President Luiz Inacio Lula da Silva has come under growing fire with the emergence of a two-year-old videotape that shows a senior government official soliciting campaign contributions for two of the party's candidates and offering lucrative political favors in return.
The official, Waldomiro Diniz, was fired on Friday, hours after the incriminating video appeared on the Web site of Epoca, a weekly newsmagazine. But the resulting scandal threatens to engulf the left-wing government led by the Workers' Party, which has always portrayed itself as the only squeaky-clean force in the murky world of Brazilian politics.
Da Silva is the founder and historic leader of the party, and he ran three times for president as its candidate before finally winning in 2002.
"Lula is confronting the most delicate moment of his administration," the daily Jornal do Brasil warned on Sunday morning.
Opposition leaders have responded to the revelations by calling for a congressional investigation and demanding the immediate resignation of Jose Dirceu de Oliveira e Silva, the president's chief of staff and the immediate superior of Diniz.
The president of the Workers' Party, Jose Genoino, has tried to distance the party from the scandal and the damage it has done by arguing that Diniz is "not enrolled in the party." But newspaper reports and opposition leaders have countered by noting that Diniz not only is a former roommate and longtime political associate of Dirceu but also held one of the government's most delicate jobs, that of the executive branch's liaison to Congress.
"You can say that he is the right-hand man of the right-hand man of the president of the republic," the columnist Eliane Cantanhede wrote in the daily Folha de Sao Paulo.
"The damage has been done, and done thoroughly," she added. "The government is reeling, even before the eve of Carnival."
The videotape and an accompanying transcript show Diniz, then the head of the state lottery in Rio de Janeiro, agreeing to rewrite an online lottery contract so as to favor a numbers game kingpin known as "Charlie Waterfall."
In return, the numbers-game boss agreed to contribute more than US$100,000 to the Workers' Party candidates for governor in Rio and Brasilia during the 2002 general election and to pay a 1 percent "tip" to Diniz.
The numbers scandal has erupted as the Workers' Party is facing other potentially damaging corruption accusations. In Sao Paulo, prosecutors have reopened an investigation into the January 2002 killing of Celso Daniel, mayor of the city of Santo Andre and a top official in da Silva's campaign, whose death they now say was the result of a dispute over a multimillion-dollar kickback scheme.
One of Daniel's brothers has said publicly that a senior government official admitted to him that suitcases stuffed with cash in amounts up to US$600,000 were regularly delivered to Dirceu, then the president of the party, for a campaign slush fund.
Da Silva himself has not commented directly on the new situation. But at an event in Rio on Friday night commemorating the 24th anniversary of the founding of the Workers' Party he expressed his support for Dirceu and other party leaders.
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