MercoPress. South Atlantic News Agency

Yet another scandal rocks Brazil and Lula's ruling party

With less than two weeks for the presidential election Brazil was again rocked by yet another political scandal allegedly involving the ruling Workers Party with the purpose of smearing the reputation of opposition candidates.

According to Brazil's Federal Police an attorney with close links to President Lula da Silva's Workers Party was arrested Friday with 800.000 US dollars which were to be paid for a dossier implicating Jose Serra a former Public Health Minister and 2002 presidential hopeful, who is currently the leading candidate to become governor of the state of Sao Paulo, the union's richest and politically most influential.

Mr. Serra belongs to the Brazil Social Democrats and is a close ally of former president Fernando Henrique Cardoso, and apparently the dossier links him to the "blood sucking" mafia which skimmed millions of US dollars from the federal government with the purchase of a thousand ambulances at overblown prices.

Attorney Gedimar Passos, arrested in Sao Paulo with the money said he was working on instructions from a leader of the Workers Party whom he did not identify and provided him with the funds for the transaction.

Almost simultaneously the leader of the "blood suckers" gang and a close relative and associate were arrested in the state of Matto Grosso. They are Luiz Antonio Vedoim and Paulo Roberto Trevisan who allegedly were offering the information involving in the ambulances scam Jose Serra and his party's presidential candidate, Geraldo Alckmin, and leading opponent of President Lula da Silva's re-election bid.

The dossier exposing Mr Serra includes a video showing the delivery of ambulances in 2001 in Matto Grosso when he was Health Minister and another document portrays then Sao Paulo governor Alckmin shaking hands with a close associate of Vedoim in 2003.

Vedoim and his father Darci have confessed to having bribed tens of Congress members to have the budget funds for the ambulances approved, an operation they allege begun when Mr. Serra was head of the Health Ministry. The Brazilian Congress is currently investigating 69 Deputies and three Senators for allegedly taking bribes from Vedoim. Brazilian courts are questioning 84 members of Congress.

Vedoim's accusations occurred a day alter President Lula da Silva, who is forecasted to win the October first election in the first round, publicly claimed that "80% of corruption scandals", actually begun during the administration of his predecessor, Fernando Henrique Cardoso.

"The Federal Police is investigating who ordered the dossier and where did the money come from", said Justice Minister Marcio Thomaz Bastos, who described the smear attempts as "gross stupidities".

Workers Party chairman Ricardo Berzoni disclaimed any links with the case and condemned the "attempt to blackmail Mr. Serra" adding that those involved will be suspended from the party.

Mr. Serra said it was yet another attempt to fabricate scandals and tarnish his successful campaign for governor.

President Lula called the whole operation, "abominable" adding that this is "totally absurd" and only helps "to discredit politics and politicians".

Candidate Alckmin said it was another case of "corruption, fraud and blackmail linked to the ruling Workers Party".

He was referring to last year's major scandal in Congress which included a slush fund, skimmed from federal programs and soft loans, to ensure support for the government's legislation. When the scheme was exposed President Lula's closest aides, several ministers and over twenty members of Congress, belonging to the ruling coalition, were forced to resign. The investigation is still on.

All along President Lula da Silva denied any knowledge of the illegalities and somehow managed to survive unscathed since he's leading comfortably in the public opinion polls for October first elections.