Brazil’s ex-president Lula to be questioned about Petrobras corruption

A Brazilian government shake-up designed to head off efforts to impeach president Dilma Rousseff has been overshadowed by a supreme court ruling that former president Luiz Inácio Lula da Silva – known as Lula – can be questioned about his knowledge of corruption in Petrobras.

Federal police want to interview Lula to see if he personally or his government benefited from the illicit multibillion-dollar scheme inside the state-controlled oil giant. Their request was backed by the country's chief federal prosecutor, Rodrigo Janot, who made clear Lula is only a witness in the case and not under investigation.

Dozens of politicians face charges for their role in the scandal, including Lula’s former right-hand man, José Dirceu, while last month the ruling Workers Party’s treasurer was jailed for 15 years for his participation in the scheme.

The supreme court ruling on Lula further undermines efforts by the Workers Party to prevent the scandal from engulfing the administration of Ms Rousseff, who is battling efforts in congress to impeach her.

She announced a cabinet reform last Friday ostensibly to demonstrate the federal government’s determination to cut spending in the face of a deepening recession. She cut the number of ministries by eight, two fewer than promised, to 31; reduced by 3,000 the number of presidential appointments; and announced a 10 per cent pay cut for herself and ministers.

The move bought the president some immediate relief as her coalition allies said they would now support an unpopular new tax designed to plug a widening fiscal deficit.

Rebellious coalition allies

But the main goal of the reshuffle was to try to shore up her support among rebellious coalition allies in congress ahead of a possible impeachment vote. To do so, she reduced the number of portfolios in the hands of her Workers Party at the expense of the deeply corrupt populist Democratic Movement of

Brazil

(PMDB).

There had been mounting support among the PMDB’s members for the president’s removal. In a bid to quell the disquiet. Ms Roussseff has handed the scandal-plagued party control over the largest slice of Brazil’s federal budget.

In a bitter blow resented by her own party militants, the president transferred the largest spending ministry – health – from the Workers Party to the PMDB. Her desperation to save her job was made clear by the decision to name PMDB deputy Celso Pansera the new minister of science and technology, despite his having been named in the Petrobras scandal.

Ms Rousseff had previously said she would “cut her own flesh” to root out corruption. But one of the black-market operators already convicted in the Petrobras case described the new science minister as the “gofer” of Eduardo Cunha, the president of the lower house of congress who is accused of taking a $5 million bribe.

Mr Cunha cancelled a trip to Europe this week after Switzerland froze bank accounts it said were used by him to hide the money he was allegedly paid in return for helping companies win Petrobras contracts. Despite being one of the PMDB’s leaders Mr Cunha broke with Ms Rousseff earlier this year and is threatening to bring a formal request for impeachment to a vote in the lower house.

The cabinet reshuffle also saw the president cede space within her own administration to Lula, who has become increasingly exacerbated by his protégé’s inability to extricate herself from political and economic crises.

Ms Rousseff was forced to demote her close confidant, Aloísio Mercadante, who was blamed by Lula for much of the presidential palace’s political ineptitude since Ms Rousseff won re-election last October, from the powerful post of cabinet chief. He is replaced by Jaques Wagner, promoted from defence, who is close to the former president.

Influence-peddling

In a separate development last week, one of Lula’s children was linked to influence-peddling during his father’s presidency.

Citing documents it had obtained, the Estado de S Paulo newspaper claimed that a sport's consultancy founded by Luís Cláudio Lula da Silva received more than half a million euro from another consultancy now accused of paying bribes to secure tax exemptions for Brazil's car manufacturers.

Mr Da Silva acknowledged the payments but claimed they were for “sports marketing” for Marcondes and Mautoni, a political lobbying firm named earlier this year in a separate multibillion-dollar tax-evasion scandal, also involving car makers.