How Vale bought off Brazil’s political class

. Feb 01, 2019
How Vale bought off Brazil's political class

Besides the huge human loss — already 110 deaths and 238 missing —, the Brumadinho dam collapse sparked such outrage in Brazil because a similar incident happened just three years ago. And once again, the company responsible for the tragedy and environmental damage is Vale, one of Brazil’s largest companies, and the world’s largest iron ore and nickel producer. Why were no lessons were learned since 2015? Earlier this week, we showed that part of the problem is that it took less than a year for Vale to recover its value after Mariana, as investors are more worried about commodity prices than environmental catastrophes.

But a bigger part of the issue concerns how authorities didn’t hold Vale accountable for anything. Most fines imposed after the 2015 Mariana tragedy have yet to be paid. And the Minas Gerais State Congress struck down a bill that would have tightened regulations on mining activities. To find out why, it is helpful to take a look at Vale’s behavior in providing campaign donations.

</span></p> <p><span style="font-weight: 400;">Newspaper</span><i><span style="font-weight: 400;"> Estadão </span></i><span style="font-weight: 400;">gathered data from electoral courts which </span><a href=",com-r-82-milhoes-em-doacoes-eleitorais-vale-espalhou-influencia-em-25-estados-e-no-congresso,70002702885"><span style="font-weight: 400;">show</span></a><span style="font-weight: 400;"> that 257 politicians elected in 2014 — when company donations were still allowed — received financial backing from Vale. These officials were in office until January 31, 2019. When taking into account those who didn&#8217;t win seats, the numbers become even more impressive. What&#8217;s more, the three best-voted presidential candidates in 2014 all received money from the company. All in all, donations amounted to BRL 82.2 million.</span></p> <hr /> <p><img class="alignnone size-large wp-image-13735" src="" alt="vale campaign donations" width="1024" height="217" srcset=" 1024w, 300w, 768w, 610w, 1228w" sizes="(max-width: 1024px) 100vw, 1024px" /></p> <p><img class="alignnone size-large wp-image-13736" src="" alt="vale campaign donations" width="1024" height="324" srcset=" 1024w, 300w, 768w, 610w, 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></p> <hr /> <p><span style="font-weight: 400;">Only meatpacking group JBS threw comparable amounts of money at politicians. Considering JBS&#8217; reputation of relationships with political elites, it is not good company to be in. The company&#8217;s two top shareholders and its entire top level of executives admitted to years of bribing politicians in exchange of favors. Wesley and Joesley Batista, once known as &#8220;Brazil&#8217;s beef kings,&#8221; spent time in jail for failing to comply with their plea deal agreement to detail the ins and outs of corruption at the federal level. They are also investigated for insider trading, as they made foreign exchange operations just before the content of their testimony was leaked to the press and created havoc in the markets.</span></p> <h2>Where Vale donated the most</h2> <p><span style="font-weight: 400;">Not surprisingly, Vale donations are more voluminous in states with more mining reserves, such as Minas Gerais (18 percent of all political donations) and Pará (9 percent). Electoral data from 2014 also shows that the mining company has no ideology bias — helping candidates from the Communist Party of Brazil (PCdoB) and from the far-right Social Liberal Party (PSL). Candidates from 27 parties received some amount of money from mining companies.</span></p> <hr /> <p><span style="font-weight: 400;"><img class="alignnone size-large wp-image-13739" src="" alt="Vale" width="1024" height="333" srcset=" 1024w, 300w, 768w, 610w, 1156w" sizes="(max-width: 1024px) 100vw, 1024px" /><br /> </span></p> <hr /> <p><span style="font-weight: 400;">The rate of Vale-backed candidates among elected members of Congress is stunning. Two-thirds of members of Congress from Minas Gerais got money from the company. In Sergipe and Pará, half of the elected representatives were backed with Vale money. </span></p> <p><span style="font-weight: 400;">At the state level, the rate is similar. In June, a bill reinforcing controls on mining activities was voted down in a special committee by 3 votes to 1. Of the three lawmakers who were against stricter regulations, two had received money from Vale in 2014. “Money and influence are powerful instruments in policy making, even if legally accepted,” </span><a href=""><span style="font-weight: 400;">wrote</span></a><span style="font-weight: 400;"> Wagner Pralon, in a study published by Brazil’s Institute for Applied Economics.

The Brazilian Report

We are an in-depth content platform about Brazil, made by Brazilians and destined to foreign audiences.

Don`t copy text!