Brazil’s former president Luiz Inacio Lula da Silva, once an icon of the left in South America and the man who won Rio its Olympic Games this summer, has been held for questioning as part of a corruption scandal that has rocked the country’s political and business elite.
Police raided a number of Mr da Silva’s properties and took him in for questioning about the Operation Car Wash investigation into a decade-long scheme in which politicians allegedly colluded with business leaders to inflate building contracts for the state-run oil giant Petrobras and skim off billions for themselves.
The dramatic move came a day after the supreme curt ruled that the speaker of congress, Eduardo Cunha, should also be prosecuted for allegedly taking millions of dollars in bribes.
Mr Cunha was leading efforts to impeach Mr da Silva’s protégé, President Dilma Rousseff, whose party has been deeply embroiled in the scandal.
She is also facing a separate investigation into whether she fiddled state accounts to mask the looming economic crisis before the 2014 election, which she narrowly won.
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Questioning today centred on whether two huge construction companies, OAS and Oderbrecht, which profited massively under Mr da Silva’s two terms as president from 2003-11, had been involved in renovating apartments belonging to the former president and his family.
“The suspicion is that the improvements and the properties are bribes derived from the illegal gains made by OAS in the Petrobras graft scheme,” prosecutors said.
They noted that investigators had also turned up evidence that Mr da Silva, who is widely known as Lula, received at least $270,000 in 2014 from OAS with no apparent legal justification by way of improvements and expensive furniture for a beachfront penthouse in Guaruja, a coastal town near Sao Paulo.
Mr da Silva, a former union boss who rose to fame defying Brazil’s military dictatorship before it fell in 1985, has vehemently denied any wrongdoing. He and his wife were summoned by prosecutors last week but declined to appear.
The former president was questioned at a federal police station at Sao Paulo city airport, while there were scuffles between supporters and critics outside one of his raided homes in the city. His Workers Party reacted angrily, declaring on Twitter that “we all must react now”, and launched the hashtag “#LulaPoliticalPrisoner”.
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An institute set up by the once-popular leader said in a statement that Lula’s detention was “an aggression against the rule of law and Brazilian society”.
The arrest brought the Car Wash investigation a step closer to Mrs Rousseff, a former Marxist guerrilla tortured in her youth by Brazil’s junta who was Mr da Silva’s handpicked successor. Although she was energy minister - with oversight of the oil company - when the scam began, she has denied any knowledge of the scheme, which has engulfed some of her closest allies.
The political mayhem has only worsened Brazil’s worst economic crash in a generation, which threatens to set back reforms that Mr da Silva’s party pushed through in the past decade to lift tens of millions of Brazilian out of poverty.
“Brazil’s perfect storm has reached its climax and the likelihood of a sudden change in government, either through judicial or legislative means, has skyrocketed,” said Jimena Blanco, chief Latin America analysts at the UK-based Verisk Maplecroft management consultancy.
She said the implication of Mrs Rousseff’s political mentor in the largest scandal in decade would make it impossible for the president to deny any knowledge of the scam.
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“Lula’s involvement in the corruption scandal is the nail in the coffin for the Workers Party’s legacy and increase social and political pressure for Rousseff to leave office,” she said.