As U.S. election goes to the wire, Bolsonaro stays faithful to Trump

. Nov 04, 2020
As U.S. election goes to the wire, Bolsonaro stays faithful to Trump U.S. President Donald Trump with Brazilian counterpart Jair Bolsonaro during a March dinner in Florida. Photo: Alan Santos/PR

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Today, how Brazil will position itself amid a contested U.S. election. Flawed employment data could mask the extent of the coronavirus crisis. And the president’s son faces money laundering charges. 

Bolsonaro pledges ‘loyalty’ to Trump amid contested U.S. election

The U.S. presidential election remains too close to call — and could remain so for days, as vote counting continues in key battleground states. Prior to the first results, Brazilian President Jair Bolsonaro had told

aides that it is politically important for his administration to show &#8220;loyalty&#8221; to President Donald Trump over former Vice President Joe Biden.</p> <ul><li>Mr. Bolsonaro is acting against all advice. His allies have tried to convince him to follow the diplomatic tradition of not endorsing a candidate —&nbsp;especially in such a tight race that could end in court.</li></ul> <p><strong>Why it matters.</strong> Brazilian officials in the U.S. are trying to build bridges with both candidates. But, as senior government officials, friends of the Bolsonaro family, and diplomats have told Brasília correspondent Débora Álvares, the president&#8217;s personality is &#8220;uncontrollable&#8221; and &#8220;unpredictable.&#8221;&nbsp;</p> <ul><li>These officials fear that, should Mr. Biden win, Jair Bolsonaro could treat the U.S. like <a href="https://brazilian.report/newsletters/brazil-daily/2020/10/20/brazil-strengthens-ties-with-trump-and-shuns-china/">he treats China</a>. Which could put Brazil at odds with its two biggest trading partners.</li><li>A telling sign is that the Brazilian government still doesn&#8217;t know how (and if) the president would congratulate Joe Biden in the case of victory. &#8220;It could even be through a post on social media,&#8221; joked one source when speaking to <strong>The Brazilian Report</strong>.</li></ul> <p><strong>Conspiracy theories. </strong>Mr. Bolsonaro used his <a href="https://www.facebook.com/jairmessias.bolsonaro/posts/2166415700174071">Facebook page</a> to discuss concerns around &#8220;foreign influence&#8221; trying to tilt the U.S. election in Mr. Biden&#8217;s favor. He added that these unidentified foreign forces could try to tamper with Brazil&#8217;s 2022 election, due to the country&#8217;s &#8220;agricultural potential.&#8221;</p> <ul><li>In the early hours of the day, Mr. Trump falsely and prematurely claimed victory —&nbsp;declaring he would go to the Supreme Court to halt vote counting in key states. That move shouldn&#8217;t come as a surprise, as the U.S. president has laid the groundwork to contest an adverse outcome over the last few months.</li><li>Mr. Bolsonaro could be taking a page out of Mr. Trump&#8217;s playbook two years in advance — blaming &#8220;foreign forces&#8221; for any result that is not his re-election. Even before taking office as president, Mr. Bolsonaro had tried to cast doubt over Brazil&#8217;s electoral system, without any proof of its vulnerability.&nbsp;&nbsp;</li></ul> <p><strong>Pragmatism from VP.</strong> Meanwhile, Vice President Hamilton Mourão has tried to bring some sobriety to the issue, saying bilateral relations between Brazil and the U.S. would stay &#8220;the same&#8221; no matter the outcome of the U.S. election. Even so, the VP took a dig at Mr. Biden for his criticism of Brazilian environmental policy, saying he should <a href="https://noticias.uol.com.br/politica/ultimas-noticias/2020/11/03/mourao-responde-a-cobrancas-de-joe-biden-sobre-amazonia-e-cutuca-eua.htm?utm_campaign=resumo-do-dia-edicao-da-noite&amp;utm_content=hyperlink-texto&amp;utm_medium=email&amp;utm_source=newsletter">first reduce U.S. carbon emissions</a> before lecturing Brazil.</p> <ul><li>Mr. Mourão travels to the Amazon today with a group of foreign ambassadors. The visit aims at improving Brazil&#8217;s international image — tarnished by record levels of wildfires in the rainforest and Pantanal wetlands.</li></ul> <hr class="wp-block-separator"/> <h2>Employment data &#8220;makes no sense,&#8221; say experts</h2> <p>Economists have cast doubts over the reliability of the Economy Ministry&#8217;s General Register of Employed and Unemployed Persons (Caged). The numbers show a 55-percent increase in the number of formally employed teenagers, and a 5-percent bump among workers aged 18 to 24.</p> <p><strong>What they are saying.</strong> According to experts, the numbers make no sense. Brazil is experiencing <a href="https://brazilian.report/business/2020/10/23/brazil-unemployment-hits-new-records-but-worse-is-yet-to-come/">record-high unemployment rates</a> and a massive recession is on the horizon. They say this indicates the inconsistencies of Caged data.</p> <ul><li>Caged is the leading survey of formal employment in Brazil. However, it depends entirely on information provided by companies —&nbsp;and government controls on reporting have grown increasingly lax. Data suggests that a large number of firings have gone completely under the radar, as many companies have simply failed to submit employment figures.</li></ul> <p><strong>Why it matters.