In several previous diaries written during the 2010 Brazilian election season, I commented on the high level of mudslinging coming from PSDB candidate José Serra's campaign, and how it mirrored in many respects a standard modern USA-Republican campaign.
This was not by accident: José Serra's campaign was supported by American oil companies such as Exxon Mobil and Chevron, and he had secretly promised to sell the rights to Brazil's newest petroleum discoveries (in the "pre-salt" layer) to those companies, reversing a new revenue-sharing model.
In a series of documents released by Wikileaks, the American preoccupation with control of the Brazilian oil-fields is detailed, as well as the promises of Brazil's political opposition to deliver those fields into private hands.
More over the fold.
During the presidency of Fernando Henrique Cardoso (1995-2002), Brazil conducted an extensive series of privatizations of national resources and companies, a move which put many people out of work and which decimated the financial reserves of the State to the benefit of a few wealthy entrepreneurs, both domestic and foreign. These privatizations also wounded the former center-left political party PSDB significantly. Cardoso's popularity plunged, and the mere mention of privatização has been enough to keep the PSDB out of the presidency for three straight elections.
The issue rose to the forefront again this year, with the accusation from PT candidate and hand-picked successor to Lula, Dilma Rousseff, that Serra and the PSDB intended to "privatize the pre-salt layer." The pré-sal (pre-salt) refers to a series of recent deep-water oil discoveries off the Brazilian coast that greatly multiply the volume of Brazil's proven reserves, turning it into one of world's largest potential producers. The name refers to the fact that this oil lies beneath a thick layer of salt below the ocean floor.
At issue was a new law that guarantees 30% of all revenue generated from exploration of the pre-salt oil-fields to the government and that Petrobras would be an obligatory partner and exclusive on-site operator of all wells opened in the pre-salt fields.
Serra and the PSDB denied the claim of privatizing the pre-salt, but the charge damaged his campaign in the second round because of the lingering memories of Cardoso's wave of privatizations in the late 1990s. Of course, as it turns out, the charge was 100% true.
As summarized by Natalia Viana, of Carta Capital magazine:
Not long after the first proposals for exploration emerged, the Rio de Janeiro consulate sent a confidential telegram summarizing the responses of oil company executives.
Dated August 27, 2009, it shows that Petrobras’ role as sole operate was viewed as "anathema" by the industry.
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"The rules can always be changed later," Patrícia Padral of Chevron reportedly said..
The same attitude was reportedly taken by PSDB presidential candidate José Serra, according to the December 2, 2009 telegram.
"Let these guys (from the PT) do what they want. The bid solicitations will never come off, and then we will be able to show everyone that the old model actually worked...and we will change everything back," Serra reportedly said.
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"With the industry resigned to passage of the bill in the lower house, the strategy now is to recruit new partners to work on the Senate, trying to pass substantial amendments and trying to delay the outcome until after the October elections," the diplomatic cable concluded.
Hmm... get the Senate to delay and water down legislation, and then get back into power and change the law back... where have I heard this strategy used before? It seems so familiar...
Anyway, to show that news isn't always bad, the plan failed epically. The new law was approved, Serra and the PSDB were defeated soundly in October's elections, and the incoming Senate in 2011 will be missing a great many of its strongest rightwingers, who were swept out en masse.
I only included a couple of excerpts here because of fair use concerns, but it's worth it to read the whole thing. Links for the entire article in English here, or the original Portuguese here.