New denunciations of Brazilian deputy and evidence make things difficult for Lula

On June 30, in Brazil, deputy Roberto Jefferson testified to deputies and senators of a Commission that is investigating the alleged Post Office Service scandal. Jefferson's testimony along with new evidence supporting his testimony are putting the government of President Luiz Inácio Lula da Silva in a difficult situation.

Roberto Jefferson's testimony ran from 4 p.m. to close to 2 a.m. (local time). The deputy further explained the alleged corruption scheme involving the Brazilian Workers' Party (PT).

The testimony of Jefferson was at times very tense, and sometimes discussions between Jefferson and deputies of the Workers Party become heated. In one instance, a Workers' Party deputy attacked Jefferson's credibility, calling him a liar on the basis that he supported the former Brazilian President Fernando Collor de Mello, who suffered impeachment for corruption related to Treasurer Paulo Cesar Farias, who worked on Collor's campaign. Jefferson answered: "PC Farias is a chick when you see the corruption in PT", and accused the former governor of Rio Grande do Sul Olivio Dutra (Olivio Dutra is the minister of Lula at the present time) of involvement with the "Jogo do Bicho" (illegal gambling).

According to Jefferson, the President of the Worker's Party José Genuino, former Minister José Dirceu, Secretary-General Sílvio Pereira, and Treasurer Delúbio Soares, head a widespread national corruption scheme which involves the Workers Party, members of the Government, the Brazilian Agency of Intelligence, and both government and private enterprises. Jefferson said the President was unaware of this scheme. Some members of parliament from the opposition see this claim as strange.

During his last testimony, Jefferson said that entrepreneur Marcos Valério was responsible for finacing the payment of deputies of the alleged Votes-for-cash scandal. This week, investigations by the police showed that Marcos Valério withdrew, in cash, large sums of money from Rural Bank. According to Jefferson, this money was used to pay deputies. Valério said that he used the money to buy cattle and that farmers don't like to receive cheques, just "real money". His explanation was considered suspect and his former secretary said she does not know of any farms owned by Valerio.

Marcos Valério is part-owner of SMPB and DNA. Documents from the Agrarian Reform Institute (INCRA) showed that Valério's enterprises owned 10 big farms. According to an article published by the newspaper O Estado de São Paulo on July 1, at least two of these farms do not exist. The Brazilian Federal Police said that there is evidence sufficient to indict Valério. The accusations against Valério are tax evasion and money laundering.

According to Internal Revenue Service, Marcos Valério's fortune was R$ 230,000 (97,676.27 USD - Live mid-market rates as of July 3, 2005, 12:47:43 UTC.) in 1997 and R$ 14,000,000 (5,945,511.97 USD) in 2004, a growth of 6086%. The enterprises of Valério, SMPB and DNA, have contracts with five Ministeries and eight big public enterprises, including the Post Office Service.

Before his testimony to the Commission, Jefferson said that Furnas, an energy company in Brazil, was involved in a corruption scheme. According to Jefferson, money from the enterprise was moved to the Workers' Party of Minas Gerais, to the treasurer Delúbio Soares, to be used to buy deputies. Furnas denied this. Presidente Luiz Inácio Lula da Silva said that the allegations should be investigated. Under pressure the Furnas' directors resigned.

On July 2, newspapers reported that according to Brazilian Central Bank's documents, in February 17, 2004, the Workers' Party borrowed R$ 2.4 millions (1,019,230.62 USD) from Marcos Valério. In addition, the documents named José Genoíno (the President of the Workers' Party) and Delúbio Soares (the treasurer). After initially denying that the magazine had taken out this loan, the President of the Workers' Party acknowledged it to journalists on Saturday, July 2.

Delúbio Soares cried during his speech last week and said that the accusations are not true and that the "right" is trying to impeach President Luiz Inácio Lula da Silva on false charges.

The testimony of Jefferson is at the center of discussions in Brazil. According to the PMDB leader, Senator Ney Suassuna, the denunciations are "nitroglycerine which are thrown into the arteries of the Republic every minute". Leader of the PSDB, Arthur Virgílio Neto, said that the government lives in darkness. Senator Peter Simon (PMDB-RS) appealed to President Lula to do an ethical turn-around, and respect the imperatives of morality and seriousness in government. According to Simon: "Today society is still saying that president Lula is a man of good. However, shortly, nobody is going to say that anymore".

On July 1, President Luiz Inácio Lula da Silva opened the celebration of the 15th Anniversary of the Foro de São Paulo, in São Paulo. At 7:30 p.m. the forum was opened and, according to the Workers' Party, the participants expressed support for the government of President Lula. Lula spoke during the encounter with the semblance of a tired and worried man affected by the crisis.

It is expected that the government will began a Ministerial reformulation next week.