On May 21, a Monday, disorder seized Brazil, owing to a work stoppage by the country’s truckers, who were protesting the high price of diesel fuel. A large part of the fleet of 1.6 million tractor trailers, responsible for moving more than 60 percent of the goods transported throughout the country, were parked at 600 strategic locations on federal highways. Trucks blocked lanes and prevented the any type of cargo vehicle from making it through. Meat, eggs, and vegetables went undelivered. Organ transplants went unperformed. And livestock reportedly died in the fields after the feed ran out.

The strike that paralyzed the nation’s economy forced average Brazilians to pay attention to what was previously a high-level political affair: the battle over the oil company Petrobras, Brazil’s largest state-operated corporation. During the administration of President Dilma Rousseff, which ended in her impeachment and removal from office in August 2016, the oil giant was used as a means of controlling inflation. Fuel prices were subsidized, and although the price of a barrel of oil increased on the international market, the Brazilian government did not allow that increase to be fully reflected in the pump prices in the country.

The artificially low prices for gasoline and diesel put the company in debt and depleted its coffers, causing it to lose market value. The state of affairs after the subsidies compounded the effects of the sprawling “Car Wash” corruption scandal — which revealed a multibillion-dollar kickback scheme within Petrobras, benefiting executives and politicians from several parties — that has plagued its reputation and put a wrench in its operations since 2014.

After Rousseff’s removal, her vice president Michel Temer assumed office and rewrote the rules — one of many radical, pro-market changes he implemented. Temer established a new pricing policy for Petrobras that allowed international market fluctuations to dictate pump prices in Brazil. The company’s stock rallied on the São Paulo and New York exchanges, which thrilled investors. However, the change also resulted in the price of diesel changing 121 times in just two years — previously, readjustments had been made on a monthly basis, which provided transporters with greater predictability when negotiating contracts. In the month leading up to the truckers’ strike, the price of diesel changed 16 times and rose by 38.4 percent.

The economy has shown statistical signs of recovery — but a weak one, much slower than after past crises.

A few weeks ago, Temer declared himself triumphant on Twitter: “Two years ago, I took the helm of the Brazilian government with a tough mission: to rescue the country from its most severe recession, to stamp out unemployment, to return to fiscal responsibility, and to maintain social programs. In fact, I have done all of that.” But to the majority of Brazilians, Temer lives in a parallel universe. The economy has shown statistical signs of recovery — but a weak one, much slower than after past crises. Yet the shifts have yet to materialize in the lives of ordinary people. Temer even tried to sell new data showing an increase in the unemployment rate as a positive, but was contradicted by the Brazilian Institute of Geography and Statistics, the equivalent of the U.S. Census Bureau. With political disillusionment and economic anxiety raging, the high price of fuel was merely the spark that ignited a powder keg.

Forty-eight hours after the protests began, the price of food had already created an enormous crisis. Two weeks ago, the price of a sack of potatoes was less than $11. By Thursday last week, it had reached nearly $80 in some places. By the third day of the strike, potatoes began to disappear from markets because they could not be transported from the countryside to the cities.

The government cannot claim to have been taken by surprise by the truckers’ strike. Last Friday, The Intercept Brasil published a document proving that Temer and six of his ministers had been alerted at least a week in advance that truck drivers were planning a strike to begin on May 21 if their concerns weren’t addressed. The drivers called for an emergency meeting with the president to avoid the chaos that would inevitably ensue, but the government ignored them. So they shut off their engines.

The strike has a novel component for Brazil: Rather than being led by union representatives crowded into trucks with bullhorns leading the marches, the strike emerged out of a haphazard process organized through WhatsApp groups. In those groups, interspersed with self-help messages and pornography, political videos began to appear that inflamed protesters’ sentiments, sometimes offering hearty helpings of “fake news,” upping the octane of the revolt. Eventually, marching orders began to appear, and the protest movement emerged from the digital chats into the real world.

Despite a lack of clear leadership, the picket lines were ruthlessly enforced.

Journalists gained access to the WhatsApp groups in an attempt to make sense of the movement’s structure. They found few real leaders and instead, got a peek into a movement with disputes in every corner of the country — as if some strikers attempted to settle petty feuds while watching Rome burn. Despite a lack of clear leadership, the picket lines were ruthlessly enforced: Truckers that tried to ignore the blockades risked being beaten, some trucks were pelted with rocks or even set on fire.

The federal government reacted with panic. Officials tried to corral the discontent by handing some measure of political power to unions and businesspeople in the trucking sector, with whom they tried to negotiate. But fewer than 10 percent of the truckers belong to a union; no labor leader reigns over the WhatsApp republic. The government and the unions drew up two truces that never materialized.

