There must be no compromise on integrity, no allowance for arrogance, no room for violation of mutual respect; there will be no sacrifice of our values on the altar of political expediency.
I have the strength and courage and independence of mind to measure every tough decision on the basis of what is right and just…Regardless of the consequences, I remain resolved to do the right thing because it is the right thing to do…No one is exempt from the measure of value based leadership.
…I hold no brief for any man or woman save the greater public interest. I am always aware of the higher expectation upon which this Government was elected and the immense responsibility each of us has to uphold public trust in all we do every single day of our lives. It is not a responsibility we can choose to have one day and lose the next.
I am reminded of Gandhi’s identification of one of the seven social sins as being “politics without principles”. I have insisted from the moment we took office that each one of us must display a sound character of public integrity, fairness, humility, compassion and human dignity.
Mrs. Kamla Persad-Bissessar, Former Prime Minister of Trinidad & Tobago
Two of Guyana’s three neighbours – Venezuela and Brazil – are in serious political turmoil. Last Thursday, Venezuela’s political Opposition took to the streets of Caracas to protest the steep rise in inflation estimated to be in the triple-digits, severe shortages of food and medicine and the uncontrollable level of crime. Estimated at close to a million and the largest in a decade, protesters demanded that a recall election (equivalent to a referendum) be held before year end. According to a recently conducted poll, 83% of the respondents indicated that they would vote the President out of office.
Over in Brazil, the Senate last Wednesday voted 61-20 to remove President Dilma Rousseff from office for violating the country’s Constitution and its Fiscal Responsibility Law and for administrative misconduct. Today, we discuss the impeachment and removal of the Brazilian President and draw parallels to our own recent experiences.
Background to the impeachment
The impeachment proceedings commenced late last year mainly because the President had authorised the use of funds from State-owned banks to meet public expenditure without congressional approval. The specific allegation was that she manipulated the federal budget to disguise a growing fiscal deficit. The economy had shrunk for six consecutive quarters, there was a record budget deficit, and the President’s approval rating had sunk from a high of 92% to 10%. The Tribunal de Contras de Unajao, a sub-committee of Congress, unanimously considered that there has been a violation of fiscal responsibility.
Critics have argued that the President’s action was to boost expenditure on social welfare programmes, such as Bolsa Familia, in the run-up to the 2014 national elections in a bid to secure votes from the country’s poorer classes since they were the main beneficiaries of such expenditure. These critics as well as the political Opposition considered the President’s action a “crime of responsibility”. A term that has been used to describe what has happened is “fiscal pedaling” which is an accounting manipulation to give the impression that the Government received more money than it spent. The funds were taken from State banks which were not reimbursed, and hence the related expenditure were not reflected in the country’s accounts.
Corruption scandals at Petrobras
During the period 2003 to 2010, President Rousseff was the chairperson of the board of directors of Petrobras, the State-owned oil company, which was embroiled in corruption scandals, much of which having taken place during this period and therefore under her watch. Though not considered in the impeachment proceedings, these scandals involved an elaborate scheme whereby the executives of large construction companies created a cartel to coordinate bids for Petrobras contracts. The bids were inflated, and key employees of Petrobras were influenced to turned a blind eye in exchange for kickbacks. When the contracts were awarded, executed and payments made, these executives siphoned off the extent of the inflated contracts and passed on some of it to the concerned employees. Some of the funds went to politicians as personal gifts or donations to political parties, mainly the ruling Workers’ Party and its coalition partners.
The extent of the corruption was in the order of up to 3% of all contract prices, amounting to billions of dollars. Assisted by black market money dealers to launder the funds, some of the directors of Petrobras, who were also involved in the scheme, reportedly amassed funds in excess of US$100 million in Swiss banks while others acquired extravagant art collections. Dubbed “Operation Car Wash” because it all started at a petrol station which had a money exchange business, investigators uncovered R$6.2 billion in bribes paid and a total loss to the State of between R$29 billion to R$42 billion (US$1= R$3.26). A total of 179 persons were charged of whom 93 were convicted with jail sentences totalling nearly 1,000 years.
