More heads look set to roll in Brazil, as former president Luíz Inácio Lula da Silva was hauled over the coals yesterday on charges of money laundering and misrepresentation of assets. The allegations, brought by public prosecutors in the state of São Paulo, relate to an apartment in the upscale, coastal municipality of Guarujá – inhabited by Mr. da Silva and his family, it is claimed that the triplex penthouse was purchased and renovated for the ex-premier by construction firm OAS, with financing for the home improvements possibly coming from funds acquired through corruption at state-owned oil giant Petrobras.
Mr. da Silva has denied the charges, suggesting they are politically motivated.
Given the venerated status of “Lula” on the Brazilian political scene and his popularity among ordinary Brazilians, few observers foresaw this turn of events before his home was raided by police last week.
Twice leader of the ruling Workers’ Party – Partido dos Trabalhadores – between 1981 and 1994, he still wields unparalleled influence on the left of the Brazilian political spectrum. Moreover, as President of Brazil from 2003 to 2011, his ministry oversaw rapid economic growth coupled with increased social spending through the Bolsa Família and Fome Zero campaigns, not to mention putting the nation in the global spotlight with successful bids for the 2014 World Cup and 2016 Olympic Games in Rio de Janeiro.
But Operation Car Wash – Operação Lava Jato – doesn’t much care for social or political legacies. The judicial probe into allegations that senior government figures and Petrobras executives accepted bribes from construction firms in return for contracts at inflated prices has already placed $22bn of deals under investigation.
And Lula is certainly not the first PT grandee to be embroiled in a scandal that has left the party’s PR team playing a game of Reputational Damage Whack-a-Mole: former presidential Chief-of-Staff José Dirceu – already under house arrest for his involvement in the earlier Mensalão scandal – was re-arrested in August on more topical corruption charges, while ex-PT Treasurer João Vaccari Neto was handed a 15 year jail term in September.
Only incumbent President Dilma Rousseff – herself on the Board of Directors of Petrobras when the alleged corruption took place – seems to be weathering the storm any success: mooted efforts to impeach her have hit the legislative rocks just as her meagre approval ratings have “bounced” to a stately 12%.
Yet set against the backdrop of the Brazil’s worst recession in 25 years and looming questions over the readiness of many Olympic venues ahead of the games in August, the timing of this latest arrest could hardly have come at a worse time for the nation’s establishment.
As an investigation that has already resulted in the arrest and imprisonment of some of the country’s most prominent captains of industry now appears to have snared its foremost political figure of the last 30 years, one question seems increasingly apposite: Just how deep does the rot go?