Business Day

Brazil’s Lula accused of leading Petrobras graft

- SERGIO SPAGNUOLO Curitiba

BRAZILIAN prosecutor­s charged former president Luiz Inacio Lula da Silva on Wednesday with being the “boss” of a corruption scheme at state oil firm Petrobras, in a major blow to the leftist hero’s hopes of a political comeback.

It was the first time Da Silva (known as Lula) — still Brazil’s most popular politician despite corruption accusation­s against him and his Workers Party — was charged by federal prosecutor­s for involvemen­t in the political kickbacks scheme at Petroleo Brasileiro, as the company is officially known.

Public Prosecutor Deltan Dallagnol told a news conference that Lula will be charged with corruption and money laundering for leading a kickback scheme that caused an estimated 42billion reais ($12.5bn) in losses to Petrobras shareholde­rs and taxpayers.

“He was the conductor of this criminal orchestra,” Dallagnol said during a presentati­on of the investigat­ion.

“The Petrobras graft scheme aimed at keeping the Workers Party in power by criminal means.”

Lula’s lawyers said the accusation­s, were a political ploy to stop him running in the 2018 election.

“This Lula-centred farce was trumped up as an affront to the democratic state and intelligen­ce of Brazilian citizens,” one of Lula’s lawyers, Cristiano Zanin, told reporters.

Dallagnol stopped short of saying investigat­ors would seek an arrest order for Lula, who became a hero to many Brazilians during his 2003-10 term.

The two-year-old Operation Carwash anticorrup­tion investigat­ion has uncovered how political appointees named by Lula’s Workers Party and its allies handed overpriced contracts to engineerin­g firms in return for illicit party funding and bribes.

The scandal helped topple the Workers Party from power in August by crushing the popularity of Lula’s chosen successor, Dilma Rousseff. She was impeached by Congress on unrelated charges of breaking budget rules, amid rising anger over her handling of Brazil’s worst recession since the 1930s.

Dallagnol said Lula, because of his control of the machinery of the Workers Party and the Brazilian government, was the central figure in the scheme.

Prosecutor­s allege that the former union leader had personally received some 3.7-million reais in bribes, including a luxury apartment on the coast of São Paulo from OAS, one of the engineerin­g and constructi­on firms at the centre of the bribery scandal.

Lula has denied ownership of the three-floor apartment in Guarujá.

Lula’s case will go before crusading anticorrup­tion judge Sergio Moro, who has jailed dozens of executives and others involved in the scheme.

Former first lady Marisa Leticia Lula da Silva has also been charged.

Lula has separately been indicted by a court in Brasilia for obstructio­n of justice in a case related to an attempt to persuade a defendant in the Petrobras scandal not to turn state witness.

Lula has not ruled out running again for president in 2018, but a criminal conviction would bar him from being a candidate for the next eight years.

His fall, as well as that of the leftist party he founded in 1980, has been dramatic. A one-time shoeshine boy and union leader who led massive strikes against Brazil’s military dictatorsh­ip, contributi­ng to its downfall, he was elected the nation’s first working-class president in 2002.

Wildly popular with Brazil’s poor, Lula’s social policies helped yank millions out of poverty and into the middle class, and he left office in 2010 with an 83% approval rating and an economy that grew at a blistering 7.5%.

But two years ago, as the Petrobras probe became public, prosecutor­s began to slowly put Lula in their crosshairs.

Many prosecutor­s and investigat­ors say they cannot imagine such a powerful figure was unaware of the institutio­nalised corruption and political kickbacks taking place at Petrobras and other state-run companies.

Marcos Troyjo, a former Brazilian diplomat and codirector of Columbia University’s BRICLab in Rio de Janeiro, said he thinks Wednesday’s charges are the first of many Lula will be facing in the coming months.

“That means the Workers Party, which may have thought it would move comfortabl­y into the opposition after Dilma’s impeachmen­t, will confront extreme challenges. It’s certainly the beginning of the end to Lula’s presidenti­al aspiration­s for 2018,” he said.

Recent polls have shown that despite the investigat­ions, Lula would be a favourite to win the next election.

“But these charges are likely too big a blow to the political myth of Lula, to the candidate Lula and to the Workers Party as a whole for that to happen,” Troyjo said.

 ??  ?? Luiz Inacio Lula da Silva
Luiz Inacio Lula da Silva

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