Lula Said to Decide Soon Whether to Take Brazil Cabinet Job

Updated on
  • The appointment could boost Rousseff's chances, investors say
  • Opposition leaders say they would challenge the move in court

Brazil’s former leader Luiz Inacio Lula da Silva will decide soon whether to accept a job in the government to shield himself from a corruption probe and help fight the impeachment of President Dilma Rousseff, according to people aware of the discussions.

Lula, who has been charged with money laundering, on Tuesday afternoon is set to discuss with the president the cabinet position she offered him, said one of the people who asked not to be named because the discussions were private. The decision could face delays after details of a plea bargain between Rousseff’s former leader in the Senate Delcidio Amaral and prosecutors linked senior administration officials to a sweeping corruption scandal.

"Details of the plea bargain bring Dilma’s government even deeper into the scandal, which undermines its credibility with Congress," said Thiago Vidal, a political analyst at Brazilian consulting firm Prospectiva. "Lula still has some of the political clout needed to prevent the destruction of the government’s base in Congress, but the government’s image is badly hurt."

The real and the Ibovespa stock index fell for a second session on Tuesday as investors worry Lula’s appointment could extend the struggle over Rousseff’s impeachment, and prompt looser fiscal discipline. The ruling Workers’ Party -- as well as Lula -- has criticized Rousseff’s austerity measures, including a proposal to trim pensions. Assets had surged in the past two weeks on bets her ouster would pave the way for a government with a stronger mandate to revive growth.

Crumbling Alliance

The Workers’ Party wants to make its co-founder Lula a cabinet member not only to shield him from a possible arrest but also to rebuild the government’s crumbling alliance in Congress ahead of voting on impeachment, according to another person who also requested anonymity.

Opposition leaders in Congress said they would challenge the move in court, saying that appointing him minister so he can avoid the threat of prison is a misuse of power. "This is a slap in the face of Brazilian society," said Pauderney Avelino, leader of the opposition Democratas party in the lower house.

Rousseff and Lula have repeatedly denied any wrongdoing and Attorney General Jose Eduardo Cardozo said on Tuesday that the former president won’t be hiding from the law if he accepts a cabinet post. Under Brazilian law, only the Supreme Court can probe, indict and try ministers.

“Nobody who will be tried by the Supreme Court is running away from justice,” he told reporters in Brasilia. “Any government would be honored to count on someone with the political and managerial abilities of President Lula.”

Investigations Grow

Mass protests on Sunday fueled expectations that Congress will speed up impeachment proceedings against Rousseff. At the same time, investigators are zeroing in on Lula and getting closer to the presidential palace.

A Sao Paulo judge who was going to rule on a request for Lula’s arrest on Monday deferred that decision to federal judge Sergio Moro, who has already sent to jail dozens of business leaders implicated in the Petrobras corruption probe, dubbed Carwash.

And on Tuesday, a Supreme Court justice accepted the plea bargain from the former government leader in the Senate, who has alleged that Rousseff tried to interfere with investigations. Document published by Supreme Court detail allegations of government corruption dating back to the administration of Fernando Henrique Cardoso, who left office in 2003.

Lula’s return to Brasilia could buy the government time, but may be insufficient to save it, said Harold Trinkunas, senior fellow at the Brookings Institution.

"Almost anything they do at this point starts to look like they’re impeding judicial investigations that have become quite popular with many in Brazil," Trinkunas said. "So they’re running out of room to maneuver to mitigate the damage from the case.”

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