MercoPress. South Atlantic News Agency

Illicit money web closer and closer to Lula da Silva

There seems to be no end to the barrage of accusations against Brazilian president Lula da Silva's administration, his Workers Party and now his family, more specifically his eldest son, Fabio, a true history of rags to riches.

Brazil's Sunday press questions how the president's 30-year-old son, Fabio went from being virtually unemployed to having a fortune estimated in several million dollars in the past two years.

The weekly magazine Veja, which had previously exposed several close aides of Mr. Lula da Silva who were forced to resign, published a five-page expose on the business dealings of the younger Da Silva.

Epoca magazine and Jornal do Brasilia also have stories contending that the corruption allegations that have plagued Lula's administration in recent months are now reaching the president himself.

Lula's son, a biologist earned a living teaching English and computer classes until his father took office, reports Veja.

But in December 2003, when Lula da Silva had been in office for one year, Fabio and two partners started three companies to provide public relations services and produce video games. These businesses are now worth 5 million Reales, approximately 2 million US dollars according to the magazine.

The start-up capital for the businesses, Veja indicates, came entirely from soft loans extended by telecommunications company Telemar in which state-owned development bank BNDES has a 25% stake. Public pension funds, meanwhile, hold a 19% stake in the telecom firm.

Telemar confirmed its partnership with the president's son but told Veja there was nothing illegal about the arrangement.

Media reports also raised questions about links between some public Telemar pension funds and banks close to Lula's ruling Workers Party (PT).

The PT has been battered by a wave of corruption allegations in recent weeks.

Education Minister Tarso Genro was elected the new head of the PT early Sunday, replacing Jose Genoino who resigned amid mounting corruption allegations. Mr. Genoino's resignation is believed to have been triggered by the arrest last Friday night of PT leader Jose Adalberto Vieira da Silva, an adviser to Jose Nobre Guimaraes, Genoino's brother and fellow member of the PT's national committee.

Vieira da Silva was arrested at the Sao Paulo airport when he was unable to explain the origin of 200,000 Reales (approximately 85,000 US dollars) in cash he was carrying in a brief case and another 100,000 US dollars he had stuffed in his underwear.

Corruption allegations had previously forced PT secretary-general Silvio Pereira and treasurer Delubio Soares to resign.

The charges also forced the resignation in late June of presidential chief of staff Jose Dirceu, Lula's right-hand man in government and close associate of some 20 years.

"The Workers Party does not buy and does not pay Congress members", said Mr. Genoino on resigning adding, "we have made mistakes ?but we don't practice irregularities, we don't commit illicit activities".

Until now the Brazilian president has remained above suspicion, but an opinion poll published on Saturday 55% of those questioned believe President Lula da Silva was aware of the money and bribes scheme.