MercoPress. South Atlantic News Agency

More details of Brazil's bribe ring in Congress

Two publicity and public relations agencies linked to the bribes scandal shocking Brazil, regularly withdrew large amounts of money from a government bank which were supposedly used by the ruling party for illegal purposes, reports the Sao Paulo magazine “Istoé”.

Apparently documents from the "Financial Activities Office" which were leaked to the national circulation magazine show that two P&R agencies with accounts in the Banco Rural, between July 2003 and May 2005, withdrew cash equivalent to 8,3 million US dollars.

The money allegedly was used by the ruling (Socialist oriented) Workers Party to make monthly payments to Congress members from coalition parties to ensure they remained faithful to President Lula da Silva's administration legislative initiatives, as was made public early June by Lower House member Roberto Jefferson.

The two agencies have as partner a Mr. Marcos Valerio Fernandez, identified by Mr. Jefferson as one of the intermediaries used by the Workers Party Treasurer, Delubio Soares as bribes paymaster to Congress members. The participation of Mr. Valerio in the bribes ring had already been confirmed by his former secretary Fernanda Karina Sommagio who ten days ago revealed to "Istoé" that she regularly saw "millions in cash" leave the office of his former boss.

Ms. Sommagio currently in a witnesses' protection program, said Mr. Valerio managed the publicity accounts for the Brazilian Post Office, Banco do Brasil and other companies with links in Congress. According to the magazine the Federal Police and the Prosecution Office have already identified at least two persons who regularly operated with the two agencies bank accounts.

The corruption scandal that has sent shockwaves in Brazil and virtually paralyzed the Lula da Silva administration last week caused the resignation of Jose Dirceu, the closest aide and most powerful man in the president's inner circle, who according to Mr. Jefferson was well aware of the bribes but did nothing to stop them and abstained from reporting the ring to Mr. Lula da Silva. Mr. Dirceu was replaced by former Energy Minister Dilma Rouseff, a technocrat who doesn't seem to have the political weight needed for the Cabinet chief post. She apparently already has had scuffles with the other powerful man in the cabinet, orthodox Finance Minister Antonio Palocci, whom president Lula da Silva has openly supported and defended from the hard core of the Workers Party.

Furthermore next September the Workers Party is holding a ballot to vote for new authorities and another strong ally of Mr. Lula da Silva, party president Jose Genoino has been targeted as involved in the bribes scandal. It is feared that the radical wing of the party could recover lost ground and hold key posts in the leadership which is not good news for the business oriented approach the current Lula da Silva administration has been enforcing with success and praise from organizations such as the IMF, World Bank and the Davos liberal group, all of them anathema to the radicals.

Such a scenario could even jeopardize Mr. Lula da Silva's re-election chances in October 2006. Until early June, the Brazilian president seemed unbeatable, no longer.