Police Question Brazil's Ex-President Lula for Four Hours in Petrobras Scandal Probe

The dramatic events directly tie Luiz Inácio Lula da Silva to the Operation Car Wash investigation into a massive bribes and money laundering scandal involving the state-run oil company that has already led to the arrest of Brazilian politicians.
March 4, 2016, 3:45pm
Photo by Sebastiao Moreira/EPA

He was once hailed as the savior of Brazil — the former trade union leader who grew up in poverty in the harsh northeastern backlands and whose government's wide ranging welfare programs and minimum wage increases improved life for millions. Now former Brazilian president Luiz Inácio Lula da Silva, better known as Lula, is under intense scrutiny.

Lula spent four hours on Friday being questioned by police over alleged corruption in the latest stage of the Operation Car Wash investigation into a billion-dollar bribes and money laundering scandal involving the state-run oil company Petrobras.

The interrogation took place at the same time as police carried out dramatic swoop searches at the Lula Institute, the ex-president's non-profit organization, and visited the home of his son Fábio Luís.

"I think we are going through a process in which the fireworks are worth more than anything else," Lula said in a speech to supporters of his Workers' Party after his release. "What counts most is the show for the media, rather than a serious, responsible investigation, which should be carried out by the courts, the police, the public prosecutor."

The former president said he was "indignant" at the treatment he had received. "They've lit a flame in me that the battle must go on," he said.

"The violence practiced against Lula and his family… is an aggression against the rule of law that affects the whole of Brazilian society," a statement on Lula's Facebook page read on Friday. "The actions of the so-called Car Wash task force are arbitrary, illegal, and unjustifiable."

Operation Car Wash has already targeted a number of leading politicians and business leaders, and is viewed by many in Brazil as proof of the strength and independence of the country's justice system. Others, however, have started to argue that it is now part of a conspiracy to force President Dilma Rousseff and the Workers Party out of office and torpedo Lula's chances of returning for a third term in office in 2018.

Related: Brazil's House Speaker Faces Charges Within the Massive Petrobras Kickback Probe

On Friday morning frenetic activity on Brazilian social media included those celebrating the swoop against Lula and others protesting against what they saw was a form of coup. Pro and anti Lula groups clashed outside Congonhas airport in São Paulo, where the former president was being questioned.

"It's a political spectacle which shows the truth behind the operation, which isn't to reduce corruption, but to target the Worker's Party, Lula, and the government of President Dilma Rousseff," Rui Falcao, the leader of the Worker's Party, said in a statement.

At a press conference following the swoop that saw Lula detained on Friday, Brazilian public prosecutor Carlos Fernando dos Santos Lima said his investigators were focused on around $8 million dollars in supposed donations and fees received by the Lula Institute and LILS Palestras, the company that represents the ex-president's public speaking activities. He said that the payments, made between 2011 and 2014, came from companies involved in the Petrobras scandal.

"Certainly, the government of the ex-president was the main beneficiary of the scheme," he said.

The allegations against the ex-president also involve two properties in the state of São Paulo — an apartment in the beach resort of Guarujá, and a country house in Atibaia.

A statement from public prosecutors earlier this week said that the facts surrounding both properties suggest the "criminal typology of money laundering." The suggestion is that Lula may have received the properties, both of which were later expensively remodeled, through construction companies involved in the Operation Car Wash investigation.

An engineer from one firm embroiled in the Petrobras scandal, Odebrecht, has told the Brazilian press that he carried out work on the Atibaia property, reportedly frequented by Lula and his family, at the request of a senior company executive.

Odebrecht owner Marcelo Odebrecht was arrested in June last year for his involvement in the Petrobras corruption scheme, and other company executives have also been imprisoned.

Lula has insisted that neither property is his. He declared in a statement that his wife Marisa acquired an option to buy an apartment in the building in Guarujá, but did not go through with the purchase.

His legal defense team has stated that the use of the country house, which was also raided by police on Friday, was a gift from a friend and political colleague. Lula says the work on that property was arranged through a third man, José Carlos Bumlai, who is also currently being held by police on charges of money laundering and other financial crimes.

The allegations against the ex-president come at a time when the Worker's Party, which has now been in power for over 13 years, is itself awash with corruption scandals. A number of senior party members have been jailed in the Operation Car Wash probe, including former party treasurer Joao Vaccari Neto.

