It was a terrible weekend for Brazil’s left wing political parties.
The once ruling Workers’ Party was utterly clobbered on Sunday’s second round voting in state mayoral elections. In Rio de Janeiro, the party known as PSOL was beat up so badly that the lead candidate Marcelo Freixo, who had marijuana legalization as a key platform, garnered less votes than the 1.3 million of voters who chose neither candidate. Marginally popular evangelical leader Marcelo Crivella won with 1.7 million votes, followed by the second place finisher — a vote for no one. Anti-privatization, Rio celebrity fave Freixo came in last of the three.
Meanwhile, the Workers’ Party lost in all seven mayoral bids on Sunday.
The municipal elections stand as a testament to the public’s resounding no-confidence vote in the Workers’ Party and its former allies. While PSOL is a tiny left wing party that splintered off from the Workers’ Party run by Luiz Inacio Lula da Silva, former ally the Democratic Movement, or PMDB, also lost their bid for mayor in one of Brazil’s left wing strong holds, Porto Alegre. The city is the capital of Rio Grande do Sul, home of Brazilian supermodel Gisele Bundchen. The city’s mayor is now from rival Social Democrats, a pro-business, pro-privatization party that governed Brazil for 8 years and ultimately drove it into the arms of the International Monetary Fund.
Those moves back in the late 1990s led to 14 years of Workers’ Party rule. But year after year of party-related scandals, including those while Lula was overseeing an economic bonanza, has turned the party into a laughing stock.
This year’s impeachment and indictment of Lula successor Dilma Rousseff was the last straw. Lula’s party was completely ousted from Brazilian cities on Sunday.
Dilma was indicted by the Senate in August for cooking the books on government accounts. But a look under the hood in the Brazilian capital shows that the real reason had more to do with the massive Petrobras scandal. Brazil’s flagship enterprise was used as a piggy bank for the party. Contractors were paying bribes to get lucrative government contracts. Money was siphoned off into Swiss bank accounts, real estate, and into re-election campaigns. The schemes made the party, supported primarily by union workers and the working poor, one of the most powerful and wealthiest political machines in Latin America in less than a decade.
That level of corruption brought Petrobras down, led to the canceling or to work stoppage on many government contracts with companies tied to the scandal. Tens of thousands were laid off as a result. Brazilian unemployment is close to 12%. The economy will contract 3% this year at least, and be lucky to grow 0.5% next year.
The Petrobras scandal has led to dozens of arrests. Lula has been accused of receiving bribes and gifts in the form of real estate. He maintains his innocence and until now the federal criminal court in Curitiba, the city court in charge of ruling on white collar crimes of private citizens, has not made any judgement in his case. The fact that he is under investigation likely takes Lula out of the running for a 2018 presidential bid, something he said he was actually considering even as his party was imploding.
According to recent polls, Lula’s rejection level is just over 50% due to the corruption scandals.
Sunday’s election results will have no significant market impact. The country is clearly moving away from the ‘Lulismo’ of the past 14 years. And despite some heavy support among Rio de Janeiro’s A-list, Freixo fell hard to a wealthy, conservative evangelic that has also been part of the Petrobras graft scheme investigations. It may have been a case of the lesser of two evils in Rio. On the national front, however, the voters opted to kick to the curb the party that ransacked Petrobras, and the economy.
Dilma and Lula reportedly did not vote this weekend. Sounds almost like a vote of no confidence in themselves.