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Brazil’s ex-president Lula charged with corruption in oil kickback scandal

Luiz Incio Lula da Silva, his wife and six others charged over scheme at state-run oil company Petrobras, dealing a big blow to his chances of a comeback

Brazilian prosecutors have charged ex-President Luiz Incio Lula da Silva with being the maximum commander of a vast corruption scheme at the state oil company, Petrobras, in a major blow to the leftist heros hopes of a political comeback.

This marks the first time Lula, still Brazils most popular politician despite corruption accusations against him and his Workers party, has been charged by federal prosecutors for his involvement in the massive graft scheme at the oil company.

Deltan Dallagnol, a public prosecutor, told a news conference that the Petrobras scheme had caused an estimated 42bn real ($12.6 billion) in losses. Lulas lawyers said in a statement that prosecutors lacked evidence to back up their accusations, which were part of political persecution to stop him running in the 2018 election.

Dallagnol said Lula, who became a hero to many poor Brazilians during his 2003-10 government, was being charged with corruption and money laundering as part of the scheme. He was the conductor of this criminal orchestra, Dallagnol said during a detailed presentation of the investigation. The Petrobras graft scheme aimed at keeping the Workers party in power by criminal means.

The two-year-old Operation Carwash anti-corruption investigation, based in the southern Brazilian city of Curitiba, has uncovered how political appointees named by Lulas Workers party and its allies handed overpriced contracts to engineering businesses in return for illicit party funding and bribes.

The scandal helped topple the Workers party from power last month by crushing the popularity of Lulas chosen successor, Dilma Rousseff. She was impeached by congress on unrelated charges of breaking budget rules, amid rising anger over her handling of Brazils worst recession since the 1930s.

Dallagnol said that Lula, because of his control of the machinery of the Workers party and the Brazilian government, was the central figure in the scheme.

Prosecutors allege that the charismatic former union leader had personally received around 3.7m reals ($1.11m) in bribes, including a luxury apartment on the coast of So Paulo from one of the engineering and construction firms at the centre of the bribery scandal, OAS.

Lula, a charismatic former union leader who was a two-term president from 2003 to 2010, has separately been indicted by a court in Braslia for obstruction of justice in a case related to an attempt to persuade a defendant in the Petrobras scandal not to turn states witness.

Cartoon images of Luiz Incio Lula da Silva in prison garb and Dilma Rousseff stand inside a mock jail during a protest. Photograph: Eraldo Peres/AP

Lulas fall, and that of the leftist party he founded in 1980, has been dramatic. Last month, his protg and successor as president, Dilma Rousseff, was removed from office in an impeachment trial.

Rousseffs fall was driven by Brazils recession and its biggest ever corruption scandal, which has implicated dozens of politicians from her ruling coalition, including several in the Brazilian Democratic Movement party led by the countrys current president, Michel Temer.

Lula, 70, has not ruled out running again for president in 2018 but a criminal conviction would bar him from being a candidate for the next eight years. A former shoeshine boy and union leader who led massive strikes against Brazils military dictatorship, contributing to its downfall, he was elected the nations first working-class president in 2002 after three failed campaigns.

Lulas social policies helped yank millions out of poverty and into the middle class and he left office in 2010 with an 83% approval rating and an economy that grew at a blistering 7.5%.

Two years ago, as the Petrobras investigation became public, prosecutors began to slowly put Lula in their crosshairs. Many prosecutors and investigators say they cannot imagine such a powerful figure was unaware of the institutionalised corruption and political kickbacks taking place at Petrobras and other state-run companies.

Marcos Troyjo, a former Brazilian diplomat and co-director of Columbia Universitys BRICLab in Rio de Janeiro, said he thinks Wednesdays charges are the first of many Lula will be facing in the coming months. That means the Workers party, which may have thought it would move comfortably into the opposition after Dilmas impeachment, will confront extreme challenges, Troyjo said. Its certainly the beginning of the end to Lulas presidential aspirations for 2018.

Recent polls have shown that despite the investigations targeting Lula and the Workers party, he would be a favorite to win the next presidential election by far the Workers partys best hope of regaining power. But these charges are likely too big a blow to the political myth of Lula, to the candidate Lula and to the Workers party as a whole for that to happen, Troyjo said.

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