Shawn Blore
Tel:(55) 21-8102-4706

Shawn Blore
Tel:(55) 21-8102-4706

Shawn Blore
Tel:(55) 21-8102-4706

The Globe and Mail, Monday, April 5, 2004 -- Page A11




RIO DE JANEIRO -- The pocket tape recorder of a well-known bookie could hold the key to the fate of the embattled Brazilian government and its populist President, Luiz Inacio (Lula) da Silva, embroiled in a corruption scandal that has essentially brought his administration to a standstill.

Six weeks ago, a videotape of a senior government official apparently soliciting bribes and campaign funds from bookmaker Carlos Cachoeira sent the government into a crisis.

The two-year-old tape, shown on national television, showed Waldomiro Diniz, then the President's liaison to Congress, asking for hundreds of thousands of dollars from Mr. Cachoeira in exchange for political favours.

But now another tape recording made by Mr. Cachoeira may pull the administration into the clear, by suggesting that an investigation into government corruption was itself corrupted by politics.

The tape, broadcast on a TV news program last Thursday, records a Feb. 8 late-night meeting between Mr. Cachoeira and a federal assistant prosecutor, Josť Roberto Santoro, who at the time was in charge of investigating possible corruption within Mr. da Silva's administration. In the tape, Mr. Santoro tries to convince Mr. Cachoeira to turn over the first videotape, and seems to relish the political implications of his investigation.

"In a little while the chief prosecutor is going to arrive," Mr. Santoro says. "He's going to come here to my office, and see me taking a deposition to, pardon the expression, screw the chief of staff of the President of the republic . . . that is to destroy the Lula government."

Since the tape aired, Mr. da Silva has said only that the prosecutor's comments were a "very grave" matter.

But his leader in the Senate, Aloizio Mercadante, was less circumspect. "The [tape] suggests political motivations and an intention to conspire, not against the government, but against democracy," Mr. Mercadante told a press conference Friday.

Mr. Santoro, who has been suspended and put under investigation, has denied any political bias, saying he was simply using a prosecutor's tricks to pressure a reluctant witness to hand over important evidence.

Some observers say the latest tape offers Mr. da Silva's party an unexpected chance to get out from under a corruption scandal that had seemed to paralyze the government. "They were looking for anything, and this just fell from sky," said David Fleischer, a political scientist and associate professor at the University of Brasilia.

He believes the scandal has highlighted Mr. da Silva's weaknesses as a leader. "This shows quite dramatically that Lula is the charismatic figurehead of this government. He does not have the day-to-day political management skills to run a government or push through legislation. In that sense, the king has lost some of his clothes."

Mr. da Silva, who was elected on an anti-corruption platform that promised social justice and economic growth, used to enjoy public-approval ratings in the 70-per-cent range. A recent opinion poll found that only 54 per cent of the public approves of how he is running the country.

The corruption scandal has also brought to the surface simmering discontent within Mr. da Silva's governing Workers Party. Despite his leftist credentials, since coming to office in January, 2003, the President has stuck rigorously to a conservative economic policy. Spending has been held in check. Interest rates have been kept in the double digits to stamp out inflation. Economic growth during his first year in office was essentially zero.

This poor performance has led to calls, many from disgruntled Workers Party members, for the Finance Minister to resign. Party members are also unhappy about the government's new social programs, many of which have been announced but then left without funds.

For Mr. Fleischer, the disappointment of the left-wing party members was inevitable. "They've only just woken up and found they were dreaming the wrong dream."

Even within the cabinet, signs of disarray have emerged. "The President has disappeared from the scene because he wants to keep his distance from anything that can hurt his popularity," Senator Jorge Bornhausen, a leader of the opposition Liberal Front Party, told The New York Times. "But it's too late for that."

Mr. da Silva, meanwhile, shrugs off the criticisms and complaints. "Don't expect me to be anything more than the President of the republic," he said in a recent speech at a car factory near Sao Paulo.

"I don't have the powers of God to work miracles."

Shawn Blore is a freelance correspondent based in Rio de Janeiro

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