Lula arrest deepens political divide

By Dom Phillips

Corruption charges against former President add fuel to Brazil’s social, health and economic crises, writes Dom Phillips.
Brazil's former President Luiz Inacio Lula da Silva is surrounded by supporters as he leaves the Workers' Party building in Sao Paulo. Picture / AP
Brazil's former President Luiz Inacio Lula da Silva is surrounded by supporters as he leaves the Workers' Party building in Sao Paulo. Picture / AP

A corruption scandal that has entangled the highest echelons of power is sharply dividing Brazil, which is already grappling with an economic crisis and a public health emergency over the Zika virus.

Now it has reached Luiz Inacio Lula da Silva, who was Brazil's most popular President in decades.

On Thursday, state prosecutors filed money-laundering and misrepresentation charges against Lula in a related but separate case involving executives of one of the companies implicated in the scandal. Yesterday they requested his arrest, saying he should be placed in "preventive custody".

And with anti-Government demonstrations looming tomorrow, nervous Brazilians are wondering: What's next?

Last week, police in Sao Paulo detained Lula, as the charismatic former union leader is known in Brazil, for questioning in a sprawling federal investigation into billions of dollars in bribes, kickbacks and favours offered to executives, political parties and lawmakers for valuable contracts with the state-controlled oil company, Petrobras.

Lula was not charged then, but people were shaken by the sight of this political icon being led from his house by police, a spectacle that was broadcast live on Brazilian television.

"It is difficult to convey the symbolism of this gesture," said Jairo Nicolau, a professor of political science at the Federal University of Rio de Janeiro.

"Lula is still the biggest leader in Brazil."

The targeting of Lula also potentially hurts Dilma Rousseff, his political protege and successor as President.

She was narrowly re-elected in 2014 with his support but is facing impeachment proceedings and an investigation by an electoral court.

The federal investigators who detained Lula last Saturday are looking into a country estate used by him and his family, as well as a seaside apartment.

They allege that Lula hid his ownership of the properties and that construction companies caught up in the scandal did extensive work on the properties in return for political favours. Lula denies the charges.

In a video interview released on YouTube, Lula's lawyer, Cristiano Martins, said the ex-president's family acquired a share of a building being constructed by a housing co-operative but chose not to buy the seaside apartment after the construction firm OAS took over the co-operative's properties. Martins said the estate was renovated for the use of friends and that Lula considered storing some of his presidential records there.

Investigators are also examining US$8 million ($11.9 million) in speaking fees and donations that Lula and his Lula Institute received from construction companies embroiled in the scandal.

On Thursday, Sao Paulo state prosecutors filed charges against Lula, his wife and one of their sons in a separate case that also involves executives from OAS, one of the main companies involved in the Petrobras scandal. A judge has to approve the charges.

Charges were also filed against OAS's former chief executive and the former treasurer of Lula's Workers' Party - both of whom have received jail sentences in the Petrobras scandal.

The allegations against Lula have angered his supporters, who say Brazil's rich and powerful are seeking to destroy his reputation and a potential shot at a third presidential term.

An emotional and combative speech by the former President on March 5 has deepened the divide.

"This is the class struggle, yes. This theme is not over," Leonardo Boff, a left-wing writer and proponent of Catholic "liberation theology", wrote on a pro-Government website.

Conservative, white, upper-class Brazilians - many of whom loathe the Workers' Party and have played a big role in anti-Government demonstrations - have responded with equal vitriol.

Hundreds of thousands of Brazilians - many from more privileged classes - took to city streets nationwide several times last year to protest against corruption and call for Rousseff's impeachment and Lula's imprisonment. More protests are planned for tomorrow.

"Lula manipulates and deludes the people," said Giuliana Campanari, 43, director of a Sao Paulo advertising agency and a protest regular.

She said his Workers' Party was motivated by greed, not ideology. "They are vermin. They finished off the country," she said.

Some commentators criticise the heightened rhetoric and worsening polarisation.

"This climate of hysteria is reciprocal. It contaminates both sides of the debate," popular broadcaster Ricardo Boechat said in a radio commentary.

Experts say the corruption probe is being properly handled.

"What we are seeing is very strong people who are doing their job right," said Alejandro Salas, regional director for the Americas at Transparency International, a Berlin-based group that studies corruption.

Since Operation Carwash, as the investigation into bribes and kickbacks at Petrobras is called, beganin March 2014, prosecutors have charged 179 people. The scheme led the company to write off US$2 billion.

The investigation has since expanded to target Brazil's notoriously corrupt politicians: The Supreme Court is investigating an additional 94 people, mostly lawmakers, including the Speaker of the lower house of Parliament, Eduardo Cunha, who faces corruption and money-laundering charges.

"We can see we are reaching a point at which the law really does apply to all," said Gustavo de Oliveira, a law professor at the University of Sao Paulo who teaches a course on corruption.

Lula, a former metalworker who grew up in deep poverty, presided over dramatic social change.

During his 2003-11 rule, more than 30 million Brazilians escaped poverty and joined a nascent lower middle class as their country rode a commodities boom. He came to represent a future that Brazilians thought would never be theirs - in which the poor, too, could live in decent houses, work for just salaries and rely on a functioning healthcare system.

Lula also appeared to embody a new breed of politician - one who could be trusted. Now, many disappointed Brazilians are not so sure.

"He promised an honest and transparent Government. And you see this, it's sad," said Adilson dos Santos, 53, a telecommunications technician in Recife, capital of Lula's home state of Pernambuco, who voted for him and Rousseff.

"He has lost a little credibility for everything that he did."

Rousseff, whose approval ratings have plummeted despite her insistence that she is "not guilty" in the corruption scandal, also looks increasingly fragile. The economy is tanking, and some blame years of neglect for the Zika epidemic - which many say is behind the recent jump in cases of microcephaly, a birth defect, in Brazil.

"I think she will fall," said Nicolau, the political scientist. "It is not possible for the country to continue without a solution, and the solution becomes her removal."

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