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CORRUPTION-BRAZIL: Lula Remains Bullet-Proof as Scandal Rages On
Analysis by Mario Osava
RIO DE JANEIRO, Aug 1, 2005 (IPS) - Despite growing evidence of corruption in
Brazil's ruling Workers Party, there is little doubt that President Luiz
Inácio Lula da Silva will remain safely in power until the end of his term
in January 2007, especially now that even the opposition is striving to
shield him from the fallout of the ongoing scandal.
Party leaders from one end of the political spectrum to the other have begun
working together to keep the crisis under control, because it has reached
such a dimension that "from this point forward, everyone would lose," said
political analyst Wanderley Guilherme dos Santos.
Even the chief justice of the Brazilian Federal Supreme Court, Nelson Jobim,
has joined the efforts to seek conciliation. During informal talks with a
group of political leaders, Jobim warned of the dangers involved in seeking
to impeach the president, whose leftist Workers Party (PT) is facing a host
of allegations of corruption, from bribing members of Congress to illegal
campaign financing.
According to the chief justice, initiating impeachment proceedings in
Congress would create an untenable climate of confrontation, given Lula's
continued personal popularity and strong base of support, making the country
ungovernable for years to come.
Jobim speaks from his own experience as a former lawmaker and minister of
justice. He has also been identified by many as a likely presidential
candidate for the 2006 elections, one who would be able to unite various
centrist forces around the Brazilian Democratic Movement Party, of which he
was an influential member before leaving politics for the judiciary.
In the meantime, the right-wing opposition Liberal Front Party (PFL), which
had been threatening to pursue impeachment proceedings against the
president, has now backed down and adopted a more conciliatory attitude.
"No actions will taken to interrupt Lula's term and worsen the crisis,"
pledged Senator Heráclito Fortes, a PFL leader.
Efforts by diverse sectors to seek a consensus aimed at riding out the
crisis were stepped up after an alarming drop in both the Sao Paulo stock
exchange and the real (the local currency) early last week. These were
interpreted as warning signs of the potentially disastrous effects of the
corruption scandal on the financial market.
The threat of economic turmoil, capital flight and a freeze on productive
investment has shaken up those who continued to believe that the economy was
immune to the scandal hanging over the PT, a number of allied and opposition
parties, and the Brazilian Congress.
Moreover, as investigations into what has become a spate of alleged
wrongdoings continue to move forward, numerous opposition parties have been
given even more reason to hold their fire against Lula and the PT.
The ongoing investigations - which now involve three congressional inquiry
commissions, the Federal Police and the Attorney General's Office - have
revealed that leaders of the opposition Brazilian Social Democratic Party
(PSDB), and particularly its president, Eduardo Azeredo, were among the
recipients of illegal funds from advertising executive Marcos Valério, who
has emerged as a central figure in the current crisis.
Valério is believed to have channelled hundreds of millions of dollars
through his advertising companies in backdoor business deals with political
parties, public companies and government officials since 1998.
He has admitted to obtaining 16 million dollars in bank loans that were
funnelled to the PT, but the investigations show that much larger sums were
diverted and handed over in cash to dozens of lawmakers and political
leaders.
Many have come to suspect that the huge sums involved included funds
diverted from public companies and undeclared political contributions from
the private sector, which Valério's companies were subsequently used to
"launder" and distribute.
PSDB president Azeredo is alleged to have received at least 3.7 million
dollars through these channels to finance his unsuccessful bid for
re-election as governor of the southeastern state of Minas Gerais in 1998.
In addition, one of Azeredo's closest aides was named financial director of
SMPB, an advertising firm owned by Valério and used for many of the illegal
financial operations now under investigation.
José Pimenta da Veiga, another PSDB leader and former minister of
communications under the previous administration, also received money
through the scheme managed by Valério.
In fact, there is growing evidence that this intricate network of illegal
campaign financing and purported corruption on the part of state company
officials and party leaders actually originated with the PSDB in Minas
Gerais, and subsequently expanded when the PT took power.
And if the ongoing investigations reveal that the corruption extended to
pension funds from public and privatised companies, as many suspect, both
parties could be implicated in even further irregularities.
It was during the administration of Lula's predecessor, Fernando Henrique
Cardoso (1995-2003) of the PSDB, that a large number of state-owned
companies were privatised, and the pension funds from these firms are now
managed by banks with close links to the PT.
At least one lawmaker from the PFL, the country's second most powerful
opposition party, has been revealed as a beneficiary of the illicit
financial scheme, while two other PFL deputies were caught earlier this
month trying to smuggle large sums of cash out of the country on an
airplane.
The two claimed that the money belonged to the Universal Church, a
Protestant denomination in which they are both "bishops", and had come from
tithes paid by parishioners. This justification, however, did not spare them
from being expelled from the party.
The blot of corruption has come to stain so many parties in Brazil that it
is clearly in everyone's best interest to find the least traumatic solution
possible to the current crisis.
Moreover, a Congress weakened by evidence of corruption that could take down
dozens of lawmakers would obviously lack the credibility and political
capacity to pass judgement on Lula.
As a result, the president appears to be shielded from this hail of
corruption allegations, thanks to a combination of his continued personal
popularity, the fear of economic upheaval, and the severely compromised
moral authority of those who might have challenged him.
(END)
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