Joel Velasco analyzes the complicated political landscape in Brazil

Brazilian Ethics Committee Votes to Expel Eduardo Cunha from House      

By: Paulo Trevisani

June 15, 2016

BRASÍLIA—A congressional ethics panel on Tuesday voted to oust suspended House Speaker Eduardo Cunha from the Chamber of Deputies, setting the stage for the possible dismissal of the architect of the impeachment effort against former President Dilma Rousseff.

The committee voted 11 to 9 to recommend that Mr. Cunha be expelled from the lower house on grounds that he lied to his peers about having money hidden overseas. The issue will now go to a full chamber vote, likely in the next few days. If a majority of the chamber’s 513 representatives uphold the decision, as many observers expect, Mr. Cunha would be removed from Congress.

Mr. Cunha has denied any wrongdoing.

An avowed political enemy of Ms. Rousseff, Mr. Cunha spearheaded impeachment efforts that forced her from office to stand trial in the Senate. But Mr. Cunha’s own legal woes have raised concern about the legitimacy of the impeachment proceedings.

The corruption and money-laundering charges brought against Mr. Cunha have weakened his influence. He is accused of pocketing millions in funds diverted from state oil company Petróleo Brasileiro SA PBR 2.02 % or Petrobras, in the country’s largest-ever corruption scandal.

Last week, his wife, Cláudia Cruz, was indicted in connection with the same probe. Prosecutors alleged she used the money stolen from Petrobras to fund shopping sprees. She has denied wrongdoing.

In a separate development, a lower court in the Southern state of Paraná froze Mr. Cunha’s and Ms. Cruz’s assets on Tuesday. In a statement, Mr. Cunha said he would appeal.

If Mr. Cunha is booted from Brazil’s legislature, he would lose special legal protections granted to sitting politicians, raising the likelihood that he could be sent to prison if he were convicted on the money-laundering and other charges. He could also be banned from running for office for up to eight years, a congressional official said.

Still, few believe Mr. Cunha, a skilled and savvy politician, is out of the game. Although the Supreme Court suspended Mr. Cunha from his powerful speaker’s post in May for allegedly trying to obstruct the embezzlement case against him, he has continued to direct legislative action behind the scenes, according to several politicians and observers. Mr. Cunha denies he obstructed justice.

“[Mr.] Cunha will remain influential,” said Ricardo Caldas, a political consultant in Brasília.

Mr. Caldas said lawmakers would likely uphold the committee’s vote to strip Mr. Cunha of his seat, since opinion polls show massive public support for his ousting. But Mr. Caldas said many lawmakers may continue voting under his instructions as Brazil gears up for key municipal elections around the country in October and general elections in 2018, thanks to a well-knit network of reciprocal favors.

“If you want to elect a mayor this year or get re-elected in 2018, you’ll need to be loyal to him,” Mr. Caldas said.

Mr. Cunha’s potential exit could make it harder for interim President Michel Temer to win congressional approval for an agenda of economic reform that includes spending limits and pension reform, both themes unpalatable for lawmakers. Both men are members of the Brazilian Democratic Movement Party, and Mr. Cunha’s iron control of the lower house was seen as critical to helping his colleague succeed.

But publicly supporting Mr. Cunha could be politically dangerous. In a poll conducted by Datafolha in April, 77% of respondents said they favored his ouster from Congress.

“It is possible that some quarters of the Temer administration still have some sympathy” for Mr. Cunha, said André César, a political consultant in Brasília. “But nobody is coming out supporting him. The political cost is getting too high,” he said.

As house speaker, Mr. Cunha was the gatekeeper who in December decided to launch the impeachment process against Ms. Rousseff. Under his watch, 367 representatives voted to send her for trial, which in turn forced her out of office. A final vote in the Senate is expected by August. Ms. Rousseff is accused of manipulating public accounts to mask a growing deficit, allegations she denies.

Her supporters in Congress have alleged that Mr. Temer’s administration fears crossing Mr. Cunha because the former speaker could implicate other lawmakers in the Petrobras corruption probe.

But even that possible risk wouldn’t be worth taking at this point, said Joel Velasco, an analyst of Brazilian politics at the Albright Stonebridge Group in Washington, D.C.

“At the end of the day, it is best [for the administration] to get somebody so unpopular removed,” Mr. Velasco said. “It’s for the nation’s good.”

The political turmoil has weighed on Brazil’s economy. Gross domestic product contracted 3.8% last year and is forecast to shrink by as much again this year. Inflation is near double digits even with the benchmark interest rate at 14.25%. Millions have lost their jobs over the past year, and public debt is ballooning.

Click here for link to article.