Sergio Moro, the Brazilian judge who gained superstar status for taking down a network of corrupt politicians and CEOs, resigned as justice minister yesterday in a fiery speech accusing President Jair Bolsonaro of “political interference.”
Brazil’s benchmark stock index plunged on the news, and the currency weakened against the dollar to a record low amid fresh concerns about the uncertainty of Bolsonaro’s governance.
“I was promised carte blanche to appoint all advisers, including judicial bodies,” Moro told reporters Friday, just hours after Bolsonaro fired the federal police chief. “I can’t go on without ensuring the federal police its autonomy.”
Markets blew up as investors saw it as further proof that Bolsonaro’s administration is crumbling as it muddles its way through the coronavirus crisis, with speculation growing that Economy Minister Paulo Guedes may soon be out as well.
The real sank more than three percent to as low as 5.73 per US dollar. That was by far the worst performance among major currencies on Friday – and for the year. Stocks tumbled as much as 9.6 percent.
The public security bloc of lawmakers in Congress immediately issued a statement saying Bolsonaro’s “intransigent posture” has caused him to lose one of his biggest allies.
Ousted federal police general director Mauricio Valeixo had worked closely with Moro in the sprawling Lava Jato (“Car Wash”) corruption probe until the end of 2018 and followed him when Moro joined Bolsonaro's new administration. The graft investigation ensnared scores of politicians and businessmen throughout Latin America, including former president Luiz Inácio Lula da Silva and the CEO of construction giant Odebrecht, and transformed Moro into a folk hero.
Moro told reporters Bolsonaro had promised him a free hand, and that he warned the president that removing the head of the federal police without cause would amount to political interference. Bolsonaro did so anyway, without consulting Moro, the minister said, adding he took it as evidence he was no longer wanted in the position.
“The general director could have been changed as long as there was a consistent cause. There was not a consistent cause," Moro said. “Political interference that could create inappropriate relationships between the general director or superintendents and the president is something I can't agree with.”
Moro, who is hailed by many Brazilians while seen by others as an anti-left zealot, was also key in the process that led to the impeachment of former president Dilma Rousseff in 2016. Several of the Lava Jato investigations in the southern city of Curitiba involved politicians linked to that administration. He left the court in November 2018 after Bolsonaro’s invitation to join his administration.
Bolsonaro, who was elected in large part due to his law-and-order platform, said in November that he wouldn’t have reached the presidency had Moro not “fulfilled his mission” as a judge.
“Moro’s resignation is a seismic event in Brazilian politics,” Ilona Szabó, executive director of the Igarape Institute that’s focused on public security, said in an emailed statement. “His departure signals a dangerous new phase for Brazil. It amounts to a 'coup’ against democracy because the autonomy of the federal police [and rule of law] is an essential foundation for democratic governance.”
Since Moro became minister in January 2019, however, he has had difficulties with Bolsonaro and with politicians in Brasilia, the capital.
In recent days, Bolsonaro had called for Moro to reopen Brazil’s borders with Paraguay and Uruguay during the pandemic, as the Brazilian leader has repeatedly said he wants economic activity to resume, but the minister did not agree.
The unpredictable behaviour and often explosive rhetoric that helped Bolsonaro get elected is proving a liability in the current crisis, with Brazil reporting its deadliest day so far on Thursday with 407 fatalities. The latest data from the Health Ministry shows coronavirus cases stand at about 50,000, with 3,313 deaths, although health professionals doubt the official tally.
Last week, the president fired Brazil’s health minister, Luiz Henrique Mandetta, who had urged Brazilians to self isolate, while Bolsonaro repeatedly flaunted that advice by mingling with supporters and calling the illness “a little flu.”
The departures underscores the perception that Bolsonaro’s administration has fallen into disarray. The crisis is forcing cabinet members to rethink grand plans to get Latin America’s biggest economy back on steady fiscal footing and kick-start growth. Tensions between Guedes and his boss worsened after a stimulus proposal was unveiled Wednesday that the economy minister views as unsustainable, according to people familiar with the discussions.