Corruption Probes Hamper Lula Efforts to Save Brazil Government

  • Higher number of Brazilians say Lula was involved in graft
  • "Aura of invincibility is completely dissipated" -- Eurasia

Brazil’s former President Luiz Inacio Lula da Silva is losing some of his political capital, as spreading corruption investigations into the activities of his inner circle threaten his credibility.

A growing number of Brazilians blame the predecessor and mentor to President Dilma Rousseff for the country’s largest-ever corruption scandal, which involves kickbacks at state-run oil company Petrobras, according to polling company MDA. Lula, who for years was the most popular politician in the country, now trails or remains statistically tied with various opposition leaders, including two who lost to Rousseff last year, according to hypothetical election scenarios carried out by MDA on Oct. 20-24.

The dip in popularity comes as law-enforcement officials step up probes of Lula and people close to him. Police in recent days raided the office and questioned one of Lula’s sons about his dealings with a lobbyist accused of paying bribes. They also are probing whether Lula engaged in influence trafficking abroad. Epoca magazine said that the government’s money laundering watchdog uncovered signs that Lula and three of his allies made unusual bank transactions.

The investigations mark a reversal of fortune for a two-term president who Barack Obama once called the most popular politician on Earth. Hoping to draw on his famed charm and experience, Lula just over a month ago thrust himself back on the political stage by advising his successor on cabinet changes designed to fortify her allied base and fend off calls for impeachment. Now Lula’s support could become a liability to Rousseff as she fights for her own survival amid deepening discontent over Brazil’s recession.

“When Lula is suffering and having his credibility destroyed, she has a smaller chance of recovering any sign of credibility through him,” said Thiago de Aragao, partner and director of strategy at political-risk consulting company Arko Advice. “She’s a creation of Lula. So if your creator is being demolished by his past practices, the perception of society is that Dilma was just another bad decision that Lula made, among several.”

2018 Comeback

Lula hasn’t been charged in a crime and denies that he engaged in wrongdoing. The Lula Institute’s spokesman Jose Chrispiniano said the former president’s financial transactions are legal.

Lula has overcome scandal before, notably winning re-election a year after a cash-for-votes investigation prompted calls for his impeachment.

"You can be sure of one thing: I will survive," Lula said last week at a party convention.

So confident is Lula’s party in his popularity that its president, Rui Falcao, said at the convention he wants the former president to run for Brazil’s top office again in 2018. Chrispiniano cited a poll by Ibope that shows Lula still has political strength for the next election and that his rejection rate is comparable to other potential candidates.

While it’s impossible to rule out another Lula candidacy, this year’s scandals have taken their toll on his image, said Joao Augusto de Castro Neves, an analyst at political consulting company Eurasia Group.

"There’s going to be this cloud of uncertainty for a while in terms of whether there was embezzlement, influence peddling, things like that," he said. "If he were to run, he would still be a competitive candidate, of course. He’s someone who’s well known, but that aura of invincibility is completely dissipated."

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