There is evidence that Brazil’s former president benefited from the corruption scheme at Petrobras, which he has also been accused of masterminding. Could this be the beginning of the end for the man who was once the most popular politician in the world?
Allegations have been following him around for years, but it was not until this week that corruption charges were formally filed against 70-year-old former Brazilian president Luiz Inacio Lula da Silva. Prosecutors in the Lava Jato investigation have charged him with receiving 3.7 million reais in illicit benefits derived from corruption at state-owned oil company Petrobras. This represents another dramatic chapter in the rise and fall of a man who started out as a factory machinist, rose to prominence as a union leader, and was for a time the president with the highest approval ratings in the world.
The charges center on his allegedly undeclared ownership of a property, an ocean-front three-floor apartment in the coastal São Paulo city of Guarujá. The apartment is said to have been a gift to Lula and his wife, Marisa Leticia, from the construction company OAS, which is one of the contractors deeply involved in the multi-billion dollar bribe and kick-back scheme at Petrobras. In exchange, prosecutors allege that OAS received preferential treatment in bids for government contracts, obtaining 87 million reais in benefits. The prosecutors have cited as evidence photographs and documents recovered through the investigation and police raids.
The story goes something like this. The apartment in question is located in a high-rise condo construction project first developed by a cooperative of union workers. Lula had originally reserved and made payments toward one of the units in the building that was to be constructed. After years of delays and financial difficulties, however, the project was taken over and completed by OAS. At that point, documents indicate that Lula and his wife stopped making payments and were given use of the building’s penthouse, which was much more valuable than the unit they had originally reserved. OAS then went on to make extensive renovations to the triplex apartment costing over a million reais.
Although the penthouse is technically registered as belonging to OAS, documents found in police raids indicate that it actually belongs to Lula. Further, it was never advertised as “for sale,” as were the other apartments in the building, and was labeled in internal records as “reserved.” Lula and his wife are known to have visited the apartment several times prior to and during the renovations, which were allegedly done to the couple’s specifications. Between the value of the apartment itself and the renovations, Lula and his wife are accused of receiving over 2.4 million reais in benefits.
In addition to the documents indicating Lula’s ownership of the apartment, photographs taken during police raids also show boxes with the former president's belongings labeled “beach house.” Indeed, as part of their presentation on the charges against Lula, prosecutors stated that OAS also paid for the moving company after Lula and his wife left the official presidential residence. Further, documents indicate that when the couple placed many of their belongings into storage, OAS also took care of the bill. The move and over five years of storage fees cost OAS over 1.3 million reais.
All in all, the prosecutors say that Lula and his wife obtained 3.7 million reais in benefits from OAS while the company, thanks to Lula’s influence, received benefits worth over 87 million reais from the government. This may seem like small potatoes compared to the overall scale of the multi-billion dollar corruption at Petrobras, but the prosecutors went one step further in also accusing Lula of masterminding the whole scheme.
Calling him the “commandante máximo”, the prosecutors alleged that Lula was the link between all the elements of the Petrobras corruption scheme, in which the company lost 6 billion reais to bribes and kick-backs. Some of that money ended up in the pockets of well-placed executives and politicians, while the remainder was funneled into Lula’s Workers’ Party and its allies (including the Democratic Movement Party of now-president Michel Temer, who replaced Lula’s handpicked successor Dilma Rousseff after her impeachment). Inventing a new word, the prosecutors characterized Brazil under Lula and his party as a propinocracia, or “bribe-ocracy,” in which graft was not an exception but rather the rule as the primary tool of governance.
The Petrobras scheme was also linked to a previous scandal, the Mensalão, which was discovered during Lula’s first term. Lula’s chief of staff, José Dirceu, was found to have orchestrated a vote-buying system in which members of Congress received monthly stipends to support the president’s agenda. In prison for that corruption scheme, Dirceu is now also being investigated in the Petrobras scandal. The prosecutors referred to the Mensalão and the corruption at Petrobras as two sides of the same coin.
The presentation in which the prosecutors laid this out has shaken Brazil. Many have cheered the fact that a man previously considered to be untouchable is finally being brought to justice. However, Lula remains a popular political figure, and his supporters have criticized the prosecutors for presenting what they perceive to be scant evidence.
The amateurish look of the prosecutors’ power point presentation has also been excoriated. Shortly after the presentation aired on television, memes began proliferating on the Brazilian internet making fun of the embarrassingly unsophisticated and sometimes confusing and typo-ridden slides.
In a televised response, Lula denounced the accusations as political revenge and once again repeated what has been his main defense since allegations started swirling: that he is being punished by the “elites” for having helped Brazil’s poor. Using all of the populist firebrand weapons in his arsenal, he wept and stated his pride in having helped to found “the most important leftist party in South America.” Having previously claimed to be “the most honest soul in Brazil”, he now said that “no one respects the law as much as me” and that in terms of honesty and popularity, “only Jesus beats me”. He said prosecutors had found any proof that he is corrupt, he would willingly make the trip to prison “on foot”.
Lula has repeatedly denied wrongdoing and claimed he is a victim of a witch-hunt. He has even appealed to the United Nations Commission on Human Rights, citing political persecution. Despite all the problems he and his party have been facing in recent years, Lula is planning on running for president again in 2018 and current polls indicate he would be a strong contender. Indeed, he has repeatedly stated that all the corruption allegations against him personally are an effort by the opposition to disqualify him. Although he certainly still has some fervent supporters, it seems likely that the current situation will foil his ambitions for a continued political career. Still, Lula is a fighter who has managed to revive a flagging political career before. Despite the problems he is facing, the 70-year-old can’t be counted out just yet.
Following the Brazilian judicial process, the charges now have to be accepted by the presiding judge, who would then oversee the trial and sentencing processes. In this case, the judge is Sergio Moro, who has been the driving force behind the Lava Jato corruption investigation over the past few years. He has tended to work quickly and to dole out harsh sentences, imprisoning dozens of politicians and executives. There is speculation that he could place Lula under preventive arrest pending his trial, as he has done with several other prominent figures. It is unclear when Moro will make a decision, but he is expected to start reviewing the charges against Lula next week.
Regardless of how Moro rules in this specific case, Lula is likely to remain in trouble with the law. He is also the subject of another investigation, which seeks to determine whether he was involved in an attempt to interfere with the Lava Jato investigation by bribing a potential informant and helping him flee the country. With all these legal problems, how this Brazilian political giant responds remains to be seen.