High-profile cases on the Supreme Court docket

. Aug 03, 2020
High-profile cases on the Supreme Court docket Brazil's Supreme Court building. Photo: Diego Grandi/Shutterstock

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This week, we’re covering the eventful return from vacation of Brazil’s Supreme Court. And the worst month of the year for politicians is just starting.

Brazilian courts back from vacation with explosive cases ahead

The Brazilian Justice system resumes its activities today, as its July recess comes to an end. And many high-profile cases will now be heard before the Supreme Court and the Superior Court of Justice — Brazil’s two highest judicial bodies.

</p> <p><strong>Why it matters.</strong> Upcoming trials have the potential to trigger several crises for the government, directly concerning President Jair Bolsonaro, his family, and his allies. Here are some of the cases:</p> <ul><li><strong>Meddling with the Feds.</strong> The investigation into whether Mr. Bolsonaro illegally tried to tamper with federal probes continues — and the Supreme Court will rule on whether or not he must testify. That could spark a new rift between the Executive and Judiciary branches —&nbsp;a rocky relationship that had calmed in recent weeks.</li><li><strong>Fake news.</strong> The probe on the use of illegal underground fake news rings continues at full throttle (more below), and investigators are zeroing in on the president&#8217;s inner circle.</li><li><strong>Money laundering.</strong> The Superior Court of Justice will decide on whether or not Fabrício Queiroz — a key figure in a money-laundering investigation against Senator Flávio Bolsonaro —&nbsp;shall return to prison or remain on house arrest. The case&#8217;s rapporteur has denied 97 percent of habeas corpus requests. Plus, the Supreme Court will decide if the president&#8217;s son can enjoy legal prerogatives given to elected officials in special circumstances, or if the case should go to lower courts.</li><li><strong>Car Wash.</strong> The Supreme Court will decide on the disqualification of Sergio Moro in the Operation Car Wash cases he judged. After it was revealed that the former judge quarterbacked prosecutors — which he must not do — former President Luiz Inácio Lula da Silva asked that his corruption convictions be voided, as Mr. Moro was the presiding judge on his case.</li></ul> <p><strong>Changes ahead. </strong>In September, the Supreme Court will have a new chief justice, Luiz Fux. The change is part of the court&#8217;s rotation system, and happens every two years. Mr. Fux is expected to be much less friendly to Mr. Bolsonaro than the incumbent Dias Toffoli has been. Moreover, while Justice Toffoli is considered an anti-Car Wash judge, Justice Fux is the opposite.</p> <ul><li>On November 1, Justice Celso de Mello will turn 75 and thus reach compulsory retirement. He will be replaced by a justice chosen by President Bolsonaro.</li></ul> <hr class="wp-block-separator"/> <h2>A &#8220;mad-dog&#8221; month for a mad-dog year commences</h2> <p>According to the folklore of Brazilian politics, August is a particularly dreadful month. It is nicknamed the “Month of the Mad Dog” because, apparently, Brazil’s climate in the middle of the year causes female dogs to be in heat, thus driving male dogs crazy. While there are many modern examples of political turbulence in the month, the &#8216;curse&#8217; is believed to date back to colonial times. August was traditionally the month where 15th and 16th century explorers would leave European shores to find new lands abroad, risky endeavors that many never returned from.</p> <p><strong>Why it matters.</strong> In Brazilian politics, the Month of the Mad Dog has thrown up a surprising number of twists and turns for decades now. And it&#8217;s not like 2020 hasn&#8217;t hit Brazil and the world hard enough in its first seven months.</p> <p><strong>History.</strong> Call it a coincidence, but August does have a bad track record:</p> <ul><li><strong>1954.</strong> On August 24, under pressure to resign and fearing a coup d&#8217;état, then-President Getulio Vargas killed himself in the presidential palace with a gunshot to his chest.</li><li><strong>1961.</strong> On August 25, Jânio Quadros decided to resign from the presidency after just a few months in office —&nbsp;a failed self-coup. Mr. Quadros hoped that Congress and voters would not let him step down, and give him extra powers to govern. It didn&#8217;t work and sparked an institutional crisis that culminated in the 1964 military coup.</li><li><strong>1969.</strong> Field Marshal Artur da Costa e Silva, the second president of the dictatorship, became incapacitated by a stroke on August 31. The Armed Forces&#8217; so-called &#8220;hard-line&#8221; prevented civilian Vice President Pedro Aleixo from taking office, giving power to a junta of the heads of the three military forces instead. Four months later, the government passes the infamous AI-5 — the harshest piece of legislation of the dictatorship period, inaugurating Brazil&#8217;s so-called &#8220;Years of Lead.