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Brazil President's Party Secretly Got $3 Million From Cuba, Magazine Says

Both governments deny the allegation

NY Times
October 31, 2005

RIO DE JANEIRO, Oct. 31 - During Luiz Inácio Lula da Silva's successful presidential campaign in 2002, his Workers' Party received up to $3 million in illegal campaign contributions from the government of Cuba, according to the cover story in the current issue of Brazil's leading weekly newsmagazine.

The report, which both the governing party and the Cuban government have denied, has reignited the wide-ranging corruption scandal that has paralyzed President da Silva's government for nearly six months. After a month of muted complaints that conveyed a sense that the worst was over, opposition leaders have reacted with threats of a new, politically exhausting investigation and even impeachment proceedings.

"This is a serious occurrence in every respect," Senator Tasso Jereisatti, a leader of the center-left Brazilian Social Democratic Party, said in an interview with the O Estado de São Paulo newspaper, noting that Brazilian law forbids campaign donations from foreign sources. "If it is proven, the president is going to have no alternative - he will not have the conditions to be able to govern, he'll have to give up his job."

The report in Veja magazine did not say how the money, said to be cash in American dollars, was transported from Cuba to Brazil. But it quoted two party functionaries, both former aides to Antonio Palocci, who was a senior member of Mr. da Silva's campaign team and is now the minister of finance, as saying the money had been delivered by a Cuban diplomat, hidden in cases of Johnny Walker whiskey and flown to Mr. da Silva's campaign headquarters.

Vladimir Poleto, an economist, who identified himself as a courier for one shipment of money, said in the magazine account, "I took a plane from Brasilia bound for São Paulo with three boxes of liquor," adding, "Afterwards, I learned that there was money in one of the boxes."

Mr. da Silva, who has maintained all along that he was unaware that a multimillion-dollar slush fund was being used to buy the support of members of Congress and to pay his media adviser's bills off the books, has not yet commented directly on the accusation. But the president of the Workers' Party, Ricardo Berzoini, dismissed the Veja report as false and politically motivated.

"It's completely baseless," he said. "Veja is acting like a front of attack on the government and not as a journalistic publication."

The Cuban government, which funneled money to selected guerrilla groups and left-wing parties in Latin America through the 1980's but which now says it a moribund economy has led it to abandon the practice, also denied the report in emphatic terms.

In a statement, the Cuban Embassy in Brasilia described the Veja article as part of "an orchestrated campaign of lies" motivated by the "aggressive plans of imperialism against Cuba and against Lula."

Veja is Brazil's most widely read publication, with a circulation of over 1.2 million copies weekly. The magazine published the first story detailing a corruption scheme in Mr. da Silva's administration in May, and has followed up with numerous other ground-breaking articles that have subsequently proven to be accurate.

In March, before the current scandal broke, Veja published a report saying that Workers' Party members had discussed a $5 million donation with representatives of the Revolutionary Armed Forces of Colombia, a guerrilla group that earns money from drug trafficking and kidnapping. That report was also vehemently denied, but a congressional investigation later confirmed the existence of intelligence documents indicating those contacts had occurred.

Relations between Fidel Castro and Mr. da Silva and the Workers' Party have always been cordial. The president's closest aide, José Dirceu de Oliveira e Silva, who was president of the party during the 2002 campaign, was exiled for several years decades ago in Cuba, where he received military and intelligence training. And on one visit, an admiring Mr. da Silva told the Cuban dictator, "Thank you Fidel Castro, thank you for existing."

Initially, the corruption scandal, the worst in modern Brazilian history, left Mr. da Silva, who ran on a government platform and will be up for re-election in less than a year, very much on the defensive. Not only has Mr. Dirceu resigned, but the president, secretary general and treasurer of the Workers' Party have also been forced to step down.

But since the election last month of a member of the Communist Party of Brazil, Aldo Rabelo, a da Silva ally, as president of the lower house of Congress, the tide seemed to have shifted somewhat.

Mr. da Silva's standing in the polls has stopped falling, and he and his staff and supporters have stepped up their criticism of the three congressional investigations looking into corruption, calling the probes partisan witch-hunts meant to destabilize Latin America's largest nation.

"By trying to criminalize the Workers' Party and President Lula, the opposition could lead the country to a very negative climate," said Jaques Wagner, Mr. da Silva's chief political operative. "This climate of raising permanent suspicions about the party and President Lula himself is not good for Brazilian democracy."


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This page last updated November 01, 2005
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