Brazil Battles Corruption

Revolving doors at Brazil's ministries.

Labor Minister Carlos Lupi works very hard. So hard that, even while serving as labor minister, he is accused of having held a paid job at the federal House of Representatives. One of those jobs where it doesn't matter if you show up or not. Local media pointed out this wasn't strictly legal.

Brazil's Labor Minister gave up and resigned on Sunday after a month of press reports linking him to corruption. That made him the seventh minister to resign since President Dilma Rousseff took office on January 1—of this year! At least five of the resignations came amid accusations of corruption. The most embarrassing of the dominoes may have been the resignation of the Sports Minister, who folded his tent under a dark cloud during the country's frantic preparations to host the 2014 World Cup and the 2016 Olympics.

But a possibly bigger impact came in August, when Brazil's latest Ag Minister, Wagner Rossi, resigned amid a shower of allegations that made it hard for him to get his work done. He was accused of gadding about on a corporate jet owned by a contractor for the Ministry, allowing a lobbyist to set up an office right in the Ministry building, and other momentary lapses of judgment.

 Even if all those accusations turn out to be true, Rossi was a capable minister for getting things done. He understood agriculture, and came from an agricultural background. And those are pretty good credentials to have when ag is the backbone of your country's GDP, responsible for some $63.8 billion in exports in 2010, which was up 16% of 2009 figures, according to the Ag Ministry.

And here's the thing: For funding government efforts to build a middle class, agriculture is not the hen that lays the golden eggs—it's still a growing chick, and needs to be fed. And so Brazil is looking for investment to turn millions of acres of degraded pasture into cropland. And, at a time when sugarcane yields are down due to a lack of investment, Brazil could use some infusions of cash so that its sugarcane ethanol output keeps up with the increase in the use of flex-fuel cars.

Some of the money to improve sugarcane land and lower transportation costs could come from foreign investors. Carlos Lupi hasn't been convicted of anything, and former Ag Minister Wagner Rossi has launched a spirited defense of his reputation. But Brazil needs to get some housecleaning done urgently—a lot more than the fate of the World Cup depends on it.
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