Opinion: The historical roots of the “secret budget” in Brazil, aka the “Bolsolão”, explained

RIO DE JANEIRO, BRAZIL – (Opinion) The title for this essay could have been “How the 300 Scoundrels morphed into the Centrão and want to pay themselves R$19 billion to help re-elect Bolsonaro.”

By way of institutional background, Article 100 of Brazil’s 1988 Constitution details how legislators can submit proposed “amendments” to the federal Budget for the following year.

These amendments are common to democracies, as legislators seek funds for their own electoral redoubts. In English-speaking parliaments, they are formally known as budget “riders” or “earmarks”, but informally (and pejoratively) as “pork barrel”, obtained by “log rolling”. For explanations, please see here  and here.

By way of political background, this writer, in August 2020, opined on the origin of the “300 Scoundrels” sobriquet, and explained how its current reincarnation – the “Centrão” – rose like a phoenix from the ashes of the “Mensalão” vote-buying scandal. For details, see here.

With this background, we can now explain why the “secret budget” is secret, and why it is being called the “Bolsolão”.

First, as to the monicker “Bolsolão”, the answer is simple – it is a portmanteau term linking current President Bolsonaro (now seeking Congressional votes for his new social program) with the “Mensalão” scheme used by then-President Lula (when seeking Congressional votes for his new social programs).

The connection between the two Presidents, who, ironically, will likely face each other in the October 2022 presidential elections, is clear. After being elected, both betrayed the basic principles upon which they had successfully campaigned for president.

Lula ran as an anti-corruption candidate, and he used the 300 Scoundrels as the prime example of congressional corruption. Once elected in 2002, however, he sought out the 300 Scoundrels and bought their votes, paying monthly bribes. The Lava Jato investigations put an end to the Mensalão.

Bolsonaro in 2018 ran as an anti-corruption candidate, praising Lava Jato, and promising to end the “old politics” of corrupt Congressional pork barrel politics. In mid-2020, however, as support for his impeachment grew, Bolsonaro reversed course and joined up with the Centrão bloc in Congress.

Article 100 of the Constitution contains strict rules on transparency and accountability, so voters can see who proposed the budget riders, where the money went, and what projects they benefitted.

In 2019, unhappy with this transparency, the Centrão invented a new type of budget rider, called RP9, to which Article 100 does not specifically apply. The legislative bosses distribute the RP9 funds to whomever they wish, whenever they wish, and do not publish any information on who gets what. In 2020, the secret RP9 largesse was R$20 billion – and even today, no one (save the Centrão bigwigs) knows where it went.

In 2021, Bolsonaro, attempting to boost his popularity for the October 2022 election, proposed creating “Brazil Aid” to increase monthly payments to the poor during 2022. This additional R$40+ billion expense would cause the budget to breach the constitutional spending limit.

The Centrão/Bolsonaro solution to circumvent the spending limit was the “PEC dos Precatórios”, a dodgy constitutional amendment – it allows the government to default on judicially ordered payment obligations – that makes possible both “Brazil Aid”and some R$19 billion in secret RP9 funds.

When opposition to this electioneering budget-busting scheme grew in Congress, the Centrão emulated the Mensalão, and quickly distributed some R$3 billion from the RP9 slush fund to those members of Congress who agreed to vote in favor of the PEC dos Precatórios.

Unsurprisingly, the PEC easily cleared the 60% vote hurdle needed for passage in the Chamber of Deputies; it next goes to the Senate.

Brazil’s Federal Supreme Court (STF), by an 8-2 vote, recently granted a temporary restraining order against Congressional bosses distributing any more “secret budget” RP9 funds, holding that transparency is essential to the republican form of government.

The Centrão leaders are desperately trying to convince the STF not to make this injunction permanent. They mendaciously deny that the disbursements were in exchange for votes favoring the PEC dos Precatórios; they falsely claim the RP9 funds are not secret; they shed crocodile tears over local education and health projects with urgent needs; etc etc etc.

No one believes them. Nor should you.

IRONIC POSTSCRIPT: President Bolsonaro, who needs to join a political party to run for re-election, has been cozying up to the Partido Liberal (PL), the second-largest party in the Centrão, controlled by Waldemar Costa Neto, a former federal deputy. Costa Neto served 5 years in jail, sentenced for corruption as part of Lula’s Mensalão scheme. Plus ça change….