Brazil’s Lula faces charges of hiding assets
by Raymond Colitt,
2016-03-11 05:51:48.0
BRASILIA — Brazilian prosecutors have dealt another blow to former president Luiz Inacio Lula da Silva, accusing him of hiding assets from authorities just days after a separate probe unleashed a new round of political turmoil in the country.
The Sao Paulo state prosecutor’s press office confirmed the charges. Newspaper O Globo reported the charges were for money laundering and hiding assets, such as ownership of a seaside triplex apartment in the city of Guaruja.
The Lula Institute that the former president founded said he had not committed any crime.
According to Brazilian law, a judge would have to accept the charges for Mr Lula to be indicted.
Brazil’s political tensions are threatening to spill out into the street as prosecutors zero in on Mr Lula.
His protege, President Dilma Rousseff, meanwhile, is herself fighting off impeachment proceedings. Mr Lula was accused last week of handing out favours in return for corporate donations and speaking fees, prompting allies and opponents alike to call for demonstrations.
Senator Aecio Neves, the runner-up in the 2014 presidential election, called on Thursday on Ms Rousseff to resign.
Wednesday’s charge "tightens the noose further around Lula, and by implication, Dilma as well", said Gabriel Petrus, a political analyst at business consulting firm Barral M Jorge. "If he goes down, she may fall as well."
The currency rose 1.2% to 3.6474 real to the US dollar on Thursday, pushing its gains this month to 10%. Brazilian bond risk as measured by five-year credit default swaps dropped below 400 basis points, the lowest level since November.
The shock waves ripping through Brazil’s political establishment come as the broader economy struggles to cope with a drop in commodity prices. Gross domestic product will shrink 3.3% this year after falling 3.8% last year, marking Brazil’s most protracted downturn in more than a century, says a Bloomberg survey.
Investigators are focusing on Mr Lula and other high-ranking politicians and business executives as part of a widespread corruption probe known as Carwash.
Mr Lula has repeatedly denied any wrongdoing. Ms Rousseff has not been implicated in any investigation.
The charges against Mr Lula and other Workers’ Party loyalists threaten to undermine their legacy and set the stage ahead of local elections later this year.
The Workers’ Party has governed for 14 years, from 2002 when Mr Lula’s administration was credited with successfully staving off a default; through the commodity boom and one of the most wealthy periods of the country’s history; and until the recent economic stumbles.
The turmoil in Brazil has not scared off investors, who are betting the scandals could bring down the administration and usher in new leadership that is better equipped to pull the country out of its slump. Brazil’s stock index rose the most among its global peers in the past week and the real advanced to the strongest level in six months on Wednesday.
Bloomberg
Luiz Inacio Lula da Silva. Picture: BLOOMBERG/ENRIQUE MATUTE
BRASILIA — Brazilian prosecutors have dealt another blow to former president Luiz Inacio Lula da Silva, accusing him of hiding assets from authorities just days after a separate probe unleashed a new round of political turmoil in the country.
The Sao Paulo state prosecutor’s press office confirmed the charges. Newspaper O Globo reported the charges were for money laundering and hiding assets, such as ownership of a seaside triplex apartment in the city of Guaruja.
The Lula Institute that the former president founded said he had not committed any crime.
According to Brazilian law, a judge would have to accept the charges for Mr Lula to be indicted.
Brazil’s political tensions are threatening to spill out into the street as prosecutors zero in on Mr Lula.
His protege, President Dilma Rousseff, meanwhile, is herself fighting off impeachment proceedings. Mr Lula was accused last week of handing out favours in return for corporate donations and speaking fees, prompting allies and opponents alike to call for demonstrations.
Senator Aecio Neves, the runner-up in the 2014 presidential election, called on Thursday on Ms Rousseff to resign.
Wednesday’s charge "tightens the noose further around Lula, and by implication, Dilma as well", said Gabriel Petrus, a political analyst at business consulting firm Barral M Jorge. "If he goes down, she may fall as well."
The currency rose 1.2% to 3.6474 real to the US dollar on Thursday, pushing its gains this month to 10%. Brazilian bond risk as measured by five-year credit default swaps dropped below 400 basis points, the lowest level since November.
The shock waves ripping through Brazil’s political establishment come as the broader economy struggles to cope with a drop in commodity prices. Gross domestic product will shrink 3.3% this year after falling 3.8% last year, marking Brazil’s most protracted downturn in more than a century, says a Bloomberg survey.
Investigators are focusing on Mr Lula and other high-ranking politicians and business executives as part of a widespread corruption probe known as Carwash.
Mr Lula has repeatedly denied any wrongdoing. Ms Rousseff has not been implicated in any investigation.
The charges against Mr Lula and other Workers’ Party loyalists threaten to undermine their legacy and set the stage ahead of local elections later this year.
The Workers’ Party has governed for 14 years, from 2002 when Mr Lula’s administration was credited with successfully staving off a default; through the commodity boom and one of the most wealthy periods of the country’s history; and until the recent economic stumbles.
The turmoil in Brazil has not scared off investors, who are betting the scandals could bring down the administration and usher in new leadership that is better equipped to pull the country out of its slump. Brazil’s stock index rose the most among its global peers in the past week and the real advanced to the strongest level in six months on Wednesday.
Bloomberg
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