Lula found guilty

The former President of Brazil, Luiz Inacio da Silva (Lula) has been convicted on charges of money laundering and corruption. The politician, who was president from 2003 to 2011, has been sentenced to nine and half years.

Lula remains free pending an appeal and has denied the charges.

Background

Brazil, in South America, is one of the world’s biggest democracies. From 2000 to 2012, the country’s average annual GDP grew at a rate of over 5%. In 2012, the economy surpassed that of the United Kingdom, temporarily making it sixth largest economy in the world. In 2017, it was reported that it was in the midst of its worst ever recession. The growth rate is now 8% lesser than it was in December 2014. However, it still remains one of the most influential countries in the region.

Former President Lula was regarded as the most popular presidents in the history of Brazil. It was during his tenure that a number of economic reforms were introduced and the country had a period of sustained growth. However, his critics regarded him as a polarising figure and labelled him as opportunistic and corrupt.

Politics and politicians in Brazil have long been mired by allegations of corruption.  Federal prosecutors in the nation have will be opening fresh inquiries into the conduct of eight ministers in the currently serving in President Michel Temer’s Cabinet. There are also inquires to be held into 24 senators and 39 lawmakers in the lower house of Congress.

Analysis

The ongoing investigation has been dubbed “Operation Car Wash” and has already arraigned a number of politicians and elites. The controversy is around bribes paid to get deals with Petrobras (a semi-public Brazilian multinational corporation in the petroleum).

Lula has been found guilty of having accepted bribes worth $1.2 million from an engineering firm OAS SA. Prosecutors of the case have said that this money was used to renovate a beach house owned by the former president. Lula is said to have helped the firm secure lucrative contracts with the state oil company.

For his part, Lula has been steadfast about his innocence and maintains that that the charges are politically orchestrated. He had announced earlier that he might be running once again for the office of the president.

Upon the verdict being made public, Lula’s lawyers issued a statement saying, “For more than three years Lula has been subject to a politically motivated investigation. No credible evidence of guilt has been produced, and overwhelming proof of his innocence blatantly ignored.” 

Assessment

Our assessment is that if his appeal in the higher courts fail, it would mean the end of Lula’s future political aspirations. Given the extent of the scandal, it is highly unlikely that Lula will be the last politician to fall as a result of “Operation Car Wash.” President Temer is also under investigation.