Thursday, May 11, 2006

Brazil's Lula Spared New Scandal as Former Ally Backtracks

Written by Newsroom
Thursday, 11 May 2006

The former chairman of Brazil's ruling Workers Party, Silvio Pereira, on Wednesday, May 10, backed away from sweeping corruption allegations he made in a recent newspaper interview, apparently averting a rekindling of the corruption scandal that has rocked the government.
Silvio Pereira stunned a congressional probe questioning him Wednesday about his printed allegations that businessmen illegally financed ruling-party political campaigns and allegedly paid legislators to support the government in Congress.
Pereira's interview Sunday, May 7, in the Rio de Janeiro daily O Globo threatened to reopen a corruption scandal that has plagued the government since last year. But Pereira backtracked.
"I don't know what is true and what isn't," he told senators.
Pereira was quoted in O Globo on Sunday saying that the party intended to raise a billion reais (US$ 484 million) in undeclared campaign funds through dealings with a "pool" of companies that had interest in winning government contracts.
Until now, only businessman Marcos Valério de Souza, a former PT fundraiser, has admitted he took part in the scheme. But Pereira said in the O Globo interview that many more were involved.
In his Wednesday testimony, however, he backed away from the allegations.
"I don't know where I got that from the press, from hearsay or from my own head," Pereira said.
Top party and government officials resigned when the scandal broke. Among them was Pereira, who admitted he took a US$ 60,000 luxury vehicle as a gift from an advertising company.
President Luiz Inácio Lula da Silva has not been personally linked to the scandal, and public opinion polls indicate he will likely win October's national elections. Silva hasn't confirmed he is a candidate but is widely expected to run.

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