Another allegation relates to Petrobras’ acquisition in 2006 of the 100-year old Pasadena Oil Refinery for US$1.2 billion. This was almost 30 times the amount that the Belgian company, Astra Oil, had paid for Pasadena in 2005. The allegation was that the price paid was highly inflated and difference represented kick-backs to executives of Petrobras and politicians.
President Rousseff’s defence
The President’s defence was that: (a) “fiscal pedaling” was undertaken by previous administrations without any sanctions being imposed; and (b) her impeachment was done to protect the interest of the elite and to stymie the government social programmes that lifted millions of Brazilians from poverty during the last decade.
Reaction to impeachment and removal of President Rousseff
Critics and the political Opposition considered the decision to remove President Rousseff as an opportunity to bring to an end a long-drawn-out political crisis and to turn a new leaf in a country that saw the worst recession in generations as well as the corruption scandals at Petrobras. In Sao Paulo, Brazil’s largest city, citizens were elated at the decision of Congress and celebrated with fireworks.
Drawing parallels to our own recent experiences
The impeachment and removal of President Rousseff were based on circumstances similar to those that were experienced at National Industrial and Commer-cial Investments Ltd. (NICIL) under the previous Administration. The then Cabi-net had instructed that funds be diverted from other State institutions, such as the Guyana Forestry Commission, the Guyana Geology and Mines Commission and the National Frequency Management Unit, into the coffers of NICIL to be used to fund public expenditure without parliamentary approval. This was in violation of Article 217 of the Constitution and Section 16 of the Fiscal Management and Accountability Act. Despite this, to date no sanctions or disciplinary actions were taken against those responsible for this serious constitutional violation.
One gets the impression that the Cabinet’s decision was prompted by the need to keep the budget deficit within the limit agreed upon with the International Monetary Fund in order for Guyana to meet the eligibility criteria under the Highly Indebted Poor Countries Initiative (HIPC). It was therefore a manipulation of the public accounts which is similar to the “fiscal pedaling” in the Brazilian context. That apart, Guyana was not that badly off to have been categorized as a “highly indebted poor country”. But our politicians felt that it suited our purpose to be so considered, since we were able to secure massive write-offs and rescheduling of our bilateral and multilateral debts as well as other forms of assistance. Indeed, we went around with a begging bowl and pretended that we were so badly off. Now that HIPC has come to an end, we are now considered a middle income country!
One also recalls the events leading to the prorogation of Parliament to stave off a vote of no confidence in the Govern-ment. The then Minister of Finance, with the approval of the Cabinet, had authorised withdrawals from the Consolidated Fund in the sum of $4.554 billion to meet public expenditure without parliamentary approval. The matter was challenged in the Courts which ruled that the Minister had violated the Constitution. Despite this as well as the filing of a complaint with the Police by the Alliance for Change Leader (now Vice-President and Minister of Public Security), no sanction or disciplinary action was taken against the Minister or the Cabinet. The then Minister showed no remorse when he stated that he had done nothing illegal and if the opportunity presented itself, he would do so again. The former Head of the Presidential Secretariat added his piece by considering the ruling an “excursion” by the then acting Chief Justice.
Articles 70 and 71 of our Constitution allows the President to prorogue or dissolve Parliament at any time. Former President Donald Ramotar used these provisions to full effect when he prorogued and subsequently dissolved Parliament, thereby paving the way for fresh elections in May 2015.
The point is any attempt by the National Assembly to hold a President or a government to account for any violation of the Constitution or for misconduct as provided for under Article 180, can be negated by the President invoking the provisions of Article 72 by dissolving Parliament. This flawed constitutional arrangement has been in place since 1980, and to date no government has shown any willingness to correct it.