The strike saw the redrawing of some of the traditional lines between labor and management and an alliance rarely seen in movements in Brazil emerged. Bosses and employees seem to have joined forces to call for a reduction in the price of diesel — a type of coordinated work stoppage considered a lockout and prohibited by law. Federal authorities quickly began investigating this supposed collusions, and one businessperson was arrested and charged. The precariousness of the workers in the industry — who are often owner-operators that bear the cost of fuel, tolls, repairs, and heavily financed vehicles — helped make that possible.

Outside pressure groups leveraged the popularity of the strike — a survey conducted by the Datafolha Institute last Tuesday showed that 87 percent of Brazilians supported the truckers, and 56 percent believed that the strike should continue — to try to call attention to unrelated interests. The image of a mass of useful, desperate people with reasonable demands and relatable complaints was too good to pass up. The most visible of these outside interests was the seemingly growing minority of Brazilians who long for the return of the military regime, which have tried to hitch a ride on the popular support for the strike. Those pushing a military coup had the support of some truckers, but how much of the movement would back a putsch remains unclear.

After a week, the truckers lost control of the situation. The strike had ballooned into a full-blown political crisis.

The militarists were quick to seize onto the chaos. A contingent of merchants, businesspeople, professionals, and middle-class people — long fed up with corruption, high taxes, ineffective governance, and rampant crime — saw in the tumult a golden opportunity to take to the streets and demand the army to seize power. That the army had subjected the country to a 20-yearlong military dictatorship — during which it tortured and killed hundreds of people and censored any news about its own rampant corruption — seemed a barely perceptible background fact.

 Normally garrulous types who seek attention at almost any cost, Brazilian politicians fell mute.

While the militarists flung themselves headlong into the crisis to make their fine-tuned propaganda points, national politicians seemed to do the opposite. Normally garrulous types who seek attention at almost any cost, Brazilian politicians fell mute — flitting in any direction that would allow them to avoid taking a firm position. Without clearly defined enemies to attack, members of Congress bravely absconded from Brasília, some within the first days of the strike, fearing that a shortage of jet fuel would isolate the city and force them to take public positions at the insistence of journalists.

Former President Luiz Inácio Lula da Silva — who leads the polls for the upcoming presidential election despite being in prison on a controversial conviction for corruption — has long been known as an astute political observer. Yet he declared himself “perplexed” by the strike, according to politicians who visited him in his prison cell in Curitiba. Jair Bolsonaro, the reactionary Army Reserve captain who polls second, behind Lula, initially called for the people to take to the streets, inciting protesters and declaring his support for the stoppage. Days later, frightened, he radically changed his position and said that it was “time to end” the revolt.

The anemic state of Lula’s Workers’ Party was the same as that of other candidates of the Brazilian left, who also failed to capitalize on the protest. The Workers’ Party, which historically had the ability to speak to the masses, hardly garnered any notice. With no ties to the truckers, the party seemed to be speaking to itself on social networks. The same was true of other candidates who have tried to pass themselves off as moderates but are, in fact, representatives of conservatism, such as Geraldo Alckmin, the establishment’s main contender for the presidency.

The politicians’ temerity has recent precedent: protests against bus fare hikes in June 2013. State and local governments were slow to react to discontent and a protest movement popped up, led by small groups initially focused on public transportation fares. The movement quickly blossomed into gigantic popular demonstrations that, when the government realized they could not be contained, were met with police violence. In the wake of 2013, new extremist movements emerged and haven’t left the streets since. These groups, like the Free Brazil Movement, were instrumental in bringing down Rousseff.

Last Sunday, during the country’s highest-rated television show, Fantástico, Temer announced a series of measures to appease the protesters. Among them, he pledged to lower the price of diesel and repeal the international price policy he had created — without saying who was going to cover the multibillion-dollar losses for Petrobras. Truckers began to start up their rigs again. But many were unable to get off the road, hindered by violent groups who had, by then, taken over many of the roadblocks. Temer called on the military and the police to disperse the holdouts.

Last week, even after their demands were met by the government, some truckers were still blocking highways. Worse yet, those who wanted to go home were not allowed to leave. One trucker who tried to cross the picket line was stoned to death.

The government says the strike has ended, but trucker WhatsApp groups are abuzz.

Journalists covering tensions in various parts of the country brought grim reports. The escalating violence had been promoted by groups that the government is calling “infiltrated militias.” These militia members, authorities say, are not truck drivers and are threatening the dissidents. However, the television program Profissão Repórter showed that many of them are, in fact, truck drivers. Those who manage to get out of the demonstrations say that the pickets have become havens of banditry and violence.

So even if vegetables are back in the supermarkets and the gas stations have been replenished, the strike continues, more or less. The government says the strike has ended, but trucker WhatsApp groups are abuzz trying to build support for a new stoppage this week.

