed struggle, not its instrumental, ends-justify-means methodology.

Dirceu’s end in this case was shared by every petista: “Lula presidente”. For Dirceu, it was to be achieved by playing ruthlessly the existing rules of the game. For most petistas it was by also mobilising and educating the people to be ready to take actions themselves. But the difference in methodology was overwhelmed by the desire for a PT victory. People who tried openly to warn of corrupt deals with private companies, like César Benjamin, a leading official of the party until 1994, were rebuffed as disloyal.

“We believed too much in Lula”, confesses Orlando Fantasini, a deputy for Sao Paulo. A radical Catholic, Fantasini is part of a “Left Bloc” of around twenty deputies and a few senators that was quick to demand an investigation into the corruption revelations. Many of these are now likely to join other parties, most notably the PSOL, a party formed by PT deputies who split from the party over the pension reforms.

Throughout the 1990s, Lula personified petista hopes for social justice and popular democracy. If Dirceu and the increasingly tight cúpula demanded greater autonomy, or argued for a centralisation of the party at the expense of the local nuclei in the name of a Lula victory, their demand was granted. In election campaigns, political campaigning in marketplaces and street-corners gave way to marketing on the conventional model; activist campaigning gave way to paid leafleters.

At the same time, Lula was glad-handling the bosses of Globo, Brazil’s Rupert-Murdoch-like media monopoly, thinking he could get them on his side. The PT had established Brazil’s first mass political party according to its own ethics of popular democracy, but after the disappointment of 1994 – and even more so of 1998 – it accepted the rules of Brazil’s corrupt political system.

The PT’s reputation for democracy has been based partly on the rights of different political tendencies to representation at all levels of the party. But from the mid-1990s, according to César Benjamin and others, José Dirceu started to use the slush fund to strengthen the position of the Campo Majoritário (majority camp) to build a network of local leaders who depended on him. This, along with the autonomy demanded and granted for Lula’s group, meant that the PT’s democracy become ineffectual as the majority tendency monopolised central control and no other mechanisms of accountability were put in place.

As I listened to party activists and ex-activists at every level – from the organisers of Fortaleza’s newborn participatory democracy to a veteran leftist advising Lula in the Palàcio do Panalto – it became clear how interlinked the financial and political scandals are.

Hilary Wainwright is editor of Red Pepper. Her research in Brazil was funded by the New Politics Project of the Transnational Institute

The neo-liberalism of the government and the systematic corruption in the organisation of the party go hand in hand. The steady strangling of democracy from within meant that the party lost all autonomy from the government; and this in turn closed down all the mechanisms linking the party to the social movements and therefore acting as a political channel for their expectations, their pressure and their anger. Even Marco Aurelio Garcia, co-founder of the PT and Lula’s chief advisor on foreign affairs, feels he has no way of calling the economics minister Antonio Palocci to account.

What now?

Everyone recognises that the corruption that has inundated Brazil’s political system as a whole is a huge defeat for the PT in particular. “Our strategies have to be for the long term”, says José Correio Leite, from the now-divided left tendency Democratic Socialism (DS).

If the party’s presidential elections, whose second-round result is awaited, gives victory to the Campo Majoritário – and it is assumed that even now corruption is playing a part in its election campaign – Leite and most of those who have been supporting Plìnio de Arruda Sampaio will leave the party. Some will join the PSOL but all will work to create a widely-based “socialist movement” or some such framework that will not see electoral activity as its priority but rather will return to working with social movements.

“We must find a way of consolidating and developing the real PT traditions. We cannot let the cúpula destroy this”, says Luciano Brunét, who is supporting fellow Porto Alegren, Raul Pont, for in the election for party president on a platform of political reforms of the party and the state.

All agree that, as a group of Sampaio supporters puts it, “the situation is open – very open”. The group also stresses the importance of international discussions. Across the world, there is an experimental left refusing the idea that all that remains for the left is a kind of Blairism, or an abandonment of any engagement with electoral politics.

The disaster facing the PT requires not a turning away in search of a new political holy grail, but a deepening engagement with the political problems of Brazil and its Workers’ Party petistas and ex-petistas, in order to learn from their experience and together seek answers to questions that concern the left worldwide.

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