Brazil scandal draws in Lula’s chosen successor

The expected ruling party candidate in Brazil’s 2010 presidential election has been drawn into a scandal by an accusation that she tried to stop a probe into the finances of the Senate chief’s family.

The alleged involvement of President Luiz Inacio Lula da Silva’s chief of staff, Dilma Rousseff, underlines the growing risks posed by the two-month-old corruption scandal for Lula’s hopes of getting her elected as the Workers’ Party candidate in October next year.

Lula’s backing of embattled Senate chief Jose Sarney has raised criticism that he is turning a blind eye to graft in exchange for support from Sarney’s party for Rousseff’s bid.

A former senior tax official said in an interview with Estado de Sao Paulo newspaper on Wednesday that Rousseff asked her to “speed” the probe of a son of Sarney, who is accused of nepotism, embezzlement and overseeing a secret scheme of perks and pay for staffers and relatives.

Lina Maria Vieira, the former head of Brazil’s tax agency, says Rousseff had clearly meant her to close the investigation into Sarney’s family in the meeting that she said took place at the end of last year.

“I was there at the invitation of the minister,” she told Estado. “The secretary that was there saw it, and it was registered.”

Rousseff has denied that the meeting took place.

Vieira left her job last month, with media reporting she had been asked to quit after her agency launched a probe into alleged accounting irregularities by oil firm Petrobras without the finance minister’s approval.

Sarney’s centrist Brazilian Democratic Movement Party (PMDB), Brazil’s biggest, guarantees Lula’s narrow majority in the Senate and would play a crucial role in helping elect Rousseff, who lacks Lula’s sky-high approval ratings and is trailing in early opinion polls.

The scandal has already delayed crucial reforms, opened a rift between the Workers’ Party Congress members and the PMDB, and is likely to favor Sao Paulo state Governor Jose Serra, the presumed presidential candidate of the centrist opposition PSDB party, who heads opinion polls.

After appearing close to resigning last week, Sarney has gained support and appears likely to survive.

But the allegations against Rousseff give the opposition a chance to keep the pressure on the government — it has called Vieira to testify next week at a Senate commission.

“I think it’s dangerous for Dilma, it has the potential to become a big problem,” said Joao Pedro Ribeiro, a political analyst at Tendencias consultancy in Sao Paulo.

“The opposition has the ability to make this drag for a while just when Dilma is looking ahead to the electoral race next year.”