After months of charges and denials of misconduct, the main architect of Brazilian President Luiz Inácio Lula da Silva’s economic policy, Finance Minister Antonio Palocci, is out of the picture.
Guido Mantega, president of the BNDES and a veteran member of Lula’s economic team, is the new finance minister. He accepted the president’s invitation to fill in Palocci’s shoes. Mantega is a personal friend of the president. The message here: Palocci is out, but Brazil’s economic policy is still the same.
The Brazilian President, who more than once had guaranteed that he wouldn’t accept Palocci’s resignation ended up firing him when incontrovertible proof of his minister’s involvement in unethical and illegal behavior was presented.
The Brazilian finance ministry still tried to save face, creating a script in which Palocci appeared to be the one presenting a resignation letter to the president.
Apparently, Palocci had been lying to the public and to the president himself all this time. In the last few days the now disgraced minister had assured Lula that he had nothing to do with the illegal disclosure of the bank account statement of Francenildo dos Santos Costa.
Costa, a house caretaker, had affirmed that he had many times seen Palocci arrive driving his own car at a house in Brazilian capital Brasília known as a place of prostitution and a spot where proceeds of extortion were shared.
The disclosure of the caretaker’s bank records was seen as an attempt to discredit his testimony. At first, Palocci denied that he had anything to do with obtaining the information that was passed to the weekly magazine í‰poca, which published it.
On Monday, March 27, however, Jorge Mattoso, the president of Caixa Econômica Federal (state-owned Federal Savings Bank), where Costa had his account, told in a testimony to the Federal Police that he had personally delivered the bank records to Palocci.
When informed by Justice Minister, Márcio Thomaz Bastos, about Mattoso’s testimony Lula didn’t have any other choice but to fire his Finance Minister. Mattoso has also been sacked.
Contrary to the official scenario played by the Finance Ministry, there are reports that Palocci appealed to the President to spare him the guillotine. There was no clemency this time.