Corruption, intrigue and Gisele Bundchen

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Top News: The Brazilian Senate is in full-blown crisis these days. A controversy over 600-plus undisclosed (or “secret”) acts over recent years has centered on the upper house’s president, 79-year-old Jose Sarney.

Several of Sarney’s relatives were given jobs in the government through these secret acts.Voices within and outside the Senate have called on him to either resign or take a temporary leave while things are sorted out, although the Lula administration appears to be supporting him. Most recently, it was discovered that his grandson, Jose Andriano Cardeiro Sarney, also benefited by serving as an intermediary for loans offered to Senate employees.Here’s one extended list (in Portuguese) of the elder Sarney’s accused wrongdoings.

But it was not just Sarney involved in the secret acts. About half of the senators have been implicated, according to one report. And many Senate employees saw their salaries zoom past the cap for civil servants because of the acts. That list allegedly includes the former director of the Senate, Agaciel Maia, probably the official second-most-accused of wrongdoing after Sarney.

Sarney has come up with various denials and excuses. The one that got the most attention was when he and Lula both said that because of Sarney’s record of public service, he should not be judged as a common man. Both were thoroughly mocked.Folha columnist Clovis Rossi, a respected, usually restrained voice, was beside himself: “What kind of nonsense is this, my God in heaven!” he wrote [subscription required]. The headline on the cover of Veja, Brazil’s most-read news magazine, quoted the Constitution: “We the common people, remind the feudal masters in Brasilia that ‘All are equal under the law, without distinction of any kind.’”

Most recently, Folha reported that members of Sarney’s family have asked him to step away from the presidency. The press has been all over Sarney and other senators and employees, which makes you wonder: How many cans of worms are waiting to be uncovered in the lower house?

As protestors took to the streets in Iran after the controversial reelection of Mahmoud Ahmadinejad, Lula seemed to flub a little bit when he said the election appeared to have been fair and the Iranian protests were the result of sour grapes. His explanation: “You have an election in which a citizen has 62 percent of the votes. In other words, it’s very difficult for someone with 62 percent of the votes — here in Brazil we are used to electoral fraud when the difference is 1 percent or 0.5 percent. But when there’s a difference of 62 percent to 30-something, it is not possible. It’s very difficult.” It becomes clearer every day that Lula’s greatest political advantage on the world stage is that he does not speak English, because this kind of YouTube-able sound bite would do great damage to his reputation.

Money: There was good and bad news in economic reports issued over the last two weeks.Formal employment is up 131,500 jobs in May, the government reported. That was the fourth straight month of net gains, although there are still fewer employed than at start of crisis.

The dollar broke the two-real exchange rate for the first time in months, but the government still continues to worry that increased interest by foreign investors in Brazilian markets will continue to keep the real stronger than they would like. Exports have been hurting.But oddly, imports are also hurting in most categories, except for non-durable consumer goods, which saw imports rise 8 percent from January to May. In another piece of negative financial news, personal defaults (including bounced checks and individual loans) went up to 8.6 percent in May 2009.

The government has extended the tax holiday on cars and some other items, and has added more goods to the list. For cars, the reduced “IPI”, or Tax on Industrial Products, will continue through September, then slowly edge go back to normal by the end of the year. Trucks, construction materials and other items will maintain their current tax exemptions until the year’s end. And many capital goods like industrial valves have had their IPI removed until Dec. 31.

Elsewhere: The semi-annual Sao Paulo Fashion Week started with a flurry of stories about the quota that would require 10 percent of models to be black, Afro-descendents (a term common here) or indigenous. But then fashion week went on as usual, with most designers adhering to the quotas of darker skinned models, including the rising star Gracie Carvalho, but most attention still focused on the usual suspects, like Gisele Bundchen, (who said in an interview, by the way, that she favored the quotas).

There were more twists and turns in the Sean Goldman custody/kidnapping case. The child’s stepfather and maternal grandmother flew to New York to appear on CBS’s Early Show, and there were several more court reversals on visitation and custody by the American father in Brazil as the appeals play out.

As the media circus continues, another story has highlighted the real issue, at least from the American perspective: Brazil’s consistent failure to live up to its treaty obligations, and not just in the Goldman case. Folha de Sao Paulo has been covering the shocking case of Sascha Zanger, an Austrian father whose Brazilian wife took their two children back to Brazil in January 2008, and then left the children in care of their aunt. Zanger’s legal efforts to get them back under the Hague Convention were stymied by Brazilian courts. Then his daughter, Sophie, who had turned four, died on June 19 of head trauma. The mother’s family stands accused of abuse. 

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