&#8221;</li><li><strong>1976.</strong> Juscelino Kubistchek, the former president known for having created the capital city Brasília, died in a August 22 car crash. Many believe he was in fact assassinated by the military government, after two other high-profile opponents of the regime died in suspicious circumstances that same year.</li><li><strong>1992.</strong> Cornered by scandals, Fernando Collor — the first democratically elected president after the dictatorship — asked voters to take to the streets on August 16, wearing yellow and green in support of him. They wore black instead, demanding his ousting and triggering an impeachment process.</li><li><strong>2014.</strong> Presidential candidate Eduardo Campos died in an August 13 plane crash.</li><li><strong>2016.</strong> After being suspended from office by the House in May, Dilma Rousseff was finally removed by the Senate early on August 31. The entire process was a highly controversial, divisive affair, with Brazilians split between those who said Ms. Rousseff’s strategy to mask public deficits just before her re-election campaign was undemocratic (which it was), and those saying that Congress removed her on jumped-up charges as a pretext to install a right-wing coalition in power (which also was true).</li></ul> <p><strong>Bolsonaro.</strong> In his first August as president, Jair Bolsonaro faced a global image crisis sparked by the increase in Amazon fires. However, he made it to September reasonably unscathed. Now, with the end of the government&#8217;s coronavirus emergency salary looming, will he be able to do that again?</p> <hr class="wp-block-separator"/> <h2>Markets</h2> <p>IRB Brasil RE, Latin America&#8217;s biggest reinsurance group, has informed markets of the postponement of its Q2 earnings report, from August 14 to 28. The company has had a terrible 2020, with <a href="https://brazilian.report/business/2020/03/06/stocks-lies-scandal-warren-buffet-irb-brasil/">accusations of doctoring profitability reports</a> and lying to the market — which led to comparisons with the 1990s Enron scandal —&nbsp;and a 92-percent drop in net profits in Q1 2020. Since the beginning of the year, IRB Brasil RE&#8217;s stock dropped 78 percent.</p> <hr class="wp-block-separator"/> <h2>The coronavirus becomes more lethal in Brazil</h2> <p>According to the Health Ministry’s official figures, July was the deadliest month since the coronavirus arrived in Brazil, late in February. At least 32,912 Brazilians died last month, taking the total tally to over 94,000. However, due to underreporting, the real figures are probably much higher. Still, coronavirus deaths in Brazil over the last month alone outnumbered the entire death tolls for several countries that have been badly hit by the pandemic, such as France (30,135), Spain (28,445), or Russia (14,128). Experts say only <a href="https://brazilian.report/society/2020/07/13/four-months-brazil-coronavirus-data-explain-outbreak/">mass testing</a> will reduce death rates in Brazil.</p> <div class="flourish-embed flourish-chart" data-src="visualisation/3363134" data-url="https://flo.uri.sh/visualisation/3363134/embed"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <hr class="wp-block-separator"/> <h2>Looking ahead</h2> <ul><li><strong>Taxes.</strong> President Jair Bolsonaro said on Sunday that he has authorized Economy Minister Paulo Guedes to go ahead with his proposal to create a <a href="https://brazilian.report/business/2019/09/11/cpmf-economy-ministry-central-bank-new-tax/">new tax on financial transactions</a> — something the president has spoken out against several times in the past. Mr. Bolsonaro added that the new levy would have to replace a tax that is already in place — most likely payroll tax — but the idea is not popular among members of Congress … and even less so among voters.</li><li><strong>Interest rates. </strong>The Central Bank&#8217;s Monetary Policy Committee will establish Brazil&#8217;s new benchmark interest rate on Wednesday. Due to a lower-than-expected inflation rate, analysts expect yet another cut — from 2.25 to just 2 percent a year, which would be another <a href="https://brazilian.report/coronavirus-brazil-live-blog/2020/06/17/brazilian-central-bank-slashes-interest-rate-eyeing-recovery/">all-time low</a>. Markets will be holding out for the meeting&#8217;s minutes to be published, which will indicate if more cuts are on the horizon.</li><li><strong>Telecoms.</strong> Oi Telecom&#8217;s agreement for exclusive talks with Highline over the <a href="https://brazilian.report/tech/2020/07/31/will-covid-19-consolidate-brazil-shift-e-government/">sale of the former&#8217;s mobile telephony infrastructure</a> expires today. The latter — controlled by global investment fund Digital Colony — must top the BRL 16.5-billion bid made by a consortium of the top three telecom companies in Brazil —&nbsp;Vivo, TIM, and Claro. Highline, however, isn&#8217;t inclined to do so and is expected to drop out of the bidding.