It’s still not clear what is keeping the violent protesters on the streets and if they are acting alone or at the behest of more powerful interests. The social and economic impact remains a mystery. Will we remember this moment as the flashpoint that provoked an enormous change or just a temporary panic? What is clear, however, is that the truckers’ strike has shed light on several Brazilian realities: the palpable and almost universal rancor toward the government; the fragility of the supply chain and democratic system; the ineffectiveness of the entire political class; the fraud of the supposed economic recovery Temer tries to hock every change he gets; and the fear and despair that permeates a society that, panicked, even clamors for a return to the tragedy of a military government.

Brazil’s elections will take place in October. Until then, it will be a long and winding road, semi-trucks or not.

Top photo: Aerial view of Brazilian truck drivers blocking the BR-262 highway with their trucks, during the fifth day of strike to protest against the diesel fuel price-rise, in Juatuba, Minas Gerais state, Brazil, May 25, 2018.

The post Massive Truckers’ Strike Exposes Political Chaos as Brazil Gears Up for Elections in October appeared first on The Intercept.

Lula, who holds a commanding lead in every poll for the presidential election later this year despite his conviction, may still appeal to a higher court. Now, the former president’s fate is as complicated as the surreal Brazilian judicial system that controls it: In a few months we will know if the Workers’ Party leader will spend the next years of his life in jail or in the presidential palace for a third term.

The case against Lula centers around a beachfront penthouse apartment in Guarujá, a 90-minute drive southeast of São Paulo, that is estimated to be worth $1.1 million. The triplex was allegedly a gift from OAS, a construction company that received multiple large contracts from the federal government — many of them illegal — while Lula was president.

During the trial, a photograph surfaced showing the former president together with an OAS executive inside the property. The executive became a cooperating witnesses and testified that he negotiated the deal and OAS bankrolled an expensive remodeling of triplex specifically for Lula. In exchange, Lula allegedly steered the firm into deals with Petrobras, the state-controlled oil company, whose directors are appointed by the federal government.

A Flawed Process

The indictment against Lula is rife with problems. The apartment’s title was never transferred to Lula or his associates; he and his wife never used the property; the prosecution could not identify an explicit quid pro quo or benefit related to Petrobras; no official or internal documentation linking Lula to the apartment was produced; and the case rests almost entirely on the testimony of the executive who hoped to gain sentencing leniency for his cooperation. Many high-profile lawyers from varied political stripes argue that the indictment and Moro’s ruling are flawed.

In a more nettlesome wrinkle, Moro unsealed wiretapped telephone conversations between Lula and his lawyers and also with then-President Dilma Rousseff. The recordings had been made after the judicial warrant had already expired. The tapes promptly leaked to the press at a highly charged political moment and were played non-stop on TV news to dramatic effect — an effort to drive public opinion against the former president. The release was unconstitutional and Moro was eventually forced to admit his errors after the Supreme Court began to look into it.

In another notable incident, Moro sent Federal Police to Lula’s house to forcibly take him to a remote deposition in a dingy conference room in an airport in São Paulo. The existence of the operation was leaked to the press and the subsequent media circus produced embarrassing images that resembled a perp walk. It was an entirely unnecessary spectacle, as Lula’s lawyers had made it clear that he would voluntarily cooperate.

The System is Rigged

These overreaches reflect the attitude of the country’s entrenched judicial elite, who wield almost untouchable power. Judges regularly receive outrageous salaries leaps and bounds above the constitutional limit; opine liberally in interviews; have private businesses that benefit from public money and their public profile; and often squabble in open court as if they were on a reality show. (In one famous exchange in the Supreme Court, one minister quipped to another, “Your excellency is in the media destroying the credibility of the judiciary. Your excellency is not talking to one of his henchmen.”) If judges are caught red-handed committing serious crimes, the maximum penalty is retirement — with a full pension.

It is amid these eccentricities of Brazil’s judiciary that the Lula trial unfolded among controversy. The president of the court who convicted Lula today — the boss of the three judges on the panel — previously declared in an interview that Moro’s indictment was “just” and “irreproachable” before confessing that he had not examined the evidence. One of the three judges who voted for today’s conviction, João Pedro Gebran Neto, is a personal friend and former classmate of Sergio Moro. In the acknowledgements of a book he wrote, Gebran describes Moro as a “learned and insightful man,” adding “our affinity and friendship only grew during this period, as it became clear that [Moro] collaborated decisively to this work with suggestions and criticisms.”

Lula’s treatment at the hands the courts is not exactly anomalous, critics say. Brazil is grappling with a moral quandary over its criminal justice system: Is it fair that, like Lula, thousands of people are sentenced each year without irrefutable material evidence of their alleged crimes?

