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Lula Party Corruption Scheme Operator Draws 11-Years in Prison

Oct. 24 (Bloomberg) -- Brazil’s Supreme Court justices yesterday sentenced the chief operator in a cash-for-votes scheme during former President Luiz Inacio Lula da Silva’s first term to at least 11 years in prison.

Advertising executive Marcos Valerio had been convicted of fraud, corruption, and money laundering in a scheme the ruling Workers’ Party used to embezzle public funds to bribe legislators in 2003-05. The court can increase his prison term over other charges on which he was found guilty.

The sentence could signal prison time for the remainder of the 25 defendants found guilty, including Lula’s former chief of staff, Jose Dirceu, who the court said masterminded the operation that prompted calls for Lula’s impeachment in 2005, said Andre Cesar, analyst with the Brasilia-based consulting firm Perspectiva.

“It shows Dirceu and the others are likely to get the same stiff treatment,” Cesar said by telephone. “The justices were harsh in their rulings, now they are being harsh in applying sentences as well.”

Seeing three former top officials of the ruling party behind bars could diminish a wide-spread perception among Brazilians that government officials enjoy a high degree of impunity. Brazil ranks 73rd of 183 countries in Transparency International’s 2011 Corruption Perception Index, after Cuba and Saudi Arabia.

While 73 percent of those polled in an August Datafolha opinion survey said the main defendants should be sentenced and go to jail, only 11 percent thought that would happen.

Dirceu, who was Lula’s closest and most powerful aide during his first term, reiterated his innocence in a message posted on his blog Oct. 22. The Supreme Court condemned him on the basis of indications not facts, he wrote.

Lula’s handpicked successor, Dilma Rousseff, was not accused of wrongdoing, and maintained her approval rating of 77 percent in September after taking a tough stand on corruption by firing six ministers accused of graft and influence-peddling.

The court will also sentence Jose Genoino, who was the Workers’ Party chief at the time, and its treasurer, Delubio Soares. The three-month trial could end as early as tomorrow.

To contact the reporter on this story: Raymond Colitt in Brasilia Newsroom at rcolitt@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

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