Corruption Scandal Plagues Brazil's Lula

Brazil's lower house of Congress elects a new leader Wednesday. The outgoing speaker stepped down amid a widening corruption scandal that has enveloped the government of President Luiz Inacio Lula da Silva. Lula's left-leaning Workers Party is accused of buying congressional votes and setting up slush funds.

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Brazil's lower house of Congress elects a new leader today. The outgoing speaker stepped down amid a widening corruption scandal that has enveloped the government of President Luis Inacio "Lula" da Silva. Lawmakers are investigating charges that Lula's left-leaning Workers Party bought votes in Congress and set up slush funds. From Rio de Janeiro, NPR's Julie McCarthy reports.

JULIE McCARTHY reporting:

Watching the corruption scandal unfold has become Brazil's newest spectator sport.

(Soundbite of television broadcasts)

McCARTHY: Even the Jay Leno of Brazil, the cherubic Joel Suarez, who sports a wide grin and tight suits over his wider midriff, dedicates his nightly show to the affair. His guest list now features a steady stream of politicians, their ex-wives and secretaries. Lawmaker Zulaide Cobra Jiberu(ph) impressed audiences this night by talking non-stop for an hour about the web of alleged slush funds, vote-buying and tax evasion. The scandal came to light largely due to this man.

Mr. ROBERTO JEFFERSON (Lawmaker): (Foreign language spoken)

McCARTHY: Lawmaker Roberto Jefferson's appearances before Congress have transfixed the nation. Charged in May with corruption involving the postal service, Jefferson warned his accusers that he was not going down alone. Since then, the flamboyant legislator accused the party of President Lula of buying votes in Congress in monthly installments, or mensonlon(ph), the Brazilian name for the scandal. In his last appearance before Congress expelled him two weeks ago, Jefferson boomed, `I've shown the people of Brazil that the emperor has no clothes.'

(Soundbite of television broadcast)

Mr. JEFFERSON: (Foreign language spoken)

(Soundbite of applause)

McCARTHY: The president apologized for his party but denied any personal wrongdoing. None of the allegations has been proven yet, but evidence mounts, and several senior leaders of Lula's party have stepped down. Analysts say the affair has paralyzed the government. Brazil's economy, however, appears immune. US Treasury Secretary John Snow this week labeled Brazil's economic growth exuberant and praised the country's leaders for reducing the debt and creating new jobs.

(Soundbite of people chanting)

McCARTHY: At a rally to elect new Worker Party leaders, the faithful defend Lula, fearing that if he falls, the entire cause of the political left in Brazil will go down with him. As one party founder put it, it is bad with Lula, worse without him. Since his landslide election in 2002, Lula has been a point of reference for those who argue that center-left leadership is the best means to achieve both stability and reform in Latin America. Rio-based political scientist Inacio Cano says the scandal engulfing President Lula reaches far beyond Brazil.

Mr. INACIO CANO (Political Scientist): Lula was--the promise of a non-confrontational, leftist government that would help poor people do better without the needs of, for example, the social tensions you have in Venezuela. And now this model is fading away. So it is a great loss for the region and, I think, for the world.

(Soundbite of music)

McCARTHY: At an anti-corruption protest along a Rio music-filled beach, 55-year-old Sonia Menezes(ph) sums up the public disgust with the Worker Party that came to power on a wave of hope and goodwill.

Ms. SONIA MENEZES: (Through Translator) It's time for us to change, punish those who are responsible so we can once again believe in our government.

McCARTHY: Today's vote to choose a new House speaker may provide some change. The speaker will steer the legislative agenda ahead of next year's presidential election and help determine whether President Lula faces charges of impeachment over the alleged vote-buying scandal. Julie McCarthy, NPR News, Rio de Janeiro.

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