Brazil: New corruption scandal rocks government

Critics in Brazil denounced reports that beleaguered President Dilma Rousseff will appoint her popular predecessor to the cabinet amid a barrage of new accusations in a growing corruption scandal threatening her government.

Unnamed presidential aides told Reuters news agency on Tuesday charismatic Luiz Inacio Lula da Silva – Brazil’s first working-class president – decided to accept a ministerial position in Rousseff’s cabinet, a move that would offer him protection in the short-term from prosecutors who have charged him with money laundering and fraud.

“The appointment of Lula as minister shows Brazilians that the government’s only concern today is to survive at any cost,” opposition leader Aecio Neves said in a Twitter post.

One of the presidential aides, who asked not to be identified so he could speak freely, said Lula, a talented negotiator, would take charge of legislative affairs, where he could leverage his close ties to congressmen from the ruling Workers’ Party to rally votes for the government.

The possible return to public office of Lula, who stepped down in 2010 after eight years in power as one of the world’s most popular leaders, was slammed by critics as a desperate attempt to shore up support for Rousseff as she faces impeachment proceedings in Congress.

Rousseff’s popularity has been pummelled by Brazil’s worst economic downturn since the Great Depression, and the spreading corruption investigation focused on state-run oil company Petrobras.

More than a million people marched in demonstrations across Brazil on Sunday, calling for her to step down and voicing support for the investigations into kickbacks by contractors to political leaders in exchange for work with Petrobras.

Plans to announce Lula’s appointment were overtaken by the publication of damaging new allegations from a Workers’ Party senator in a plea-bargain testimony made public by the Supreme Court on Tuesday.

The testimony by Senator Delcídio do Amaral, a close ally of the president until he was arrested last year, accused both Rousseff and Lula of being aware of corruption at Petroleo Brasileiro SA, the Brazilian oil company, and said the president had tried to hamper the investigation.

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In the most damaging allegations, Amaral said Aloisio Mercadante, a Workers’ Party veteran who has served as Rousseff’s chief-of-staff and is now education minister, offered to pay him to keep quiet last year.

Mercadante called a news conference to deny the accusation, that was based on a recording of two meetings between the minister and Amaral’s personal secretary.

Presidential aides said that the accusations had overshadowed any announcement of Lula joining the cabinet. “We were hoping to change the mood with Lula’s appointment, but this recording is another huge blow,” one aide told Reuters.