What You Need to Know About Brazil's Petrobras Scandal
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Former Brazilian President Luiz Inacio Lula da Silva was taken in for questioning last week for his alleged connection to the Lava Jato scandal involving the country's state oil company, Petrobras.

The Petrobras scandal has long been a thorn in Brazil

The Petrobras scandal has long been a thorn in Brazil's side. Over the past two years, over 100 people have been arrested for their alleged involvement, including senators and top executives at Petrobras.

President Dilma Rousseff has also been implicated in the scandal by mainstream media and is facing threats of impeachment, even though she is not formally being investigated.

But what is this scandal plaguing so many of Brazil's top politicians?

What Is Lava Jato?

It is an investigation that uncovered a web of corruption in Brazil's Petrobras, as well as a host of financial and political problems. It was discovered in 2014, but experts estimate that criminal activities were being developed for 10 years.

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Lava Jato, Portugese for car wash, is one of Brazil's largest corruption investigations. The scheme consisted of companies bribing senior Petrobras officials and other public offices to get “overbilled” contracts with the state oil company.

Dozens of senior executives of construction companies have already been detained for their alleged involvement in the scandal between 2004 and 2012. The diverted money amounts to some US$8 billion.

When Did the Case Become Public?

The case became public when investigators started to question the movement of billions of Brazilian reais abroad, and throughout the country, through seemingly legitimate businesses.

One of these early schemes used car wash establishments for the money laundering operations. This is where the name Lava Jato was born.

Experts handling the case also found the connections of these money laundering schemes with the state owned oil company Petrobras.

What Is Rousseff's Connection to the Scandal?

Rousseff is not under investigation for any involvement in the scandal, but she was the chairwoman of Petrobras when many of the alleged kickback schemes were hatched.

Due to this connection, many have tried to link her to the corruption scheme, including Brazil's media giant Grupo Globo which is using the allegations to openly call for Dilma's impeachment – a call backed by prominent opposition lawmakers.

Critics say the allegations are nothing more than an attempt to discredit Rousseff's administration, adding that the media has long played a role in trying to portray the ruling PT party as bureaucratic and corrupt, and that it has inefficiently managed the state resources.

What Is Lula's Connection to the Scandal?

Former President Lula da Silva was arrested Friday and taken in for questioning over the Petrobras scandal. However, Lula claims the arrest was arbitrary and illegal because he had never refused to testify and has already been absolved by the Brazilian courts of all corruption allegations.

Lula's arrest happened just after he announced that he would consider running for president in the next elections. Lula's return to the presidency is seen as one of the only ways the left-wing Brazilian Workers' Party could stay in power since current President Dilma Rousseff has seen public support plummet – mainly for her alleged connection to the Petrobras scandal and Brazil's weakening economy.

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But critics say both Rousseff and Lula are facing a smear campaign by opposition parties, seeking to make it look as though the ruling PT party has lost control.

Following the announcement that he could potentially run again for president – what would be a major blow to the country's right-wing opposition given his popularity – he was arrested for allegedly orchestrating a plot to buy off a witness in the Petrobras scandal and was later detained on suspicion that he had directly benefited from the scandal. In a separate case, Sao Paulo prosecutors are seeking Lula's arrest for other money laundering charges and making false declarations.

If a judge decides to send him to trial, Lula could face up to 13 years in prison, essentially barring him from the next presidential election.

Brazilian Minister of Labor and Social Health Miguel Rossetto said Lula's arrest is “a clear attack on what Lula represents as a politician and social leader,” adding that he has always been open and willing to cooperate with authorities.


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