Mensalão Corruption Trial Begins in Brazil

By Lucy Jordan, Senior Contributing Reporter

BRASÍLIA, BRAZIL – Seven years after the scandal surfaced, Brazil’s Supreme Court on Thursday, August 2nd began to hear the huge cash-for-votes corruption case that threatens to tarnish former President Lula’s legacy and the reputation of the ruling Partido dos Trabalhadores (Workers’ Party, PT).

José Luis de Oliveira Lima, a defence attorney of former chief minister José Dirceu, speaks to the Supreme Court (STF) during the mensalão trial, Brazil News

José Luis de Oliveira Lima, a defence attorney of former chief minister José Dirceu, speaks to the Supreme Court (STF) during the mensalão trial, photo by José Cruz/ABr.

In what could be a watershed moment for a new, scandal-intolerant Brazil, prosecutors charge that public money was laundered through companies linked to advertising executive Marcos Valerio and paid to some coalition members to settle debts and ensure their support for the PT. Globo calculated the amount of money allegedly siphoned off may be as much as R$100 million.

The scandal, which Attorney General Roberto Gurgel has called “the most daring and outrageous corruption scheme and embezzlement of public funds ever seen in Brazil” has been dubbed the “mensalão,” or big monthly payment, in reference to the bribes legislators allegedly received.

“This is the most important trial in Brazil’s recent history,” said Greg Michener, a political scientist at Fundação Getúlio Varas, specializing in transparency. “[It] will decide whether impunity and all its associated ills – disregard for the law, and citizen cynicism, among the most grievous – will persist.”

The most prominent of the 38 high-profile defendants, who are accused of corruption, racketeering and money laundering, is José Dirceu, former chief of staff to Lula, who allegedly oversaw the scheme. A powerful figure in the PT, he was initially groomed as Lula’s successor but resigned in 2005 after the scandal broke, allowing President Dilma Rousseff to rise in his place and run for president in 2010.

On Monday, Dirceu gave his defense along with four others accused of the most serious involvement in the scheme: former PT president José Genoino, former PT treasurer Delúbio Soares, and businessmen Valério and Ramon Hollerbach. The lawyers for all five denied the charges and, according to Correio Brasiliense, tried to discredit the whistleblower, Roberto Jefferson, calling the accusations “invented” and “fanciful.”

José Dirceu with ex-president Lula in 2005 the year the scandal surfaced, Brazil News

José Dirceu with ex-president Lula in 2005 the year the scandal surfaced, photo by Marcello Casal Jr/ABr.

Lula has denied any knowledge of the mensalão, and has not so far been implicated. But there are fears that the case could damage the former union leader’s continued popularity, whose eight years in office saw an average annual GDP growth of over four percent, and some 35 million Brazilians brought out of poverty.

In May, it was reported that Lula was so worried about the case that he lobbied the court to delay until after October’s municipal elections. Lula has admitted meeting with court officials, but denied putting pressure on them.

“[The mensalão] could diminish Lula’s legacy,” said David Fleischer, a professor of political science at the University of Brasilia. “It’s going to spill mud over the PT and there may be some testimony that involves Lula directly. We will have to wait and see.”

While her party may be affected, the mensalão is unlikely to tarnish President Rousseff directly, experts say. Rousseff is not accused of involvement in the scandal, and has taken pains to maintain her distance, with reports that she has banned her staff from mentioning the scheme publicly at all.

Since taking office in 2010 Dilma has taken a tough line on corruption. Seven ministers accused of corruption have resigned under her watch, and she has overseen the implementation of a freedom of information law that has seen the salaries of public officials released online. “[President Rousseff] has anti-corruption credentials, so her popularity is not going to be directly affected by the mensalão scandal,” said James Bosworth, a consultant working on Latin American issues.

In fact, said Mr. Michener, harsh sentences in this unprecedented trial, in the wake of Rousseff’s moves toward a more transparent government, could actually be a boon for the current PT administration. “People will associate the government with putting a decisive stamp on the legacy of impunity, even if it is not the government’s doing.”

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