</strong> Data inconsistency could mask the effects of the pandemic, and lead public officials to underestimate the need for more government aid for both businesses and citizens.&nbsp;</p> <ul><li>The coronavirus emergency salary is set to expire after December, and no replacement program has been designed. Rosy figures could be used to justify stopping such policies.</li></ul> <hr class="wp-block-separator"/> <h2>President&#8217;s son indicted for money laundering scheme</h2> <p>Prosecutors in Rio de Janeiro indicted Senator Flávio Bolsonaro — the president&#8217;s eldest son — for running a corruption scheme during his years as a state lawmaker that involved garnishing the wages of his staffers. Mr. Bolsonaro will face charges of money laundering, malfeasance, and criminal association. His former aide Fabrício Queiroz — a longtime friend of the president&#8217;s and a fixer for the Bolsonaro family&nbsp;— was also indicted, as well as another 15 people.</p> <p><strong>Why it matters.</strong> This case could spell trouble for President Jair Bolsonaro, as at least 21 checks <a href="https://brazilian.report/power/2020/08/12/corruption-case-against-jair-bolsonaro-son-fabricio-queiroz/">link First Lady Michelle Bolsonaro to the scheme</a>.</p> <p><strong>How the scheme worked.</strong> The salary-skimming scheme of which Flávio Bolsonaro is accused of running is a rather common (albeit illegal) practice among politicians. His staffers were forced to surrender part of their salaries to the politician — a process which was allegedly <a href="https://brazilian.report/power/2019/01/18/flavio-bolsonaro-scandal-president/">handled by Mr. Queiroz</a>.</p> <ul><li>In 2018, Brazil’s money laundering enforcement agency found that Fabrício Queiroz made “atypical transactions” in 2016 totaling BRL 1.2 million (USD 230,000). These transactions were made through cash deposits and withdrawals — customary when the intent is to conceal the source and recipient of the funds.</li><li>Monthly deposits made into the bank account of Mr. Queiroz coincide with the paydays of public servants at the Rio de Janeiro legislative assembly. The former driver made a total of 176 cash withdrawals from his bank account in 2016.</li></ul> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <ul><li><strong>Central Bank. </strong>In a 56-12 vote, senators passed a bill granting <a href="https://brazilian.report/newsletters/brazil-daily/2020/02/19/central-bank-brazil-shielded-political-interference/">institutional autonomy to the Brazilian Central Bank</a>. Aiming at diminishing the influence of electoral politics on monetary policy decisions, it establishes four-year terms for the bank&#8217;s board of directors — with the right to one four-year extension — which do not coincide with presidential terms. The bill now goes to the House — where a similar bill is already processing.</li><li><strong>Tax cuts.</strong> Congress is expected to strike down a presidential veto today preventing payroll tax cuts to 17 industrial sectors until 2021. If the veto holds, the tax benefit would end at the turn of the year — but lawmakers believe the move is necessary to avoid even more layoffs in the country.</li><li><strong>Tech.</strong> The Central Bank&#8217;s new <a href="https://brazilian.report/business/2020/08/13/will-2020-see-overhaul-payments-market-brazil/">instant payments system</a>, PIX, went live on Tuesday. During its first day of operations, PIX registered almost 1,600 transactions, at an average amount of BRL 90 (USD 15) and maximum value of BRL 35,000. Until November 16, PIX will operate in a trial mode, and only then will it be available to consumers and merchants on a 24-hour basis. </li><li><strong>Environment.</strong> An appellate court has decided against ending a malfeasance lawsuit against Ricardo Salles, Brazil&#8217;s embattled Environment Minister. He is accused by federal prosecutors of &#8220;<a href="https://brazilian.report/environment/2020/05/28/environment-minister-really-running-cattle-herd-through-amazon/">deliberately dismantling Brazil&#8217;s environmental controls</a>.&#8221; The court, however, has not yet ruled on the prosecutor&#8217;s request for suspending Mr. Salles from office — which will come at a later stage of the case.</li><li><strong>Coronavirus.</strong> Brazil has confirmed 5.56 million <a href="https://brazilian.report/coronavirus-brazil-live-blog/">Covid-19</a> infections and 160,500 deaths, according to the latest federal update. The 7-day rolling average for new daily cases is at its lowest point since late in May — while the average for new daily deaths is at late April levels. In five states, however, cases have shown an upward trend — which authorities <a href="https://www1.folha.uol.com.br/colunas/painel/2020/10/pelo-menos-cinco-estados-relacionam-mais-casos-de-covid-19-com-campanha-eleitoral.shtml">link</a> to political rallies leading up to the November 15 municipal election.</li><li><strong>Cabinet.</strong> Health Minister Eduardo Pazuello was released from the hospital on Tuesday, where he spent two days treating complications due to a coronavirus infection. The government says Mr. Pazuello will continue being monitored by doctors at home — and awaits the result of a new Covid-19 test. There is still no fixed date for his return to work.

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