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The Rise and Fall of Zé Dirceu | The Big Payolas, Theirs and Ours

Zé Dirceu, firebrand, in the 1970s

Who is Zé Dirceu and what has he done?

Dirceu is the former presidential chief of staff who fell from grace in 2005 in the wake of a major campaign finance and bribery case. More importantly, perhaps, he is a former guerrilla who was exchanged for the kidnapped U.S. ambassador in 1969 — the sort of person that Uncle Sam tends to carry a torch for down the intervening decades.

Perhaps that is why the State Department’s 2005 coverage of the «big monthly allowance» scandal involving Dirceu — currently on trial before the Brazilian Supreme Court — suffers from a lack of follow-up, according to my own search of  Cablegate’s Brazil files.

U.S. diplomats in country issued 24 weekly updates on the «monthly allowance» scandal between July 22, 2005 and August 31, 2007. As far as I can tell, however, it never reported on the so-called «big monthlies» of the PSDB and DEM.

Not once.  It is one thing for the mainstream media to minimize this aspect of the case, but quite another for the embassy to assume that readers and viewers will not get wind of it and shape their perceptions accordingly.

As Jânio de Freitas of the Folha de S. Paulo continues to insist:

It is time to update the catchphrase — the «big payola» — so as not to obscure its real meaning: the application of a double standard to two identical cases. (August 5, 2012)

«Payola» is the embassy’s translation — I like it, it makes sense.

What Jânio is referring to is the fact that the scheme to skim, launder and distribute public and private funds to politicians and parties seems to have first appeared in the late 1990s, when it fed the political campaigns of the opposition PSDB that year.

The very same ad executive — Marcos Valério de Souza, of the DNA and SMP&B ad agencies  — coordinated both schemes, which involved the national president of the PSDB and former Minas governor Eduardo Azevedo.

It is as though the same gypsy cabbie, charged with pimping and pandering, ferried two johns — Elliot Spitzer and the fictional Peter Florick? — to the same brothel.

That is why I maintain that the proper name for the scandal is the valerioduto: Marcos Valério’s cash pipeline. The charges in both cases make fascinating case studies of money laundering best practices — one source of siphoned funds was the Rock in Rio event, allegedly. Which is sad. One day I want to write a money-laundering potboiler, so I keep clippings on such cases.

For these reasons it remains to be seen whether guilty verdicts in the portion of the case involving the PT will create jurisprudence for other, similar or identical, schemes.

The concepts of due process and evidentiary standards are a bit different than what one learns from decades of Law and Order reruns, but the tendency is to shoot down the defense that the payments went to pay off campaign debt — a lesser crime whose statute of limitations has run. The minister in charge of the case points to a timeline suggesting a correlation between cash payoffs and the current business of the federal legislature at the time.

Cable Reference ID: #05BRASILIA3150


Dirceu’s fall is a watershed. Beyond the specific charges in the report on which Dirceu’s impeachment was founded, there has been an ongoing and powerful suspicion here that Dirceu’s guilt is broader, that he was in fact the mastermind, or at the very least a knowledgeable and complicit observer, in the PT’s network of illicit financial activities, both in government and in the years leading up to Lula’s victory, when proceeds from kickbacks from PT-led municipalities apparently flowed into party war chests, fueling campaigns and embroiling some PT mayors in nefarious circumstances that literally led to murder in the cases of Santo Andre and Campinas, and that continue to haunt Palocci.

We have tended to share that view of Dirceu’s probable culpability. Dirceu was, for years, the single most powerful figure within the PT as the party’s president, he crafted the campaign image-remake of Lula that led to his presidential victory, and he was the most important cabinet minister in the early years of the administration.

It strains credulity that he would not have been involved in the large-scale, illicit financial machinations that are at the core of the current scandals. In our assessment, it fits with Dirceu’s personal history of devotion to both the PT and his own ambition — a history that includes exile, training in Cuba as a guerrilla, and years of clandestine life under assumed names in Brazil — that he would view dubious means as justified by his ends. Indeed, the schemes of which he now stands accused were set in play to win and consolidate political power for the PT, rather than fuel graft in a traditional sense.

Would? Might? Counterfactual conditionals — a fancy term for wishful thinking — are the first refuge of a lazy mind.


I tend to agree with fellow blogger Stanley Burburinho — author of the presentation above — that the substance of Dirceu’s ordeal has more to do with political pragmatism than with fabianist strategies and trotskyite ideals.

Referring to the “screwing” of Dirceu, Burburinho alludes to the eruption of the scandal in a video secretly recorded by the righthand man and black-bag operator of numbers racketeer Charley Waterfall, allied with federal senator Demostenhes Torres.

Torres fell hard from grace — he was removed from his senate seat — and the Waterfall case — involving prominent opposition figures — continues to compete for headlines with the «big payola».

The parliamentary commission of inquiry into Waterfall has closed shop until the end of the election season in October, however. Publishing house Abril has worked hard behind the scenes to quash a proposed subpoena of one of Veja’s senior editors, who appears in police wiretaps coordinating scandalmongering coverage with Waterfall and his merry men.

BNDES is the state-owned development bank, which indeed cut off the supply of credit to major media groups under Lula I — «not one dime for debt repayment».

It is very common to read that pro-situation alt.media suckles from the federal teat, with government advertising subsidizing operations. But this dog won’t hunt.