</li><li><strong>Trade. </strong>Members of the U.S. House Foreign Affairs Committee will investigate allegations that the country&#8217;s ambassador to Brasília, Todd Chapman, is framing trade policies with Brazil in a partisan manner in order to help Donald Trump&#8217;s re-election campaign. Mr. Chapman is lobbying for Brazil to lift tariffs on U.S. ethanol, reportedly arguing that it would give Mr. Trump an important trade win, which would bode well with voters. Per a media <a href="https://blogs.oglobo.globo.com/lauro-jardim/post/embaixador-dos-eua-faz-lobby-no-governo-por-etanol-americano.html">report</a>, Mr. Chapman &#8220;highlighted the <a href="https://brazilian.report/podcast/2020/07/22/biden-trump-what-changes-brazil-latin-america/">importance of Mr. Trump&#8217;s re-election for the Jair Bolsonaro administration</a>.&#8221; Last week, the ambassador <a href="https://brazilian.report/newsletters/brazil-daily/2020/07/30/5g-united-states-big-stick-diplomacy-brazil-ban-huawei/">warned that if Brazil doesn&#8217;t ban China&#8217;s Huawei from its 5G grid</a>, it would face &#8220;consequences.&#8221; These pressures come as a Gallup study shows that <a href="https://brazilian.report/newsletters/brazil-daily/2020/07/28/us-image-problem-latin-america-environment-infrastructure/">approval of U.S. leadership in Latin America</a> is on par with sentiment in favor of Germany, China, and Russia.</li></ul> <hr class="wp-block-separator"/> <h2>In case you missed it</h2> <ul><li><strong>Social media. </strong>Facebook said on Saturday it has enforced a worldwide block on certain accounts connected to President Jair Bolsonaro staffers — flagged by the Supreme Court as illegal spreaders of false information with political purposes. On Friday, Justice Alexandre de Moraes penalized the social media company after it only blocked the accounts for IP addresses located in Brazil, dishing out a BRL 1.92 million (USD 367,000) fine. Facebook said it will appeal the decision, which, in its opinion, goes outside of &#8220;the limits of [Brazilian courts&#8217; jurisdiction].&#8221; Freedom of speech advocates warn that the court&#8217;s crackdown on &#8216;fake news&#8217; opens a <a href="https://brazilian.report/power/2020/07/28/fake-news-crackdown-opens-dangerous-precedent-for-censorship/">dangerous precedent for censorship of unwanted content</a>.</li><li><strong>Energy.</strong> On Saturday, state-owned power company Eletrobras announced plans to invest BRL 6 billion per year until 2035 to expand its electricity generation and transmission. That amount could double if the government is successful in privatizing Eletrobras, reported the company, in a securities filing.</li><li><strong>Infrastructure.</strong> Privatizing Eletrobras will be hard, however. In 2020, of the government&#8217;s 16 priority infrastructure projects, only one passed in Congress: the new legal framework for basic sanitation. The rest stalled, in part because of emergency votes on coronavirus-related matters, but also because Congress&#8217; new remote work routine has halted progress of issue-based committees.</li><li><strong>Banking.</strong> André Brandão, head of global banking and markets for the Americas at HSBC in the country, has reportedly accepted an invitation to become the new chief executive officer at state-controlled lender Banco do Brasil. Incumbent Rubem Novaes announced his resignation a week and a half ago.</li><li><strong>Aviation. </strong>Latam Airlines, the top aviation group in Latin America, announced it will fire &#8220;at least&#8221; 2,700 workers in a statement — and opened a voluntary redundancy program on Friday. With 43,000 employees worldwide, Latam has filed for Chapter 11 bankruptcy protection in the U.S., and hopes to restructure USD 18 billion in debt. The aviation industry has been ravaged by the coronavirus — which makes the announcement of a new airline in Brazil, Nella, owned by a Panama-based group, all the more puzzling. Reporter Renato Alves <a href="https://brazilian.report/business/2020/07/19/amid-pandemic-mysterious-airline-set-to-launch-in-brazil/">told that story</a>.</li><li><strong>Spying.</strong> Justice Minister André Mendonça has faced heat after a report revealed that his department created a secret dossier with information about almost 600 civil servants and law enforcement agents monitored for being self-declared &#8220;anti-fascists.&#8221; Days later, a <a href="https://brazilian.report/power/2020/08/01/is-bolsonaro-launching-his-own-private-intelligence-agency/">presidential decree enhanced the powers of the Brazilian Intelligence Agency</a> (Abin).

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