Brazil opens corruption probe against ex-president Lula

Brazil opens corruption probe against ex-president Lula

Brazil's corruption-fueled political crisis ramped up Thursday when prosecutors announced a probe into possible influence peddling by former president Luiz Inacio Lula da Silva.

The investigation will center on Lula's alleged use of his clout after leaving office to help scandal-ridden construction giant Odebrecht land billion-dollar contracts in Latin America and Africa.

The targeting of the once highly popular Lula opened a new front in the ever-widening political turmoil in Latin America's biggest country, coming as his successor Dilma Rousseff faced new impeachment threats -- and one of her main foes was himself accused of demanding a $5 million bribe.

Prosecutors had announced in May that they were considering the probe into Lula, but it was only launched July 8 and made public Thursday.

"There is an investigation into possible influence peddling by ex-president Lula with the leaders of other countries on behalf of the construction company Odebrecht," a spokesman for the federal prosecutor's office in the capital Brasilia confirmed.

Lula's foundation immediately issued a statement saying he had nothing to fear.

"We are calm. The Lula Institute is certain of the transparency and legality of ex-president Lula's activities," spokesman Jose Chrispiniano said.

- Peddling or just boosting? -

According to the prosecutor's office, Lula's alleged influence peddling took place between 2011 and 2014. That is after Lula left office and was replaced by his hand-picked Workers' Party successor, Rousseff.

But as an ex-president, Lula retained his status as a major world figure and the face of commodity-rich Brazil's rise to economic power.

A report in Epoca magazine in May said that Odebrecht, Brazil's biggest construction company, had paid Lula to use his influence on its behalf in Cuba, the Dominican Republic, Ghana and Venezuela.

He is also alleged to have helped persuade the Brazilian state-owned development bank BNDES to finance the foreign projects.

Odebrecht, which does everything from building airports to deep water oil drilling and mining, has said there was nothing untoward in the powerful ex-president's involvement as a booster for Brazilian business.

Brazil's political and elite business circles have already been thrown into commotion by Operation Car Wash, a huge investigation into a bribes-and-kickbacks network that saw companies including Odebrecht bribe politically connected executives at state oil giant Petrobras to grant inflated contracts.

Rousseff, chairwoman of Petrobras for seven years, has not been directly implicated in the scandal but there are mounting calls for her resignation or impeachment.

Some of the money allegedly went into the Workers' Party campaign coffers.

- Corruption claims fly -

Almost every day sees a new development in the Car Wash probe, so called because some of the stolen money was allegedly laundered through a service station.

On Tuesday, police shifted focus from former executives to sitting politicians, including former president Fernando Collor de Mello, confiscating a Ferrari, Porsche and Lamborghini from his property. Collor, currently a senator, himself had to resign as president in 1992 because of a corruption scandal.

Then late Thursday, hours after news about Lula broke, the powerful leader of Brazil's lower house of Congress, Eduardo Cunha, was accused by a jailed former consultant of having demanded a $5 million bribe as part of the Petrobras scheme.

The allegation, given during evidence by Julio Camargo, who is cooperating with prosecutors, was aired on national television.

Cunha, meanwhile, had earlier in the day again raised the threat of impeaching Rousseff, saying he was consulting with lawyers and would reach a decision within 30 days on whether to proceed.

Brazil, the world's seventh biggest economy, gained a high profile under Lula. Wealth from booming commodity prices and soaring Chinese demand helped fund historic advances in the battle to reduce poverty across the country of 202 million people.

But the party is over in Brazil and Thursday's revelation of the criminal probe into Lula illustrates the rapid downward spiral.

For Gil Castello Branco, whose Contas Abertas group pushes for transparency in public finances, the latest mess has a positive side.

"This probe shows that the institutions are functioning. It is fundamental in a democratic country," he said.