Rousseff Labels Petrobras CPI a Political Dispute

By Maria Lopez Conde, Senior Contributing Reporter

SÃO PAULO, BRAZIL – Brazilian President Dilma Rouseff deemed the opposition’s efforts to establish a Parliamentary Commission of Inquiry (CPI) into alleged irregularities at state-controlled Petrobras a “political dispute” this Monday, April 7th. At a speech in Minas Gerais, Rousseff discarded the claims that she approved of the 2006 irregular acquisition of the oil refinery in Texas when she was part of Petrobras’ Board of Trustees.

The transaction is currently under investigation by Brazil’s Court of Auditors (TCU) and the Federal Public Ministry over suspicions of over-billing and tax evasion.

“It’s very usual in a pre-campaign period in Brazil, as the one we are in now, to use all possible tools to damage the government,” Rousseff said on Monday, addressing the scandal. “We have experience with that, because we already faced that in 2006, during [former President] Lula’s reelection and in 2010, during my election.”

State-controlled Petrobras paid US$360 million to acquire half of the Pasadena, Texas refinery in 2006. A figure much higher than the US$42.5 million amount that Belgian firm Astra Oil paid for the entire facility a year earlier.

A 2008 judicial dispute between Petrobras and Astra Oil eventually forced the former to purchase the remaining half of the refinery from Astra for US$820.5 million, which were paid in 2012. President Rousseff has come under fire for her initial role in the acquisition that ultimately cost US$1.18 billion.

At the end of March, Rousseff responded to the allegations by stating that the decision to purchase the refinery had been unanimous among the Petrobras’ trustees and that her approval was influenced by a flawed report that was in favor of the acquisition.

The opposition sprung to denounce Rousseff’s role in the affair. Antonio Imbahassy, federal deputy from the opposition Brazilian Social Democracy (PSDB) party, accused her of “costing taxpayers more than US$1 billion” in March. Rousseff’s opposition in the Brazilian Congress has also proposed the establishment of a CPI to look into the acquisition of the refinery and allegations of bribery at Petrobras.

“You can be certain that my government will continue to govern … but we are not going to retreat one millimeter from the political dispute if it appears,” Rousseff affirmed last Monday. Rousseff’s move to link the Petrobras scandal to election year politics was outlined by Lula and Rousseff in a meeting in Brasília on April 4th.

Roussef’s approach appears to focus on providing little technical explanations on the purchase and deeming the accusations part of the opposition’s political game ahead of the October elections. Avoiding the CPI at all costs is also part of the strategy it seems to analysts.

This is because a CPI into Petrobras could have a “devastating effect” on Rousseff, said Octavio Amorim Neto, Political Science professor at Rio de Janeiro’s Fundação Gétulio Vargas. “The [CPI’s] electoral impact, that is a very serious question for [Rousseff] because she once served as the Minister of Mines and Energy; she was introduced to Lula and the nation as an expert on energy matters, and Brazil today is living an energy crisis,” Neto told The Rio Times.

“The destructive potential of [the CPI] is very big because it could affect her reputation as a manager and a specialist on energy,” he said, adding that the CPI is likely to be defeated in Congress, or will have its scope expanded into other issues to overshadow Petrobras. One third of senators or deputies in Brazil’s Congress must approve of a commission to implement it. Rousseff and her allies currently control Congress.

“CPIs are political disputes between the government and the opposition in Brazil,” Neto explained. “The government is transforming it into a political question and will let its legislative majority defeat the CPI in Congress, with the justification that the [Petrobras] CPI has nothing beyond political objectives,” he predicted.