MercoPress. South Atlantic News Agency

Corruption ring nested in Lula's office

The Brazilian government launched an aggressive counter campaign to deter the impact of a corruption ring exposed by the Brazilian press that forced the resignation of a high ranking official from the office of President Lula da Silva's most trusted and powerful advisor.

Parliamentary Affairs Deputy Chief Waldomiro Diniz resigned after the Sao Paulo magazine "Epoca" revealed, with text and pictures, that he regularly received money, in exchange for political favours, from one of the most notorious figures linked to the popular "numbers" gambling industry. The money allegedly was invested in financing political campaigns.

But Mr. Diniz happened to be the most trusted man of Jose Dirceu, a former guerrilla, who spent many years exiled in Cuba and who is President Lula's most influential --and feared--, advisor and Minister of the Presidency.

Mr. Dirceu who this Monday was in Congress for the opening of the new ordinary legislature period said President Lula da Silva had ordered a thorough investigation by the Police of the whole incident and rejected any Congressional inquiry committee arguing the exposure dated back to 2002, "before the Lula administration that took office January 2003".

However the opposition has insisted it is necessary to determine: "how many more Waldomiro's does this administration nest?", recalling that Mr. Lula da Silva's left wing party during the last twenty years consistently appealed to inquiry committees whenever alleged corruption incidents emerged.

A total of 27 signatures out of 81 senators are needed to start a Committee but the government is confident that the recently formed coalition that includes conservative parties will be sufficient to abort the initiative.

Whatever the outcome the price for the Lula da Silva administration could be dear. If the committee initiative finally fails, Mr. Lula will have a long list of political favours creditors. If the committee actually is named, it can become a mud slinging arena for the government ever so distant from its neo-Marxist origins and ever so close to the most orthodox market policies and reforms.

And even when this exploded just a few days from Brazil's most spectacular three days feasting and dancing, Carnival, it will have an impact in the second stage of reforms that include labour flexibilisation (making it easier for bosses to contract, fire and negotiate salaries with employees while weakening union rights), changes in the Judicial branch and in the political system.

The pristine Workers Party after all is not corruption-free and incidentally has "pinched" and sponsors the most orthodox, liberal economic policies, anathema to the former union leader Mr. Lula da Silva and his followers?while in opposition.

Besides, the Diniz incident promises to continue in the press. Apparently the financer of the illegal gambling caught red handed with Mr. Diniz was also a very close friend of a former governor of Rio Grande do Sul, causing the Workers Party to loose control of the state in the last election.

This however did not impede President Lula da Silva from naming Oscar Brito as a junior member of his cabinet. (Be sure not to miss the next number of Epoca).