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Teflon Sarney

All remaining ethics charges are dropped against Senate President Jose Sarney, but at a cost for allies. Private debt exceeds public debt for the first time in 15 years. The health agency proposes severe restrictions on OTC drugs. Plus, an IVF doctor is accused of raping dozens of his patients, and a leading business magazine spoofs Obama's Bush-like tendencies.

Top News: The political drama over months of Senate scandals came to a head in the last two weeks. Under pressure from President Luiz Inacio Lula da Silva, senators from the Workers Party joined senators from the PMDB, or Brazilian Democratic Movement Party, to drop all remaining ethics charges against embattled Senate President Jose Sarney.


The five senators on the ethics committee from PSDB and DEM, subsequently announced their resignation from the committee and called for reform of the ethics process. And Eduardo Suplicy, a member of the Workers Party who does not serve on the committee, made waves when he stood in front of the Senate with an oversized version of a "red card" that soccer referees use to kick a player out of a game (see video) — and said that Sarney should resign.


Though Sarney may face further legal challenges, the former national president who controls the ideologically disparate but politically powerful PMDB party, can now go back to his work in the Senate, where he is a lynchpin of Lula’s ruling coalition.


But Lula’s support for Sarney came at a political cost, as parts of the public, the press and even the president’s own party spoke out against his actions. (The phrase “Fora Sarney!” -- Sarney Get Out! -- has become a common one at street protests and on posters, not to mention on Facebook.)


The head of the Workers Party in the Senate, Aloizio Mercadante, famously announced via Twitter that he had made an “irrevocable” decision to leave the party, but the next day retreated after a meeting with Lula. But other politicians, including Senator Marina Silva, did leave the party. Silva will officially announce her affiliation with the Green Party within days, and presumably will run for president next year. Though she will be a dark horse, her presence in the race complicates things for Lula’s chosen successor, Dilma Rousseff.


Rousseff was also in trouble over these last weeks, accused by the former head of the Brazilian tax agency, Lina Vieira, of pressuring her to “expedite” investigations into Sarney late last year. There was a whole hullabaloo in the days before Vieira spoke (for five hours) to a Senate committee about their meeting. Rousseff denied the meeting took place, and Lula’s very public demand for Vieira to produce evidence of the meeting showed how sensitive he is to accusations against his protégée.


The events have people questioning whether the Workers Party is “in crisis.” Lula is the party’s first president, and when he was elected many wondered whether the party, which had often taken a moral high ground when it was not in office, could keep that up once in power. This is only the latest time that has come into question during Lula’s presidency.


In non-political news, the National Health Surveillance Agency, known as Anvisa, jump-started a nationwide conversation about the role of pharmacies when it published new regulations that would severely limit the sale of products not related to health or hygiene in drugstores. It would also require that most non-prescription medications (like aspirin and antacids) be removed from the reach of customers and be available only upon request to a pharmacist or other staff members. The rules are supposed to take effect in six months.


Money: A new study out from the Center of Capital Market Studies shows that for the first time since 1994, private debt has exceeded public debt in the country. The switch actually occurred in April 2008, and the gap continues to grow. It’s a good sign of the maturity and strength of the economy, but despite improvement, Brazil still has limited credit markets available to individuals and small companies, at relatively high interest rates.


Despite Brazil’s fast recovery from the crisis — and the booming Brazilian stock market, which has totally recovered all losses and recently hit a one-year high — tax revenues have lagged behind. They were down 9.4 percent in July compared to the same month one year ago. That went against predictions made by the Finance Ministry.  Meanwhile, the Workers Party and the PMDB came out in favor of re-establishing a tax on financial transactions that had been abolished at the end of 2007. If it becomes law, it will have a new name: the CSS, or Social Contribution for Health, and proceeds will go toward health programs.


The newspaper Valor Economico released its rankings of the 1000 biggest companies in Brazil in 2008, and no surprise, the state oil company Petrobras remained number one, with net revenues of almost $90 billion. Four of the top ten companies were petroleum and gas companies, and three were automobile manufacturers: Volkswagen (#4), GM (#5) and Fiat (#9). The mining giant Vale came in third, and the airplane manufacturer Embraer, which turned 40 years old this month, was 19th, up from 26th the previous year.  Number 1000, in case you’re wondering, was Vale do Ivai S/A, a sugar and ethanol producer for Parana state.


Elsewhere: One of Brazil’s leading specialists in in-vitro fertilization, Dr. Roger Abdelmassih, was arrested in his clinic on August 17, accused of 52 counts of rape and four attempted rapes, mostly of his former patients. He had been under investigation since last year. Several requests by his lawyers—including one to the Brazilian supreme court— to release him pending trial have been unsuccessful, and he remains in prison.


Veja magazine poked fun at President Obama when it quoted from his speech at the Veterans of Foreign Wars National Convention in Washington. The quote: “This war is fundamental to the defense of our people. Those who attacked America on 9/11 are plotting to do so again. If left unchecked, the Taliban insurgency will mean an even larger safe haven from which Al-Qaeda would plot to kill more Americans.”  Veja’s attribution: “George W. Bush…Oops! Barack Obama.”