Worker's Party's marketing guru Joao Santana and his wife were also arrested recently, accused of receiving $7.5 million dollars in overseas payments through the Petrobras bribes racket. Santana oversaw Lula's reelection win in 2006, as well as the current Brazilian president Dilma Rousseff's first victory in 2010.

Related: Brazilian President Dilma Rousseff Reelected in Bitterly Close Race

The questioning of Lula came after an intense 24 hours of political intrigue that began with the publication by popular Brazilian magazine IstoÉ of what it claimed were details of a plea bargain statement by Delcídio do Amaral, a senator from Lula's Worker's Party arrested in the Operation Car Wash swoop.

Extracts from the statement said that both Lula and Rousseff knew about aspects of the Petrobras corruption scheme.

It went further to claim that Lula had asked Amaral to buy the silence of senior Petrobras director Nestor Cerveró, also arrested under Operation Car Wash. Rousseff, meanwhile, had allegedly manipulated the appointment of a high court judge in an attempt to release executives jailed in the Petrobras scandal.

The Lula Institute responded defiantly to the allegations in a statement released on Thursday evening.

"The ex-president has never participated, either directly or indirectly, in any illegal behavior, before, during or after his time in government," the Institute's statement said.

Amaral himself released a statement in which he said he "did not recognize the authenticity" of the documents described in the report.

Regardless of the outcome of the police investigations, the allegations surrounding Lula and his party may already have sullied his reputation enough to deal a fatal blow to his chances of running for election in 2018. Lula himself declared recently that he will stand "if necessary."

Global political risk firm the Eurasia Group stated before this week's events that it believed Lula was no longer a viable candidate for 2018, based on a model that uses approval ratings and other factors to predict electoral outcomes.

"The odds of the Worker's Party remaining in power after 2018 are very low, predominantly because of the economy, but the corruption scandals and what has happened in recent months have added to that," Joao Castro Neves, Latin America director of the Eurasia Group, told VICE News. "The 2014 election was a close call, so there was obviously a sense of fatigue then, and the exhaustion of the growth model and wages not increasing have exacerbated the situation."

A recent survey by the Datafolha agency, again before this week's revelations, found that the majority of Brazilians believe that Lula benefited from the construction companies in the cases of the apartment and country house, and that he had helped the firms involved in return.

Another poll by the same agency found that 49 percent of Brazilians said they would not vote for Lula in the 2018 presidential elections. A survey by the IPSOS market research company found that only 25 percent of Brazilians consider Lula an honest politician.

Lula, his supporters, and some independent observers, have suggested that the corruption allegations are the work of a conspiracy led by the Brazilian media and his political rivals.

Related: Here's Why Everyone Is So Pissed at Brazilian President Dilma Rousseff

In a country where the political and economic establishment is used to having its own way, they argue, many have been seeking a reason to remove the Worker's Party from power for a long time.

"There's a tremendous amount of pressure among certain parts of Brazilian society and the media to find something that will criminalize Lula," Sonia Fleury, a political scientist at Fundação Getúlio Vargas, a research center, said earlier this week.

One of the reasons for that, Fleury believes, is the social change that Lula's time in office represented.

"Lula was the poster boy for Brazil, for the redistribution of wealth and social benefits," she said. "He symbolized a political project that a considerable part of the population rejected, particularly the more traditional sectors."

It is not the first time Lula's reputation has come under fire. In 2005, the Mensalão or Big Monthly Payment vote-buying scandal threatened to bring down the Worker's Party government, with many key party figures either arrested or forced to resign their positions.

'His destiny hasn't been defined. He's charismatic… but charisma alone won't be enough.'

Lula, however, emerged unscathed, and went on to win reelection in 2006, before effectively appointing Rousseff as his successor to continue the party dynasty.

It remains to be seen, however, if he will survive this time.

"He's not dead," said Sonia Fleury. "His destiny hasn't been defined. He's charismatic, and Brazil doesn't have any other charismatic politicians. But charisma alone won't be enough. He'll need to construct some very solid alliances if he's going to come back."

Related: The Year Latin Americans Got Angry About Corruption

Follow James Armour Young on Twitter: @seeadarkness