Prosecutors have charged Brazil’s former President Luiz Inácio “Lula” da Silva for the first time with direct involvement in a wide-ranging corruption scheme, raising a number of questions about the extent of the ex-leader’s role in the graft.

Brazil’s Attorney General’s Office announced on September 14 that Lula stands accused of “setting up and controlling an illegal scheme of bribe payments for the benefit of political parties, politicians and civil servants.”

According to the prosecutors’ press release, the purpose of the plot was to “use part of the bribes to buy partisan support in Congress and thus ensure the perpetuation of his party in power.”

Prior investigations revealed that executives from the state oil company Petrobras issued inflated public contracts to companies in exchange for kickbacks, some of which were laundered and funneled into political campaigns. A large number of business leaders and politicians, including Brazil’s current President Michel Temer, have been implicated in the corruption scandal.

Lula was previously tied to a similar political graft case known as the “mensalão,” or “big monthly payment.” In that case, officials from Lula’s Worker’s Party (Partido dos Trabalhadores – PT) were accused of using state funds to buy votes from members of congress.

Lula’s long-time confidant and former chief of staff Jose Dirceu was sentenced in 2012 to nearly 11 years in prison for his involvement in the mensalão scheme. Earlier this year, Dirceu was convicted and sentenced to 23 years in prison for his role in the Petrobras scandal.

In a 149-page indictment (pdf) released on September 14, prosecutors describe the mensalão and Petrobras schemes as two “sides of the same coin,” alleging that Lula was at the “vertex of various criminal schemes” that involved not only Petrobras but also other government-run entities.

According to the indictment, Lula used his position as president from 2003 to 2010 to appoint participants in the corruption scheme to important government positions. There, they could accept bribes for their own personal enrichment, while funneling some of the money into a “general fund” for buying political favors and covering the costs of disguising its illicit origin. 

One of the main pieces of evidence prosecutors point to as evidence of Lula’s guilt is his alleged acceptance of $1.1 million worth of construction work on a seafront apartment in São Paulo state, which was owned and upgraded by the construction firm OAS — one of the main companies accused of participation in the Petrobras scandal.

In connection with Lula’s case, prosecutors have also charged his wife Marisa Letícia; the head of his charitable foundation, Paulo Okamotto; and former OAS President Léo Pinheiro, along with several others, with bribery and money laundering.

Lula himself is already facing money laundering charges related to allegations he concealed his ownership of the São Paulo apartment. Separately, the former president has also been charged with obstruction of justice for allegedly conspiring to have a witness in the Petrobras investigation limit his testimony on the corruption scheme.

In all these instances, Lula has denied wrongdoing. As for the latest charges, his legal team described them as “blabber” without any proof, reported the Financial Times.

“It is a narrative that is completely incompatible with reality and the facts,” one of his lawyers said, adding that Lula and his wife “were not even aware of, let alone part of, any criminal scheme.”

Okamotto, the head of Lula’s foundation, also denied the charges.

Former OAS president Pinheiro has admitted that he committed crimes, and he recently promised to divulge the details, “whoever may be on the other side.”

The Brazilian federal judge in charge of the Petrobras investigation, Sergio Moro, must decide whether or not to accept the prosecutors’ charges before they can move forward. According to local press reports, Moro, who is currently in the United States for a lecture at the University of Pennsylvania, will make the decision next week.

InSight Crime Analysis

The accusation that Lula created and directed a massive and multifaceted corruption ring aimed at keeping his party in power has made international headlines. And there appears to be convincing evidence of impropriety in his alleged acceptance of more than $1 million in remodeling work on the São Paulo apartment. But the prosecutors’ argument that Lula was the mastermind behind the Petrobras scandal is less convincing.

One of Brazil’s most influential newspapers, Folha de São Paulo, described the charges related to the construction work as an “anticlimax” when compared to the allegation that he headed a huge corruption scheme.

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In an editorial published on September 15, the newspaper wrote that it was not “a small thing, nor excusable,” if the former president improperly accepted services from a firm engaged in corrupt acts. But, the editorial continued, “it is strange that, in a scheme described with such hyperboles, the part of the ‘maximum commander’ comes down to amounts less than those obtained by” individuals with a lesser political stature. For example, recently-ousted lower house Speaker Eduardo Cunha was accused of taking several million dollars in bribes related to Petrobras contracts.

The Folha de São Paulo editorial concluded: “Truthfully, it is not known what other surprises the prosecutors have in their pocket. But at least for now, it leaves the impression that, without being able to present more robust evidence against Lula, the Attorney General’s Office is trying to overcome that gap with rhetoric.”

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