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Corruption probes snare top politicians in recession-hit Brazil

© AFP | Left to right: Former Brazilian president Luiz Inacio Lula da Silva, President Dilma Rousseff, and Speaker of the House Eduardo Cunha

Text by Joseph BAMAT

Latest update : 2016-03-11

In the throes of an economic recession, Brazilians are also facing a political crisis, with President Dilma Rousseff and other prominent leaders fending off allegations that threaten to upend the government.

Prosecutors in the state of Sao Paulo on Thursday have asked for former Brazilian president Luiz Inacio “Lula” da Silva to be charged with money laundering, accusing the former left-wing president of concealing ownership of a luxury seaside apartment in the city of Guaruja.

The allegations against Lula – a towering political figure in Latin America’s largest country – came only days after he was named in a separate federal probe into a massive corruption scheme involving Brazil’s state-owned oil giant Petrobras.

Federal investigators, who briefly questioned Lula last week, want to determine if the Guaruja apartment was given to the former head of state as a bribe by construction company OAS, one of the companies accused of participating in the Petrobras conspiracy, which is commonly referred to as “Operation Car Wash”.

Lula has categorically denied he owns the luxury home.

The allegations came three months after President Rousseff, Lula’s protégé and hand-picked successor, faced impeachment proceedings based on allegations that she broke the law in managing the country’s budget in 2014.

Opponents of the government have planned huge nationwide rallies on Sunday, when they will once again call on Rousseff to step down. Rousseff and Lula’s supporters, who have also taken to the streets in recent days, say the two Worker’s Party leaders are being singled out by political opponents and powerful media groups as part of a plot to torpedo Brazil’s democracy.

Corruption is nothing new among Brazilian politicians, but amid a recession that threatens to pull millions of Brazilians back into poverty after years of growth, the fate of Rousseff and other leaders may be tied to the economic downturn.

A look at the leaders who are under scrutiny:

Dilma Rousseff

According to Carlos Eduardo Lins da Silva (no relation to the former Brazilian president), a fellow with the Washington-based Brazil Institute, Rousseff is essentially the victim of political “revenge”. Impeachment proceedings against her were abruptly triggered in December after her relationship with Speaker of the House Eduardo Cunha soured. She has been accused of improperly using funds from state banks to plug holes in Brazil’s budget. “She now counters the charges by saying that she repaid all such withdrawals on the last day of 2015, which indeed she did,” Lins wrote in a January report.

Her ability to avoid impeachment now depends on “political negotiations”, according to Oliver Stuenkel, a political analyst at the Fundaçao Getulio Vargas, a Sao Paulo-based think tank. An impeachment requires a two-thirds majority in congress, and even the date of the vote is up for congressional debate.

While Rousseff’s popularity has plummeted among voters, she still enjoys support from important sections of Brazilian society. Most of the trade unions, NGOs and social movements, as well as her party – still the country’s second-largest – back the president, noted Lins.

Lawmakers might be less inclined to support Rousseff if public opinion turns against the president and her Worker’s Party. But securing a two-thirds majority would still be “very difficult” for Cunha and thus Rousseff’s impeachment appears “improbable”, Stuenkel told FRANCE 24 by telephone.

No links between Rousseff and the expanding Petrobras scandal have been established by investigators so far, but she was chairman of the state-run company during much of the period when the corruption is alleged to have taken place.

‘Lula’ da Silva

Besides the allegations that Lula had an undeclared seaside apartment, investigators are also trying to determine if he had a secret country home and if he peddled his influence with the current administration in exchange for speeches and donations to the non-profit foundation bearing his name.

While the accusations against Lula could carry jail time, it is unlikely the former president will find himself behind bars anytime soon. “The full investigation into Operation Car Wash could take years, even up to a decade,” Stuenckel said. The short-term consequences appear to be political for Lula, who has flirted with the idea of running for president in 2018.

Meanwhile, there is growing pressure from Rousseff’s allies to appoint Lula to a cabinet post, a move that would give him immunity from state prosecutors. As a government minister Lula could only be tried by the Supreme Court, in accordance with a stipulation in the Brazilian constitution.

Eduardo Cunha

Operation Car Wash may spell trouble for Lula and eventually Rousseff herself, but it threatens to bring down a slew of politicians from across Brazil’s political spectrum. Speaker of the House Cunha, who inspired the opposition by launching impeachment proceedings against Rousseff last year, is among them.

The Supreme Court voted last week to put the powerful politician, known for his crafty backroom dealings, on trial for graft. The court’s 10 judges voted unanimously to indict Cunha on charges that he took the bribes for facilitating a $1 billion contract to build two oil drilling ships for Petrobras.

Cunha, who also rejects the charges, is also facing censure by the congressional ethics committee over allegedly lying under oath. He denied owning secret overseas bank accounts, but those funds have since surfaced during investigations by Swiss and Brazilian authorities.

He has remained in his powerful position thanks to congressional immunity, but his time may be running out. “Most observers expect Mr. Cunha to be gone from his job earlier than the president,” said Lins, of the Wilson Center.

It’s an opinion shared by Stuenckel. “I think he will be out of a job in the next few months,” he said.

Date created : 2016-03-10


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