Brazil's Supreme Court convicts Lula aides of corruption

BRASILIA (Reuters) - Brazil’s Supreme Court convicted three top aides of former President Luiz Inacio Lula da Silva on Tuesday on charges of diverting public funds to buy political support for his leftist government when it came to power a decade ago.

Brazil's former President Luiz Inacio Lula da Silva gestures during Seminar "Mexico Siglo XXI" in Mexico City, September 21, 2012. REUTERS/Edgard Garrido

In a landmark ruling, the court found Lula’s former chief of staff Jose Dirceu, co-founder of the ruling Workers’ Party, guilty of running a scheme of monthly payments to politicians in exchange for their votes in Congress.

The party’s president at the time, Jose Genoino, and its treasurer, Delubio Soares, were also convicted of corruption. The three men face prison sentences of between two and 12 years.

Two dozen others, including 10 legislators, bank executives and business intermediaries were convicted earlier on fraud, money-laundering or conspiracy charges in the largest political corruption case in Brazil’s recent history.

The Supreme Court has never convicted a politician for corruption before in Brazil. Politicians have tended to get off without penalties in graft or embezzlement cases.

Lula, a key political figure who remains very popular in the South American nation, was not implicated in the case, which has been dubbed the “trial of the century.” The former president has denied the existence of a vote-buying scheme.

There has been no fallout for his hand-picked successor, President Dilma Rousseff, who has built on Lula’s popularity by establishing a reputation for clean government and firing six ministers in her first year due to corruption allegations.

The “mensalao” or “big monthly payments” scandal erupted in 2005 and almost toppled Lula. But he survived and was re-elected in 2006, riding on the success of a booming economy that allowed his government to lift 30 million Brazilians out of poverty.

Dirceu, the most powerful man in Lula’s cabinet who had been seen as his natural successor as president, was forced to resign when the scandal broke and banned from politics, the end of a career that began as a communist student leader and urban guerrilla who fought military dictatorship four decades ago.

He was arrested in 1968 and freed in exchange for the kidnapped U.S. ambassador, a story that became the basis of the film “Four Days in September.”

Dirceu was accused of masterminding the monthly payments to legislators to secure their support in Congress for the government’s agenda during Lula’s first two years in office.

Dirceu said he had been convicted of corruption without proof by a Supreme Court under pressure from the Brazilian media. “I was prejudged and lynched,” he wrote on his blog. “I will accept the decision, but I will not remain silent.”

Politicians convicted of receiving the funds denied they were selling their votes and said the money went to pay off campaign debts. But the Supreme Court ruled that the illegal payments were made to buy political support.

“Legislators were bought to forge the new government’s coalition base. Their votes were exchanged for payments like commodities,” said Supreme Court justice Joaquim Barbosa.

The conviction of Dirceu was a big step for Brazil, where courts have traditionally been timid in punishing corruption. Recent polls had shown few Brazilians expected those implicated in the “mensalao” would be convicted.

Matthew Taylor, an expert on Brazil at American University’s School of International Service in Washington, said Brazil’s judiciary still has shortcomings and impunity in Brazilian politics will not disappear overnight.

“But progress is being made, and the ‘mensalao’ demonstrates there is both public support for anti-corruption efforts and the institutional wherewithal to effectively combat corruption,” he said.

Editing by Cynthia Osterman