[Marxism] Brazil: Amid Scandals, Lula Remains Bullet-proof

Walter Lippmann walterlx at earthlink.net
Mon Aug 1 21:44:54 MDT 2005

(A more critical report was also published
today by COHA, the Council on Hemispheric
Affairs. It's also longer and provides 
more details. We'll see how this corruption
scandal unfolds over time, and if the kind
of assessment we get hear pans out. So far,
however, no one has caught Lula with his
hands in the cookie jar.)

Via NY Transfer News Collective  *  All the News that Doesn't Fit
InterPress Service - Aug 1, 2005

Lula Remains Bullet-Proof as Scandal Rages On

Analysis by Mario Osava

RIO DE JANEIRO, Aug 1 (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 

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.
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