Ex-Brazil Tax Chief Says Lula’s Candidate Asked to Speed Probe

The ex-head of Brazil’s tax agency told a Senate committee today that President Luiz Inacio Lula da Silva’s choice to succeed him in 2010 elections suggested she close a tax probe into the family of a key government ally.

Lina Vieira, who resigned last month as head of the tax collection agency, repeated comments made in an interview this month with Folha de Sao Paulo newspaper about a meeting in 2008 with Lula’s cabinet chief and chosen successor, Dilma Rousseff.

Vieira said that at the meeting in the presidential palace Rousseff asked her to “speed up” an investigation of possible tax fraud by the son of Senate President Jose Sarney, whom Lula is counting on to advance his legislative agenda ahead of next year’s vote. Vieira said she took her words as an appeal to close the probe. Rousseff on Aug. 10 said that the meeting never took place.

“I’m here to confirm what I said because there’s no reason to hide the truth,” Vieira told the Senate committee. “I have no interest in creating polemics or hurting anyone. I am here to defend my integrity.”

Vieira’s comments threaten to draw Rousseff into a political drama over alleged abuses by Sarney that has paralyzed the Senate during the past month. Members of Lula’s Workers’ Party and the opposition are seeking Sarney’s removal for allegedly using his post to benefit family members and allies.

Sarney, who was Brazil’s president from 1985 to 1990, has denied any wrongdoing.

Lula yesterday defended his cabinet chief, saying the distracting media “carnival” could be avoided if Vieira provided her appointment calendar or any proof that the alleged meeting took place.

Lula and Sarney

In testimony today, Vieira said the appointment wasn’t marked on her agenda.

Lula also defended Sarney in an interview today. Speaking to Radio Tupi, Lula said Sarney had acted correctly in defending himself against the “hoopla of denunciations” in the Senate.

“It’s not acceptable for people to think an institution’s president can be removed every day,” he said “In that case, nobody is guaranteed stability.”

Vieira resigned last month after surprising members of the government by saying her agency was looking into whether state- controlled oil company Petroleo Brasileiro SA improperly cut its tax bill by 4.4 billion reais ($2.37 billion).

Piaui Report

Vieira’s testimony is the latest setback for Rousseff’s candidacy. Monthly magazine Piaui reported in its July issue that Rousseff never completed a master’s degree, nor is she in the process of obtaining a doctorate in economics, as stated on a resume posted on her office’s Web site.

Rousseff said she wasn’t responsible for the mistake, adding that she never completed her master’s thesis and abandoned her doctoral studies upon joining the government in 2003.

Rousseff trails Sao Paulo state Governor Jose Serra by as much as 26 percentage points among likely presidential candidates in a Datafolha poll published yesterday.

Support for her candidacy was 16 percent in the nationwide poll of 4,100 people taken August 11-13, the same level as in May. The margin of error for the latest poll was 2 percentage points.