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Development: On 8 July the federal police arrested 24 people linked to the 2005 vote-buying scandal involving President Lula da Silva's ruling Partido dos Trabalhadores.

Significance: The arrests, which snared a high-profile financier and a former mayor of São Paulo, will remind voters of the several corruption scandals that have swirled around the ruling PT since it came to power in 2002. However, the scandal is unlikely to have much impact on the government in the upcoming municipal polls on 5 October.

The so-called mensalão (monthly payments) scandal erupted in 2005 when it emerged that the PT had bought votes from legislators. The scandal forced some high-level resignations (most notably Lula's chief of staff, José Dirceu) and tainted the government, although the president's strong personal popularity rating remained remarkably unaffected by the affair.

Among those arrested was the banker Daniel Dantas, head of the Opportunity Group; Naji Nahas, an investor/financier; the former mayor of São Paulo, Celso Pitta; and Marcos Valerio, a businessman with strong links to the PT and to Dirceu (for several years the PT president) in particular. They are accused of the misuse of public funds for the purposes of congressional bribery.

The investigation has been running for four years and arrest warrants are still pending against a further 56 people.

According to local press sources, in the six years of Lula's presidency there have been more detentions for political corruption than in previous decades. In 2007 an estimated 2,800 people were detained in 188 police operations. To date in 2008, 1,700 people have been arrested in 97 operations. The government claims this is testament to increased transparency and accountability under President Lula, a claim opposition parties strongly rebuff.

Development: On 8 July president-elect Fernando Lugo appointed Carlos Mateo Balmelli to be the new director of the Itaipú dam, which Paraguay runs jointly with Brazil.

Significance: Balmelli's appointment confirms how serious Lugo is about confronting Brazil over the price at which Brazil buys excess electricity produced by the dam. Balmelli, a former senator, is a key member of the Partido Liberal Radical Auténtico, the cornerstone of Lugo's ruling alliance.

It was a major surprise when Balmelli was not given a position in Lugo's cabinet, which the president-elect named in mid June. Balmelli had been tipped to be foreign minister, but Lugo clearly had a more specific foreign-policy role in mind.

Development: On 8 July Argentina's umbrella union, the Confederación General del Trabajo (CGT), formally split.

Significance: The rupture of the CGT, Argentina's oldest and largest labour organization, is terrible news for the government. The CGT has provided crucial support to President Cristina Fernández de Kirchner despite the difficult start to her presidency, but a sizeable chunk of the union has now broken away precisely because it does not back the government.

Following the CGT's leadership election, Hugo Moyano, a trucker, remains in charge of the umbrella union and is still loyal to the government. However, his main rival, Luis Barrionuevo (head of the main culinary union), has established the CGT Azul y Blanca to run in parallel with the Moyano-led organization, taking with him some 50 unions.

The CGT stuck by Fernández during wage negotiations and the rural dispute. However, Barrionuevo's faction is likely to put considerable pressure on the government, especially on the subject of inflation.