Denial of Corruption Gives Brazil's Leader Breathing Space

BRAZIL'S fledgling democracy appears to have gained a respite after President Fernando Collor de Mello's televised speech to the nation Tuesday night denying allegations of corruption leveled against him.

But in a week where two major local newspapers called for President Collor to resign, that respite could be shortlived. "It's still time to buckle your seat belts and not smoke," said Carlos Chagas, a local television commentator. Collor may garner enough support in the National Congress and among state governors to stay in office until the end of his term in 1995, political analysts say. But they caution that he may now be too weak to effect the economic liberalization, stability, and growth that he has

promised since he became president in 1990.

Most politicians interviewed just after the speech said they were satisfied with Collor's self-defense, at least until a congressional investigative committee reaches a conclusion. "I recognize the president's effort to bring tranquillity to his viewers," said Sen. Mauro Benevides, who presides over Congress. "The [committee] must still judge the matter."

Congress will not go into its traditional July recess, so the committee will continue to hear testimony. Legislators are also to consider at least 22 pending bills, including the rescheduling of a general plebiscite which could allow Brazil to replace its presidential form of government with a parliamentary system.

Collor made the speech, his third relating to corruption charges, after the news weekly Isto E reported allegations by a chauffeur who worked at the presidential palace until last April. The chauffeur, who was scheduled to give congressional testimony yesterday, told Isto E that because he did banking errands he knows that the president's campaign treasurer and friend, Paulo Cesar Farias, was funding Collor's household expenditures. The magazine report added to previous reports and allegations now being investigated, and led many Brazilians to conclude that Collor and Mr. Farias are partners in the profits of high-level influence-peddling schemes.

The president presented documents on television that questioned the chauffeur's integrity and indicated that Farias has not been identified as a depositor to the account used to fund the president's household expenditures. Collor noted that he had chosen not to live in the presidential palace with taxpayers footing his bills, preferring instead to reside in his family's Brasilia residence and pay his own bills.

Also, Collor finally responded to questions about his relationship with Farias, alleged to have used his proximity to the president to earn fees by lobbying for contracts and official favors. Although the chauffeur said he had seen Farias ride up the president's private elevator with a birthday present for him last August, Collor said he hasn't seen Farias for two years. "His link with me ended at the end of the electoral campaign," Collor said.

The outcome of this crisis, analysts say, depends on Collor's ability to manage the demands of the country's intelligentsia; its politicians and business class; and the silent majority made up of urban poor. That ability helped Collor win the 1989 election, but historian Laura Tetti notes that the latter group is a "question mark" - it is hard to say whether that constituency will mobilize in some fashion, or will simply put up with the scandal, as it has done with the numerous economic and political cri ses of the last decade.

Meanwhile, many in Brazil's upper classes voice shame and skepticism about their president. "He talked and he talked and said nothing," commented Michel Finkel, a Sao Paulo pediatrician, after the speech. "The congressional committee has to get to the bottom of this."

In his speech, Collor attributed the corruption accusations to "speculators, middlemen, and cartels," to those who seek "electoral and economic advantages," and to those who are being hurt by his economic policies. "We are on this correct path," he said, "and I will stay on it to the end of the term voted to me."