- The Washington Times - Monday, August 8, 2005

RIO DE JANEIRO — The reputation of Brazilian President Luiz Inacio Lula da Silva and his left-wing ruling party are being dragged through the mud in a growing scandal.

The Workers’ Party and the president, who had prided themselves on being devoid of corruption, are the focus of a congressional probe into accusations that the party paid numerous lawmakers to support key votes in the Congress.

A former top adviser to Mr. Lula da Silva spoke out last week in his defense against accusations that he orchestrated a scheme to bribe lawmakers for their support.

Ex-Chief of Staff Jose Dirceu adamantly has denied his involvement in the scandal that has dogged Mr. Lula da Silva and the party for two months.

A former ally to the party came forward in June and accused the administration of doling out kickbacks to lawmakers in excess of $12,000 a month to back key reform initiatives in congressional votes. At least 31 lawmakers from five different parties have been accused of taking bribes from the party.

Federal Deputy Roberto Jefferson, testifying before a congressional committee last week, identified Mr. Dirceu as the head of the supposed scheme.

Mr. Dirceu told the committee he was “not the boss of a scheme” and “would never allow” the buying of parliamentary votes.

“I am absolutely innocent,” he said.

Mr. Jefferson then accused Mr. Dirceu of procuring additional bribery funds from Portugal Telecom, an assertion that both the party and the Portuguese telecommunications company deny.

The bulk of the kickback cash supposedly came from Brazilian businessman Marcos Valerio, who testified before the committee that he lent the party $17 million, money the administration denies taking.

Mr. Dirceu, a one-time adviser to Mr. Lula da Silva, stepped down last month, along with several other party leaders implicated in the scandal. Mr. Lula da Silva says he has no knowledge of a vote-buying plan and has not been implicated.

Party lawmakers were reportedly relieved that Mr. Dirceu’s testimony did not link Mr. Lula da Silva to the scandal, as many of them were considering stepping down if the scandal spread to the presidency, said Christopher Garman, Latin America analyst for the Eurasia Group.

However, opponents of the president on the right say it would be impossible for Mr. Lula da Silva not to know.

“If the president says he knew nothing of these vote-buying allegations, he’s either corrupt or an idiot,” said Brazilian Sen. Arthur Virgilio.

Meanwhile, the scandal has brought all legislative activity to a halt. Last week, the scandal claimed its first casualty when Deputy Valdemar Costa Neto, one of those accused of accepting the bribe, resigned. Analysts warn that if all those accused of taking a bribe resign, it could cause a crippling power vacuum.

Brazil’s economy has weathered the scandal so far and even appears to be thriving. But analysts remain reluctant to pronounce the president or the party free from further harm.

“They’re still going to have a long investigative road ahead of them,” Mr. Garman said.

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