MercoPress. South Atlantic News Agency

Rousseff and ‘godfather’ Lula da Silva meet to decide on the Palocci crisis

Fears of a weakened President Rousseff image since she has to consult with her mentor Lula da Silva

Brazilian President Dilma Rousseff was expected to consult her predecessor Lula da Silva before deciding whether to dismiss Cabinet Chief Antonio Palocci, who has come under scrutiny for consulting fees he earned while managing Rousseff’s election campaign, according to the Sao Paulo press.

Last month Folha de Sao Paulo reported Palocci earned 20 million Real (12.7 million US dollars) in consulting fees in 2010 while also serving in congress and managing Rousseff’s election campaign. The company, Projeto Consultoria Financeira e Economica Ltda, earned 160,000 Real in 2006, its first year of business, Folha said.

The newspaper also revealed later in the month that Palocci had purchased a flat in a Sao Paulo posh area and an office for which he paid over 4 million US dollars.

Even political allies consider the explanations Palocci gave insufficient to contain the political crisis surrounding him. There is growing fear within the government that the scandal may tarnish the image of President Rousseff and possible names to replace Palocci have also been considered, according to Folha.

Rousseff and Lula da Silva both from the ruling Workers Party were expected to meet sometime over the weekend in the Alvorada Palace, which is the official residence of the Brazilian president, it was reported by TV Globo.

In spite of the attacks Palocci is considered by the Brazilian business community as the minister most permeable to their concerns and demands. During the time he was Finance Minister (2003/2006) under former President Lula da Silva, the former Trotskyite student was considered the “darling kid” of Wall Street but he was forced to resign following a major scandal of corruption and monthly payments to members of congress to vote for legislation.

This is the second time in two weeks that Lula da Silva has been in Brasilia because of the ‘Palocci scandal-crisis’. The cabinet chief has been accused by the main opposition party, PSDB, of ‘influence peddling’ and called on President Rousseff to get rid of him. When the first claims surfaced Lula da Silva strongly supported his former minister.

Palocci who had remained silent all along the revelations last Friday accepted an interview and said his consulting business was “entirely legal” and attributed the claims and exposure to ‘political infighting’, but refused to give the names of clients.

“The minister offered no evidence: he kept to his rhetoric during the interview” said Alvaro Dias head of the PSDB Senate block who is trying to collect support for the creation of an official inquiry commission into the finances of Palocci.

Meanwhile the Brazilian press, only mentioning ‘reliable sources’ says that Rousseff has been considering possible names to replace Palocci, if that was the case, and the emphasis would be on a “technical” profile, a kind of “Dilma’s Dilma”, recalling the fact she was named to head the cabinet under Lula da Silva, following similar scandal situations.

At the time Rousseff who was in the area of Energy was considered a ‘technical’ efficient minister and with such conditions was named in the cabinet.

Some of the names include Planning Minister Miriam Belchior; Maria das Graças Foster, Director of Petrobras and the Communications minister Paulo Bernardo.