Brazil's left-leaning government sought to control the damage from its first significant corruption scandal on Monday, dismissing opposition calls for a congressional investigation and promising to uncover the facts itself.
The so-called "Waldomiro Affair" has rattled investors and brought calls for the dismissal of Jose Dirceu, powerful chief of staff in President Luiz Inacio Lula da Silva's government.
The scandal broke on Friday when the weekly magazine Epoca reported that an adviser to Dirceu had collected campaign funds for Lula's Workers Party in 2002 in return for political favors.
The official, Waldomiro Diniz, was fired the same day.
"The government has reacted, it has launched an investigation," Workers Party head Jose Genoino said on Monday. "A congressional investigation makes no sense."
But opposition figures demanded a probe.
"Waldomiro was in the Planalto Palace, the cathedral of power. Now, are there more Waldomiros in the government? That's what a commission must investigate," said senator Jose Agripinio Maia of the rightist Liberal Front (PFL).
Dirceu told congress that no wrongdoing had been found in the current government, which took power in January last year.
If a congressional investigation is launched, it could hog the political limelight and make it hard for congress to pass the economic reforms that are a keystone of Lula's agenda.
"In Brazil, a congressional investigation is not aimed at investigating but a political instrument to harm the government as much as possible and that can reduce governability and could paralyze important projects to preserve confidence," said Mailson da Nobrega, a former finance minister.
In the financial markets, the currency backtracked slightly and stocks tumbled on Monday on fears that the scandal might force the government's economic agenda to the back burner.
"It's hard to convince foreign investors that this is a serious country and a safe place to invest when stories like this emerge," said Fabio Watanabe, portfolio manager at Fibra Asset Management in Sao Paulo.
So far, the government has won approval from Wall Street for its pragmatic policies in the fight to turn around Latin America's largest economy, but successful reforms are crucial to long-term-stability, analysts say.
However, the timing of the scandal might favor Lula, political analyst David Fleischer said.
Many legislators are already leaving Brasilia for the Carnival holidays, when the country shuts down.
They will not return until the end of the month, by which time the issue could have gone off the boil.
It still could tarnish the clean image of the Workers Party, which in its years in opposition often denounced the corruption which infested Brazilian politics.
Diniz was reported to have received funds from an illegal gambling operation for the Workers' Party campaign.
Brazil's biggest recent scandal was in 1992, when President Fernando Collor was hounded from office amid impeachment proceedings over corruption allegations.
Some minor scandals have hit the Lula government, such as former Social Assistance Minister Benedita da Silva, who used public funds to fly to a religious meeting in Argentina last year.
She was fired in a cabinet reshuffle last month.
CONDITIONS: The Russian president said a deal that was scuppered by ‘elites’ in the US and Europe should be revived, as Ukraine was generally satisfied with it Russian President Vladimir Putin yesterday said that he was ready for talks with Ukraine, after having previously rebuffed the idea of negotiations while Kyiv’s offensive into the Kursk region was ongoing. Ukraine last month launched a cross-border incursion into Russia’s Kursk region, sending thousands of troops across the border and seizing several villages. Putin said shortly after there could be no talk of negotiations. Speaking at a question and answer session at Russia’s Eastern Economic Forum in Vladivostok, Putin said that Russia was ready for talks, but on the basis of an aborted deal between Moscow’s and Kyiv’s negotiators reached in Istanbul, Turkey,
In months, Lo Yuet-ping would bid farewell to a centuries-old village he has called home in Hong Kong for more than seven decades. The Cha Kwo Ling village in east Kowloon is filled with small houses built from metal sheets and stones, as well as old granite buildings, contrasting sharply with the high-rise structures that dominate much of the Asian financial hub. Lo, 72, has spent his entire life here and is among an estimated 860 households required to move under a government redevelopment plan. He said he would miss the rich history, unique culture and warm interpersonal kindness that defined life in
AERIAL INCURSIONS: The incidents are a reminder that Russia’s aggressive actions go beyond Ukraine’s borders, Ukrainian Minister of Foreign Affairs Andrii Sybiha said Two NATO members on Sunday said that Russian drones violated their airspace, as one reportedly flew into Romania during nighttime attacks on neighboring Ukraine, while another crashed in eastern Latvia the previous day. A drone entered Romanian territory early on Sunday as Moscow struck “civilian targets and port infrastructure” across the Danube in Ukraine, the Romanian Ministry of National Defense said. It added that Bucharest had deployed F-16 warplanes to monitor its airspace and issued text alerts to residents of two eastern regions. It also said investigations were underway of a potential “impact zone” in an uninhabited area along the Romanian-Ukrainian border. There
A French woman whose husband has admitted to enlisting dozens of strangers to rape her while she was drugged on Thursday told his trial that police had saved her life by uncovering the crimes. “The police saved my life by investigating Mister Pelicot’s computer,” Gisele Pelicot told the court in the southern city of Avignon, referring to her husband — one of 51 of her alleged abusers on trial — by only his surname. Speaking for the first time since the extraordinary trial began on Monday, Gisele Pelicot, now 71, revealed her emotion in almost 90 minutes of testimony, recounting her mysterious
RSS