Mon, Aug 01, 2005 - Page 7 News List

Brazil's president battles widening scandal

BRIBERY ALLEGATIONS Lula's party stands accused of vote-buying and accepting kickbacks, in a corruption scandal that could dash the president's reelection chances

AP , RIO DE JANEIRO, BRAZIL

His voice hoarse, his arms waving, President Luiz Inacio Lula da Silva told a cheering crowd that Brazil's "elites" would not break him, that he had learned from his poor, illiterate parents not to lie or to steal.

"With a lot of sacrifice, I earned the right to hold my head up high," he told an applauding oil workers union.

Silva, a former union boss elected in a landslide with pledges to make Brazil a "decent country," is back on the campaign trail. But this time it's to save his presidency from corruption charges, regain the trust of voters -- and avoid possible impeachment.

The president, known by the nickname Lula, is in the eye of a political hurricane, battling allegations that his leftist Workers Party, or PT, was involved in multimillion-dollar bribery scandals, buying votes in Congress and negotiating loans and kickbacks with advertising agencies and state-owned companies.

The scandal threatens to destroy the party's anticorruption image and could very well sink Silva's chances for re-election next year, although the president himself so far remains relatively unscathed by the allegations.

"This is the worst crisis ever since the country returned to democracy" two decades ago, said Luciano Dias, a political analyst in Brasilia.

The scandal has fascinated Brazilians, who follow the live, televised congressional hearings as eagerly as soap operas. In just weeks, eight cabinet ministers have been changed and half a dozen high-ranking PT officials have been dismissed.

Many Brazilians still identify with Silva, a former shoeshine boy, high-school dropout and lathe operator who defied Brazil's military leaders and rose to become congressman and president. Polls show he is still the strongest candidate in next year's election.

"So far nothing has stuck to him. It is possible that he will choose not to run for re-election, but only if his popularity falls deep down, which hasn't happened despite all the allegations," said David Fleischer, a political scientist at the University of Brasilia.

For now, there is little fear that the scandal endangers Brazilian democracy, restored in 1985 after a 21-year military regime.

The economy seems unaffected, and most analysts think the worst that could happen would be for Silva to give up his re-election bid.

Yet the congressional probe is spreading. Opposition leaders are under scrutiny, and Silva's predecessor, former President Fernando Henrique Cardoso, apparently fears a probe into his government, declaring that the facts of his administration are past history. But that may not save him from scrutiny.

"Corruption is not yogurt, with expiration dates," said PT leader Aloisio Mercadante. "Everything has to be investigated."

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