Silva faces political scandal
BRASILIA, Brazil (AP) --Brazilian President Luiz Inacio da Silva faces
the first major
scandal of his administration with allegations that an aide solicited
illegal campaign
contributions from the boss of an illegal lottery.
Opposition lawmakers on Monday called for a congressional investigation
into
allegations that could undermine the government of Silva, who in the
past 24
years built his leftist Workers' Party on a platform of honesty and
service to the
poor.
The president fired the aide at the center of the scandal, Waldomiro
Diniz, on
Friday.
In a story last week, the magazine Epoca alleged that Diniz had solicited
illegal
campaign contributions for the party from Carlos Ramos, also known
as
Carlinhos Cachoeira -- "Charlie the Waterfall." Epoca described Ramos
as a
kingpin of a Rio de Janeiro-based numbers game, an illegal lottery
run from
open-air bars and coffee shops and popular among poor Brazilians.
Epoca based its charges on a videotape of a conversation between Diniz
and
Ramos in which Diniz appears to solicit cash contributions for two
party
candidates for state governorships as well as a one percent "commission"
for
himself. According to Epoca, Diniz assured Ramos the donations would
not be
reported to electoral authorities. Failure to report such contributions
is a crime
under Brazilian election laws.
The tape was shown on Brazilian TV news programs over the weekend.
Diniz has made no public statement since being fired. He had been responsible
for relations with Congress and was considered a protege of presidential
chief
of staff Jose Dirceu.
Dirceu read a brief statement to congressional leaders Monday, saying,
"These
events took place before the present administration took office and
no
irregularity occurred during the present government." Dirceu added,
"Swift
action was taken in firing the employee and turning the case over to
competent
police authorities."
On Monday, the opposition Social Democrats began circulating petitions
in
both houses of Brazil's Congress seeking the creation of a committee
to
investigate the allegations.
"This is a very serious case," said David Fleischer, a political science
professor
at the University of Brasilia. "No one can say, at this point, how
it is going to
turn out."
Investors are watching developments closely, worried that such an investigation
could hurt Silva's attempts to push through a package of ambitious
electoral,
judicial, labor and bankruptcy reforms. The country's Ibovespa stock
exchange
index has fallen nearly 3 percent since news of the scandal broke last
week.
Silva and the PT, as the party he founded in 1980 is known, spent much
of the
last two decades investigating allegations of corruption against various
administrations.
"For eight years, the PT investigated everything under the sun," said
Congresswoman Zulaie Cobra, a Social Democrat. "Now that they are in
power, they want to sweep these latest allegations under the rug."
Cobra is leading the drive to set up a committee to investigate the
allegations
against Diniz and look into whether a wider network for soliciting
illegal
campaign donations might be in place.
"It could easily become a runaway committee," said political risk analyst
Walder de Goes, of Goes Consultants. "Campaign finance is the black
plague
of Brazilian politics."
PT National Chairman Jose Genoino played down the scandal, noting that
Diniz was not a registered member of the party. "This is nothing more
than an
attempt by the opposition to get attention," Genoino told reporters
Monday.
"The government is going to try to muzzle the congressional inquiry,"
said
Amaury de Souza, a senior partner of the MCM Consulting Group. "They
have
a good chance of succeeding, but they are going to pay a high price
in political
patronage and pork barrel legislation."
Silva's problem, according to Souza, is a weak congressional coalition,
based
on votes from seven different parties in the 513-member Chamber of
Deputies
and 81-member Senate. The powerful Brazilian Democratic Movement joined
the coalition in January, delivering its 77 Chamber of Deputies votes
and 22
senators.
Democratic Movement lawmakers "will vote against a congressional
investigation, but they are going to want more government jobs and
budget
allocations for their trouble," Souza saud. "This will set a bad precedent,
with
the administration buying its way out of every scandal from now on."
Copyright 2004 The Associated Press.