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From a Former President to One of Brazil’s Richest Men, Meet The Top Players in the Petrobras Scandal

Former Brazilian President Lula da Silva was briefly questioned by police Friday. Here's how he may factor into the Petrobras scandal.

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Brazilian police raided the home of former President Luiz Inacio Lula da Silva Friday and investigators publicly accused him of accepting bribes from the country’s state-owned energy giant, Petrobras. The move brought the biggest corruption scandal in Brazilian history even closer to the highest levels of the country’s political elite.

The brief detention of the former leader known as Lula is one the most dramatic twists yet in Brazil’s two-year police probe into the scandal at Petrobras. Dubbed Operation Car Wash, authorities have questioned or arrested more than a hundred politicians and business executives as they investigate whether the company paid at least $2 billion of bribes to top government officials.  

Prosecutors claim that hundreds of project costs were inflated in order for government officials to pocket the extra cash and pump it into their lavish lifestyles, or hand it over to allied politicians, mainly from the ruling Workers Party. Petrobras CEO Maria das Graças Silva Foster and other top officials executives resigned last year, and by January 2016, the company was $104 billion in debt.  

The scandal has rocked Latin America’s largest country and helped send its economy spiraling into its worst recession in a century.

And Lula isn’t the only new one now wrapped up in the probe. Brazilian officials said they issued 33 search warrants and 11 detention warrants for various suspects in Rio de Janeiro, Sao Paulo, and Bahia on Friday alone. 

Matters have only been made worse by the fact that embattled President Dilma Rousseff was chairwoman of Petrobras during a number of the years when corruption allegedly took place. She is now facing calls for impeachment for failing to rein in the country’s embezzlement problem. Depending on the outcome of the probe, the political career of Lula — who may run for president again in 2018 — could be over, and the former head of state could even find himself in prison.

Below, FP has highlighted a few of the biggest players being probed by Brazilian police:

André Esteves and Delcídio Amaral

Esteves, a billionaire banker, and Amaral, who led the ruling Workers’ Party in Brazil’s Senate, were both arrested last November. Esteves was accused of trying to block the ongoing probe, but was released in December, and put under a relatively lenient house arrest and banned from taking any leadership roles at his bank. He founded BTG Pactual investment bank and is the richest person to be implicated in the scandal thus far, with an estimated net worth of $2.3 billion.

Amaral, who was accused of taking kickbacks from Petrobras, was the first sitting senator to be arrested in Brazil. He was quietly released from prison in February amid suspicions he accepted a plea deal to testify against other suspects. Those suspicions might just prove to be true: This week, Brazilian media reported that Amaral unexpectedly agreed to offer Brazilian officials information he has about Rousseff and Lula’s alleged involvements in the scandal. According to the 400-page document he submitted to prosecutors, Rousseff is responsible for intervening in the investigation, and Lula has intimidated witnesses.

Simon Whistler, managing director for political risk for Latin America at the consultancy firm Control Risks, told Foreign Policy that “their arrests were another kind of step up in the case,” adding that until now he doesn’t think “anyone necessarily believed Dilma would be implicated by testimony in court.”

Lula

Lula left office in 2011 as Brazil’s most popular president in recent history. Now prosecutors say they have reason to believe that while he was in power, various companies paid him in order for him to carry out governmental favors on their behalf. Lula denies all charges, and on Friday, a spokesman for the Lula Institute — which the former president established to fight poverty in Brazil — said his questioning was “arbitrary, illegal and unjustifiable.”  

Whistler told FP that if Friday’s questioning turns out to just be the beginning of Lula’s connection to the scandal, it could be the end of his political career. “To arrest an ex-president who is still pretty popular with a large proportion of the population shows that from the Brazilian prosecutors’ and police’s point of view, nobody is above the law,” he said.

For the moment, Brazilian police seem confident in the strength of their evidence against the former president.

“Ex-president Lula, besides being party leader, was the one ultimately responsible for the decision on who would be the directors at Petrobras and was one of the main beneficiaries of these crimes,” Brazilian police said in a statement. “There is evidence that the crimes enriched him and financed electoral campaigns and the treasury of his political group.”

Lula has angrily denied all of the charges.

Rousseff

Last October, a parliamentary commission cleared Rousseff of any involvement in fraud related to Petrobras. But that doesn’t mean she’s entirely off the hook: Her opposition believes that she has dramatically failed to curb corruption in Brazil, and last summer hundreds of thousands of them took to the streets to demand her impeachment. More protests are already scheduled for later this month, and Friday’s news means the ranks of her opponents are certain to swell even larger. Lula essentially tapped Rousseff for the presidency, and his brief detention “suggests the circle is kind of getting closer and closer to her as well,” Whistler said. That, in addition to earlier news that Amaral plans to testify against her, means “her position is much weaker today [Friday] than it was at the beginning of yesterday [Thursday].”

Photo Credit: Mario Tama/Getty Images

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