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Page last updated at 07:29 GMT, Tuesday, 4 September 2007 08:29 UK

Q&A: Brazil corruption scandal

Brazil's Supreme Court has indicted 40 people, including a former close aide to President Luiz Inacio Lula da Silva, for their alleged role in one of the country's biggest corruption scandals in recent years.

The affair, known as the "mensalao" (or big monthly allowance scandal), first came to light in 2005, but a decision on legal action has only come now after a lengthy investigation.

What are the main allegations?

The defendants are accused of involvement in an illegal vote-buying scheme.

Brazilian President Luiz Inacio Lula da Silva
Lula has not been personally implicated in the scandal

The "mensalao" relates to payments alleged to have been made each month in 2003 and 2004 to opposition politicians by President Lula's Workers Party (PT), which has a minority in Congress and governs through a coalition of several parties.

The payments, said to be around $13,000 (6,500) a month to lawmakers, were allegedly used to buy their support so they would vote in line with the PT.

The PT is also alleged to have used illicit funds to finance the election campaigns of its members and allies.

The PT acknowledged irregularities in its campaign financing, but repeatedly denied paying bribes to lawmakers from other parties.

Who made the claims?

The allegations were made in June 2005 by Roberto Jefferson, a deputy for the Brazilian Labour Party (PTB) in the lower house of Brazil's parliament. In a newspaper interview, he said the PT was running a vote-buying scheme and was involved in illegal campaign financing.

He later testified at a Congressional hearing that he had accepted money on behalf of the PTB from the PT.

Mr Jefferson, who was stripped of his mandate, has been charged with corruption and money-laundering. He denies the charges.

What stage is the case at?

The Supreme Court has decided there is a case to answer.

The indictment says the scheme was designed to ensure "the continuance of the PT's programme in power by buying political favours from other parties and funding their future and past (by settling debts) election campaigns".

Who are the key figures accused of involvement?

They include President Lula's former chief of staff, Jose Dirceu, who has been indicted on corruption charges.

Prosecutors say that he and other leaders of the PT, together with bankers and publicists, formed a "criminal organisation" that used public and private funds to buy political favours.

Mr Dirceu has denied the charges which his lawyer has said are without foundation.

Other former high-ranking officials facing charges include Jose Genoino, previously president of the PT, Delubio Soares, the PT's former treasurer, and ex-Transport Minister Anderson Adauto.

Four directors of a small private bank have also been indicted, accused of making fraudulent loans to the PT.

Advertising executive Marcos Valerio, who held several contracts with the government, is facing charges of corruption and money-laundering.

In 2003, he personally guaranteed two bank loans to the PT, and in July 2004 he paid a $150,000 instalment on one of the loans.

Such loans were not in themselves illegal. But Mr Valerio assisted the PT at a time when his advertising companies were being paid for work with state-run companies and government ministries.

Opposition lawmakers alleged Mr Valerio was, through those contracts, funnelling taxpayers' money to the PT. Both Mr Valerio and the PT denied the claim.

Is the president in any way implicated?

No-one has suggested President Lula was personally involved in the alleged vote-buying scam, and a majority of Brazilians firmly believe he is honest.

The government acknowledged that Mr Lula was warned about the allegations in March 2005. At the time, he ordered two colleagues to look into the allegations. They reported back that a parliamentary inquiry had investigated similar claims in October 2004, and found no evidence of wrongdoing.

So what has been the scandal's political impact?

The opposition seized on the allegations and made them an issue during the 2006 presidential poll when Mr Lula was running for re-election.

He was forced into a second round, but then came through to win convincingly, mainly on the back of Brazil's economic growth and the popularity of his anti-poverty programmes.

What are the broader consequences of all this?

Despite Mr Lula's re-election, the affair seriously dented the PT's image as a party of honest government.

In 2002, millions of Brazilians voted for Mr Lula in the hope that he would change a political culture that many saw as corrupt and favouring vested interests. But the suspicion has grown that the PT has delivered more of the same.

The "mensalao", one of a number of political scandals surfacing in recent years, has held up the president's efforts to push through important legislation and key reforms.

The legal proceedings are likely to be lengthy, keeping a scandal in the public eye that the president and his supporters hoped they had long left behind them.

SEE ALSO
Lula ally faces corruption trial
28 Aug 07 |  Americas
Brazil's Lula defies his accusers
22 Jun 05 |  Americas
Brazil launches corruption probe
09 Jun 05 |  Americas

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