Brazil & Southern Cone - May 2006 (ISSN 1741-4431)

It is hardly surprising that yet more corruption scandals have emerged as the October elections approach. However, it is notable that Lula da Silva remains untouchable.

Opportunity knocks

The latest scandal to raise opposition hopes that Lula might finally be found out concerned a bank called Opportunity. Opportunity has been linked to various instances of financial improprieties and shady dealings in several law proceedings, the most notoriously the fight for control of the privatised Brazil Telecom (BrT).

However, it became a household name when the current-affairs magazine Veja said the ruling Partido dos Trabalhadores (PT) "requested" US$90m from the bank in 2003. When the bank's president, Daniel Dantas, refused, he claims Opportunity became the target of a governmental campaign to destroy its reputation. According to Veja, Dantas then collected information about secret foreign accounts in the names of key government members, including President Lula da Silva and the justice minister, Márcio Thomaz Bastos.

The article prompted the federal police to open yet another investigation into government corruption. So far Dantas has refused to talk, but through Opportunity's press office he made it clear he is ready to give his testimony if he is called by the police or congress. Veja maintains that Dantas collected the information to protect himself against blackmail from the former leadership of the ruling Partido dos Trabalhadores, which was demanding "millions" during the BrT dealings. Bastos and other government-linked names vehemently deny holding foreign accounts.

The plot thickened when Bastos confirmed on 22 May that he secretly met Dantas. The justice minister said he did "not see any impropriety" in his meeting with Dantas in Brasí­lia (which was again uncovered by Veja) and he claimed the meeting was "an informal chat". His colleague Tarso Genro, head of the institutional relations ministry, however, said that Bastos met Dantas as part of an "institutional mission" to tell Dantas that the justice ministry will not interfere in the investigations. The federal police considered the minister's action "negative" in an official statement, saying that if Bastos wanted to meet Dantas that should have been done in the open.

Mensalão redux

The Opportunity scandal threw the PT's financial dealings under the spotlight at an opportune moment: the former secretary-general of the ruling Partido dos Trabalhadores, Sí­lvio Pereira, gave a new testimony to congress on 10 May. Pereira's testimony did not add anything new to the corruption scandal in which the PT is accused of funding its campaigns illegally and bribing allied congressmen. However, he did say that the party's former leadership, including President Lula da Silva before being elected, were the "decision-makers" about the PT's campaign strategies.

But any pressure that was building up on President Lula evaporated on 16 May when the prosecutor general, Antonio Fernando de Souza, told reporters that he would not include Lula in his report on corruption to be presented to the supreme court. Many assumed the public-prosecutor would blame Lula for the corruption scheme mounted by the former leaders of the PT. According to Souza, there is not enough evidence to suggest Lula directly participated in the illegal financing scheme and the bribing of allied congressmen; the president's ability to dodge whatever mud is being thrown around remains impressive.