Security Exchange News

Lula: From President to Prison

12 April 2018

Brazilian politics is renowned for its scandals and general volatility. This is especially true in a year where the country will head to the polls to elect a new president. Over the weekend, political tensions increased after an arrest order was issued against former President Luiz Inacio Lula da Silva. Lula was sentenced to more than 12 years in prison on corruption charges after he was accused of owning a beachfront apartment in coastal Sao Paulo which was acquired through a bribery payment from the construction company OAS. In a lengthy battle involving an army of lawyers and numerous courts, Lula lost several habeas corpus appeals aimed to keep him out of prison. Despite his conviction (and a number of other accusations) the former president continues to be a highly popular figure in Brazil.

A dramatic surrender

Federal Judge Sergio Moro, who oversees the notorious Car Wash investigation, ordered Lula to hand himself over to the Federal Police (PF) in the southern city of Curitiba on Friday afternoon. Instead, he defied the ruling and retreated to an influential metalworkers’ union in his hometown of Sao Bernardo do Campo, where he met with high-ranking members of the opposition Workers’ Party (PT) - which included impeached former president Dilma Rousseff and the party’s national leader, Senator Gleisi Hoffmann. Thousands of supporters gathered outside the building until his dramatic surrender to the police a day later.

Lula was taken to the PF headquarters in Curitiba, the birthplace of the Car Wash investigations, where he was met with mixed reactions; some people even used fireworks to commemorate his arrest. On the other hand, hundreds of supporters flocked to the city where a temporary camp was erected to await his release or potential transfer back to Sao Paulo.

The first in a series of court battles

While his team of lawyers explore further appeal options, this is not the only legal battle that he faces. Lula is also accused of using money obtained from bribes from several construction companies to refurbish a farm in Atibaia, while he is also being investigated over a deal to obtain land, which he plans to use to build a new headquarters for his own Lula Institute. Other indictments include: meddling with the Brazilian Development Bank (BNDES) to grant engineering contracts in Angola to the construction giant Odebrecht; influencing the purchase of dozens of military aircraft during his time as president; the approval of a presidential order to benefit motor companies; obstruction of justice over his alleged attempt to silence a former director of the state-owned oil company Petrobras; and finally accusations of money laundering, influence peddling and racketeering, which also implicates former President Rousseff, Senator Hoffmann and several other high-level PT members.

The tip of the iceberg

Since the first phase of the Car Wash investigation was launched back in 2014, several high-level politicians have been implicated in various corruption scandals. Probes into the state-owned oil company, Petrobras, have spread to other major Brazilian companies. In a set of controversial plea bargains settled by the former head of the Odebrecht, high-level politicians and prominent businessmen across Latin America, the Caribbean, Europe and Africa have been implicated. Skala, Zelotes, Janus, and other countless investigations joined the Car Wash investigation, which is undoubtedly the largest corruption scandal in recent history. Since the meat-packing giant JBS implicated President Michel Temer in a massive corruption scheme, a number of his acquaintances and close aides have been indicted for racketeering in a fresh wave of accusations from the Supreme Federal Court (STF).

A shift in the presidential race?

Lula da Silva’s arrest threatens to derail his presidential aspirations. Due to legislation approved during his own mandate, he is expected to be barred from running due to violations of the so-called Clean Slate Law, which prohibits convicted politicians from occupying public offices. However, despite his detention, Senator Hoffmann said that he continues to be the party’s choice for the upcoming vote in October. His fate rests in the hands of judges within the Supreme Electoral Court (TSE), who will decide his eligibility ahead of the registration deadline in mid-August. Preliminary polls suggest that Lula would be the frontrunner in the presidential battle against right-wing Jair Bolsonaro, while other fragmented political parties continue to face a crisis of their own.

Many expect the PT to be engulfed in crisis while Lula awaits his fate, while other parties including the ruling Brazilian Democratic Movement (MDB) are approaching the election with optimism. Henrique Meirelles is set to be become MDB’s presidential candidate after stepping down as treasurer. Joaquim Barbosa, the former president of the STF, is also pushing his credentials as a potential candidate for the centre-left Brazilian Socialist Party (PSB). With Lula behind bars, the scramble for the presidency begins.