Brazil Political Parties Seek to Oust Senate President Sarney

Brazilian President Luiz Inacio Lula da Silva’s Workers Party and four other parties are pressuring Senate President Jose Sarney to step down amid ethics charges that threaten to delay the government’s legislative agenda.

A Senate ethics committee is scheduled to meet as early as tomorrow to discuss allegations that Sarney, a former president and head of the Brazilian Democratic Movement Party, the biggest in Congress and known as PMDB, used his position to benefit family members and allies. Sarney, 79, has denied any wrongdoing and vowed to fight the allegations.

Leaders from parties controlling 46 of the Senate’s 81 seats yesterday agreed to ask Sarney to either resign or take a leave of absence while he defends himself, Senator Sergio Guerra, head of the main opposition Social Democracy Party told reporters in Brasilia.

The debate over Sarney’s future has been shaking the government’s already fragmented ruling coalition for weeks. If he leaves his post, it would remove a key ally Lula is counting on to push through long-awaited oil reform measures and deal with a potentially damaging congressional probe into accounting abuses by state-controlled Petroleo Brasileiro SA.

“We’re reaching the brink,” said Joao Castro Neves, a political analyst at CAC Consultoria in Brasilia. “The cost of Sarney clinging to power is paralysis of the legislative agenda. The problem is it’s not clear that his replacement can easily repair the damage.”

Protesters yesterday unfurled a banner reading “Fora Sarney,” Portuguese for “Get Out,” in the Senate chamber.

Most to Lose

Petrobras has the most to lose from the senate crisis, said Christopher Garman, a Washington-based analyst at the Eurasia Group. The Senate this week is set to start a probe into whether the company improperly cut its tax bill and funneled part of its 555 million reais ($302 million) charitable budget last year to government supporters. Chief Executive Officer Jose Sergio Gabrielli denied the claims on July 14.

The Senate is also expected to take up later this year a proposal to change oil legislation that may affect Petrobras’s development of the Tupi offshore oil field, the largest oil discovery in the Americas in three decades.

“The PMDB has a privileged position in the Senate and doesn’t want to lose it,” said Garman. “Disgruntled PMDB members could make the probe less predictable.”

Lula initially backed Sarney and blamed the press for unfairly targeting him over abuses that are widespread in the Senate.

“Secret Acts”

Sarney is accused of signing dozens of so-called secret acts to create undisclosed administrative Senate jobs. Lula said after the alleged abuses were revealed it was unfair to treat Sarney as a “common person” because of his service during Brazil’s transition to democracy from military rule between 1964 and 1985.

Lula has since backed away from his ally and said on July 31 it was up to Sarney’s colleagues in the Senate to decide his fate. The PMDB’s 19 lawmakers are the largest of 12 party blocks in the Senate.

Electoral politics may be the reason for Lula’s decision to distance himself from the scandal, said Alexandre Barros, head of Early Warning, a Brasilia-based political risk company.

Lula, barred by Brazil’s constitution from seeking a third term, is counting on PMDB support to promote cabinet chief Dilma Rousseff as his successor.

As popular outrage against the Senate grows, Lula’s earlier support for Sarney may backfire on the little-known Rousseff, who is trying to surmount a double-digit gap with frontrunner Jose Serra, the opposition governor of the state of Sao Paulo.

“Lula’s not going to jeopardize his candidate by sticking out his neck for someone at the end of the line,” Barros said.