Brazil Petrobras Corruption Contributes to Nation’s Economic Decline

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Brazil’s Petrobras corruption contributes, on an epic scale, to the nation’s economic decline. Petrobras, a semi-public, state-owned oil company with headquarters in Rio de Janeiro, has been accused by federal authorities of fraud and business corruption. According to Voice of America News and federal prosecuting reports, it has already lost 2 billion dollars just in bribes from corruption within the company in the span of a decade. Last year when rumors of the corruption scandals began, Petrobras workers failed to pay much attention; after all, corruption is a street word anymore. However, the real blow was felt when José Dirceu, key architect of a price-fixing and a political kick-back scheme, was escorted to federal police headquarters in Curitiba last week.

By market capitalization, Petrobras is the largest company in the Southern Hemisphere. Brazil is the second largest economy in the Western Hemisphere, only behind the US.  Measured by revenues of 2011, it is the largest company in Latin America, but this company is falling fast. But who is gaining the cream off the top of these revenues? The corruption seems to span across oil businesses and into the political arena.


According to Voice of America, federal prosecutors filed corruption, racketeering and money-laundering charges against José Dirceu, who was taken into custody on charges of alleged involvement in a massive fraud in connection with Petrobras. Dirceu, Brazil’s former presidential chief of staff under former president Luis Inácio Lula de Silva, had been arrested earlier in August of this year, where he was already under house arrest serving an 11 year sentence for his previous political corruption. This last Friday, Sept. 4, he and 16 others were taken into custody by police.

Recession has become apparent; workers are being laid-off, small business are closing up across the nation, and many are just trying to stay afloat. Every city, town and village in Brazil is feeling the decline.

Brazil’s Petrobras corruption contributes to the nation’s economic decline and fills the pockets of the wealthy. Petrobras has been known to be the ATM for those with power and connections.

Workers in Itaboraí, where the new refinery for Petrobras is being built, are the first of thousands who have been affected. According to The Guardian, Dorgival Ornelas de Silva, a former employee, has not been paid for four months, does not have enough money to return to his home and family in the north-east, suffers from depression, and worries as to how he will  support his 2-year-old daughter. The “thieves” they call the 103 politicians and executives who have already been indicted on corruption charges.

According to Buenos Aires Herald, “Under the Brazilian law, only the Supreme court can prosecute sitting politicians.” And who are the politicians?


Brazil’s current president, Dilma Rousseff was president of Petrobras in the period 2003-10. But Rousseff has been cleared by prosecutors. Many believe she must have known of the corruption as wrongdoings already existed at time she was Petrobras’s president. This massive business and political corruption is taking Brazil’s economy down the road of decline and is clearly tied to members of Rousseff’s political party.

The corruption is intense. This scandal includes past officials who have been arrested before for other criminal offences. In the midst of these “thieves” are such people as the former president of Brazil, Fernando Collor de Mello who was impeached in 1992, Renan Calheiros, member of the political dynasties who in 2007 was forced to resign as the president of the senate (when evidence was discovered about how a construction firm lobbyist was paying his child support to a former mistress), João Vaccari Neto, the former treasurer of Brazil’s governing workers party, and Renato de Souza Duque, Petrobras’s former head of corporate services.

Brazil’s Petrobras and its corruption greatly contributes to the economic decline of a nation who does not have adequate measures to prevent the strong and wealthy, who are in positions of leadership, from robbing the coffers. Leaders accused of corruption have a way of delaying trial, enjoy a life of luxury while they turn a blind eye to their nation’s economic decay.

By Jeanette O’Donnal


The Guardian: Brazil’s Former Presidential Chief of Staff Charged With Corruption

Voice of America News: Brazil Prosecutors Charge Lula Former Chief of Staff

The Guardian: Brazil Petrobras Scandal Layoffs Dilma Rousseff

Univision : America Latina Brasil Exministro de lula Jose Dirceu Ingresa a Prision Corrupcion Petrobras

Feature Image Credits: Minale Tattersfield – Flickr Creative Commons License

First Text Image: Credits: – Google Image

Second Text Image: Dilma Rousseff – President of Braizil – Global Panorama – Flickr Creative Commons License

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