Brazilians Shrug Off Corruption Scandals

The Associated Press
Friday, September 29, 2006; 3:44 PM

RIO DE JANEIRO, Brazil -- President Luiz Inacio Lula da Silva appears sure to be re-elected Sunday, but he has lost much political clout due to corruption allegations involving his inner circle.

Orgies involving his party's lawmakers, suitcases of cash to buy votes and now a dirty-tricks probe that forced him to fire his campaign manager have ruined Silva's image as an ethical leader.

Silva won by a landslide four years ago on promises to do more for the poor while keeping his hands clean of the political corruption rampant in Brazil. When the first corruption scandals threatened to topple his government last year, many Brazilians believed Silva would have to clean up the dirty politics to hang onto the presidency.

But at the height of the first major scandal, Silva outraged Brazilians when he responded to a reporter's question about illegal campaign financing by saying, "Everybody does it."

Six members of his Workers Party, including an old friend who ran his personal security detail, face federal arrest warrants for their alleged roles in the effort to buy damaging information about Silva's political opponents.

Silva has not been directly implicated in any crime, but many of his top aides and party officials have been forced to resign. Still, he appears certain of winning again, backed by millions of Brazilians who climbed out of poverty during his first term.

The latest scandal broke weeks before the election, with allegations that the Workers' Party tried to pay $770,000 for a dossier linking Sao Paulo gubernatorial candidate Jose Serra to graft when he was health minister between 1998 and 2002. Many suspect the money came from off-the-books funds kept by the Silva administration, most likely kickbacks from government contractors.

Silva's opponents say the scandal has echoes of Watergate, and their battle cry has been "follow the money."

But off-the-books accounting is so commonplace in Brazil that it even has a slang name: "Caixa dois," Portuguese for "Box No. 2."

"Caixa dois for campaign financing goes back to the caixa dois that companies keep for evading taxes," said David Fleischer, a political science professor at the University of Brasilia. "The companies contribute some of that money to campaigns in hopes of gaining favors."

The president has barely budged in the polls, with recent surveys predicting he will take about 53 percent of the vote and avoid a runoff against his main rival, former Sao Paulo Governor Geraldo Alckmin, who is polling around 35 percent.

Alckmin has been unable to capitalize on the scandal in part because members of his Brazilian Social Democratic Party have been linked to similar corruption schemes during the previous administration.

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