The Court of Public Opinion

The public debate surrounding the case has had little to do with real estate and has instead been something of a referendum on Lula’s legacy: Should the man enter the history books as a political legend or go straight into the garbage can?

Leftists, unsurprisingly, have fiercely criticized the proceedings that have put their leader in the crosshairs over the past years. But Operation Car Wash, under Moro, has exposed corruption in all of Brazil’s major political parties. The parties that orchestrated Rousseff’s impeachment on the supposed grounds of “fighting corruption” — the PMDB and the PSDB — have themselves been exposed for extreme corruption. But,  as Celso Rocha de Barros notes, only Lula’s party, the PT, has been politically decapitated, while the leaders of other parties remain in power in the face of overwhelming evidence. President Michel Temer, of the PMDB, is the most unpopular leader in Brazilian history (and, in fact, in the world) and has faced a slate of serious corruption charges.

The apparent hypocrisy has exacerbated widespread political disillusionment: In a country where voting is mandatory, 32.5 percent of population abstained, voted “none of the above” or left their ballot blank in the last election.

Amid this disillusionment, Lula remains a favorite politician. It remains unclear if he will be able to run in the next election; his candidacy could be blocked prior to election day due to the upheld conviction. If he does run and win, Lula could also subsequently be removed from office by the judiciary.

The mere possibility of his candidacy will continue to be met by fierce opposition: For Brazil’s right wing, Lula’s electoral victory would mean a new economic recession for the country and a foreclosing of their economic future.

The Market Wants Austerity, Not Lula

The uncertainty hanging over Brazil’s body politic underscores a heated unfolding battle over Brazil’s economic policy.

Last month, the financial rating agency Standard & Poor’s reduced Brazil’s credit rating from “BB” to “BB-.” a move that contradicts the current government’s message that the economy is getting on track thanks to the introduction a slew of harsh austerity measures. Analysts regularly attribute stock and currency dips to the anonymous “market’s” ethereal “fear of Lula“. The financial press has endlessly cited “expert analysis” warning that if Lula is acquitted, interest rates will rise and the stock market and currency will fall. Since the beginning of the year, chief economists of investment firms have said that they “do not consider the hypothesis that Lula will be acquitted.” The threat is implicit: Convict him or the crisis will return.

The same advocates of austerity who pushed to use Brazil as the laboratory of neoliberalism in the 1990s — and today admit that the model did not work — now want the country to give it another crack; they have renewed their endless appeals to “the market.” The current administration supports this once-failed tack, especially through privatizing state-owned companies, slashing public services, and loosening labor laws. The gamble would place the country more firmly in the hands of a business class that invariably cares only about further concentrating its own wealth. All this amid an environment where staggering inequality is already rife: Brazil’s richest 5 percent have the same income as the remaining 95 percent.

Lula in 2018, however, isn’t exactly Che Guevara. His political legacy has business-friendly foundations, with a veneer of social justice in the style of a Barack Obama. In embracing big business and showering them with the best economic period in the nation’s history, Lula and his party made the mistake of believing they had been accepted as equals in the oligarchic parlors that have long-since run Brazil. Lula’s circle sipped champagne and simultaneously won plaudits by the millions of working poor struggling at the edge of misery — they had it all.

But “the market” always wants more. Lula’s party learned to hold the champagne flute with grace, but when the time came, they weren’t ready to break off the base and shove the jagged stem into the neck of their poorest supporters’ necks — in service of propping up investor profits. So the market moved on and found someone else who would. The scandal was never really about corruption.

What does this mean for Brazil? The economy has just barely scraped out of a harsh recession that pushed millions back into extreme poverty. Unemployment remains high. And even though inflation is currently under control, some economists believe Brazil may soon enter a dangerous cycle of deflation, a harbinger of a lost decade. A shaky economic foundation is a difficult enough position for any nation to be in; in Brazil it is coupled with political instability. The two most likely results to this year’s election both produce scenarios in which the winner lacks governability. If Lula wins, his victory can be annulled at any moment and he can expect the market to punish the nation economically for its choice. The alternative is likely to be a relatively unpopular right-wing candidate who will continue implementing crushing austerity policies. Dump that on top of the current mess that Brazil is in and, either way, the result is a confluence of circumstances with a destructive potential yet unmeasured.

Update: Jan. 24, 2018, 2:58 p.m.
This story has been updated to reflect the final tally of judges and the increased prison sentence for Lula.

Top photo: Former Brazilian president Luiz Inacio Lula da Silva speaks during a rally with supporters at the Metallurgical Union, in Sao Bernardo do Campo, Sao Paulo state, Brazil on January 24, 2018.

The post Ex-President Lula’s Corruption Conviction Is Upheld by Brazilian Appeals Court. Now What? appeared first on The Intercept.