Ex-President’s Relationship With Odebrecht Scrutinized in Brazil

Brazil's Former President Luiz Inacio Lula da Silva
Luiz Inacio Lula da Silva, Brazil's former president. Photographer: Tomohiro Ohsumi/Bloomberg

Brazil’s federal prosecutors have initiated a preliminary inquiry as to whether former president Luiz Inacio Lula da Silva used his influence to persuade the state development bank to help finance projects of one of Brazil’s biggest industrial conglomerates, according to media reports.

The weekly Epoca magazine was the first to report an inquiry into alleged influence-peddling involving the politician’s speaking engagements abroad. The magazine reported on Friday that Brazil’s development bank, BNDES, had financed Odebrecht SA construction projects in countries whose leaders Lula had met with.

Lula, Odebrecht and BNDES have each denied any wrongdoing.

There aren’t grounds for an investigation, said Marcelo Odebrecht, chief executive officer of Odebrecht, which owns Latin America’s biggest building company and biggest petrochemicals maker.

“It’s important to understand that the inquiry by prosecutors indicates only a questioning, a request for clarification,” Odebrecht said in a statement on the company’s website. An Odebrecht spokeswoman who asked not to be named said in an e-mailed response only 7 percent of its building unit’s revenue comes from projects with BNDES financing.

After serving as president from 2003 to 2010, Lula took on speaking engagements outside Brazil. Epoca magazine said that in some cases, he traveled abroad on an Odebrecht company jet.

Paid Engagements

Paulo Okamotto, president of Lula’s foundation, Instituto Lula, said in a statement that the ex-president no longer held public office when he traveled with Odebrecht and that he has done speaking engagements for companies from several sectors.

In a speech in Sao Paulo on Friday to mark International Worker’s Day, Lula compared some of Brazil’s news media to “trash,” specifically mentioning Epoca and Veja, magazines which frequently criticize the former leader.

“I want to say here, in front of the children: if you put together 10 journalists from Veja, from Epoca, they won’t have even 10 percent of my honesty,” Lula said.

BNDES said on its Facebook page that Lula didn’t interfere in the bank’s decisions and that its loans were approved by an independent process involving the bank’s experts. The bank said that, like credit export agencies in other countries, it finances exports to create jobs at home and and help Brazilian companies compete abroad.

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