South America has been a special part of my life for four decades. I have lived many years in Brasil and Peru. I am married to an incredible lady from Argentina. I want to share South America with you.
Three years ago Dilma Rousseff gathered her cabinet for an emergency meeting. The Brazilian president made a shocking announcement. “We are going to have to steal less,” she told her ministers. “That can’t be right,” one protested.
A few days earlier 2m Brazilians had taken to the streets in protest at the lavish sums spent on World Cup and Olympic stadiums instead of public services. “I didn’t say stop stealing … just slow down,” Ms Rousseff told her team. The lawmakers agreed they would be able to steal “retroactively” to compensate.
The meeting, of course, did not happen; it was a spoof posted on YouTube by comedy troupe Porta dos Fundos and viewed about 9m times. Nevertheless, it is an apt summary of Alex Cuadros’s Brazillionaires — a clear-eyed and often funny travelogue through the operatic lives of the country’s ultra-wealthy and their baneful relationship with the state.
Brazil has had an extraordinary start to the century. Ten years ago, it was feted as a country that could do no wrong. Poverty and inequality were falling and businesses boomed.But the wheels have fallen off. The country is mired in its worst ever recession. Ms Rousseff faces impeachment proceedings for allegedly fiddling public accounts. Meanwhile the Lava Jato, or “car wash”, probe into a $3bn kickback scheme at Petrobras — the national energy company that was chaired by Ms Rousseff before she became president — has resulted in the arrest and jailing of several high-ranking businessmen and lawmakers.
Cuadros’s blend of memoir, exposé and historical narrative provides a wonderful vehicle to explain how this state of affairs was reached. A former reporter on Bloomberg’s “billionaire reporting team”, he does this by going to the heart of the matter: money.
Kickbacks and state patronage have been an inherent part of Brazilian business since at least the 19th century, when the Viscount of Mauá — the “Rothschild of South America” — amassed a $60m fortune in banking and infrastructure. Mauá saw himself as the vanguard of a great national transformation. He believed enlightened self-interest was the driver of prosperity. He also often confused his own interests with those of the public.
Such delusions persist to this day. They can be seen in the way construction companies such as Odebrecht — Marcelo Odebrecht, the former chief executive, has been jailed for corruption — creamed off public works contracts. “Odebrecht’s interests are in Brazil’s interests,” as a company spokesman tells Cuadros. It can be seen in the backhanded compliment often paid to the politicians who are the counterpart to such deals: “Rouba, mas faz” — he steals but gets things done.
It can be heard in the words of Blairo Maggi,the soya producer awarded the Greenpeace “golden chainsaw” while governor of the almost deforested Mato Grosso state. Cuadros asks Mr Maggi if he sees any conflict between being a policymaker and an agribusiness tycoon. “Absolutely not,” is his confident reply.
It can even be seen in the figure of Jorge Paulo Lemann, head of 3G Capital and Brazil’s richest man. Mr Lemann is renowned for his puritan work ethic and tight cost control (“Costs are like finger nails; they always have to be cut”). But his companies have also enjoyed billions of dollars in cheap loans from BNDES, the state development bank.
Such cosy arrangements are not unique to Brazil. After all, it was an American, Charles Erwin Wilson, who said: “What was good for our country was good for General Motors and vice versa.” The promise of Lava Jato, though, is that it may end them.
Some of the leaked secret recordings from the investigation are every bit as cynical as the Porta dos Fundos satire. Lava Jato may even bring down the interim governmentthat has replaced Ms Rousseff. No other Brics country has judicial institutions with this much independence.
Cuadros knows the country too well to believe Lava Jato will change affairs for good. His affectionate panorama of its wealth, power and patronage shows why: almost everyone is implicated. “Brazil is not for beginners,” as Tom Jobim, the composer, once warned. But Brazillionaires is a useful and entertaining place to start. The reviewer is the FT Latin America editor
Brazillionaires: The Godfathers of Modern Brazil, by Alex Cuadros, Profile, RRP£10.99; Spiegel & Grau, $28