Former Brazilian President Luiz Inácio Lula da Silva – more commonly known as Lula – was imprisoned this month after being convicted of money laundering and corruption, yet he is still planning to stand in October’s election.
In July 2017, federal judge Sérgio Moro convicted Lula of receiving a bung from Brazilian construction company OAS. Moro wrote in his decision:
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“It doesn’t matter how high you are, the law is still above you.”
The evidence comes from accusations made by the CEO of OAS, José Aldemario Pinheiro Filho, known as Léo Pinheiro, in a plea bargain to reduce his own corruption sentence.
Lula’s defence team argued that although the former president’s now deceased wife did express interest in buying the apartment, the lease remains in the name of the OAS. In addition, the defence claimed that Lula’s family did not spend a night at the property and there is no paper evidence to confirm a link between the apartment and the construction firm.
He decided to appeal the judge’s decision in the TRF4 federal appeals court in the city of Porto Alegre.
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By GlobalDataAt the end of January, the three judges in the appeals court unanimously rejected the case and increased his sentence from nine years and six months to 12 years.
Announcing his decision, judge Leandro Paulsen said:
“The greater the power conferred on a person, the greater that person’s responsibility to society.”
Lula’s lawyers decided to request habeas corpus from the Supreme Court, which, if approved, would allow him to remain out of prison while he undertook further appeals about his corruption conviction.
Six of 11 judges in the Supreme Court ruled against Lula’s request. This decision was followed by judge Moro issuing an arrest warrant for Lula.
The warrant said:
In relation to the condemned, ex-presidente Luiz Inácio Lula da Silva, I concede to him, out of respect for the dignity of the position that he occupied, the opportunity to present himself voluntarily to the federal police in Curitiba by 17.00 hours.
Because of the dignity of his position, there has been prepared previously a special room, a kind of staff room, in the federal police station, for the beginning of [Mr Lula da Silva’s] serving of his term, in which the ex-president will stay separated from other prisoners, without any risk to his moral or physical integrity.
After hearing the Supreme Court’s verdict, Lula went to the headquarters of the union of metalworkers, which was where he launched his political career over two decades ago, while his lawyers tried to get the court to halt the prison order.
He defied the court order to hand himself into the police by 5pm on Friday 6 April, which was greeted with cheers by his supporters who surrounded the union headquarters.
However, on the afternoon of Saturday 7 April, he decided to submit and start serving his prison sentence.
He told the cheering crowd outside the Union headquarters:
I will comply with the order. I’m not above the law. If I didn’t believe in the law, I wouldn’t have started a political party. I would have started a revolution.
Lula was president of Brazil from 2003 to 2011. He was the first president from the Worker’s Party (Partido Trabajadores, PT), which he co-founded in 1980.
Despite his imprisonment, he has still declared his desire to stand as the candidate for the PT in the Brazilian Presidential elections in October. In multiple Datafolha polls, he leads the other declared candidates with 36%. His closest rival was far-right politician Jair Bolsonaro for the Social Liberal Party (Partido Social Liberal, PSL) party with 18%.
Lula’s conviction is part of Brazil’s Operation Lava Jato, or Car Wash, which was launched in 2014. The political establishment has been almost entirely discredited as a result of related judicial investigations.
So far, approximately one-third of the cabinet and a significant proportion of Congress have been implicated in corruption scandals, as well as business leaders. Reuters estimates that 100 people have been convicted in Operation Car Wash.
Richard Lapper, associate fellow of Chatham House’s US and the Americas programme, told Verdict:
“The scale of Operation Car Wash has been completely unprecedented for Brazil. It is an extraordinarily wide investigation and has put the entire Brazilian political and business class under scrutiny.”
Consequences of Lula’s imprisonment in Brazil
Under Brazil’s so-called clean slate law, any politician who has been convicted of a crime, which has then been upheld on appeal, cannot run for elected office for at least eight years.
Therefore, the TRF4’s decision in January and the Supreme Court’s decision in earlier this month effectively ends Lula’s hopes of becoming Brazilian President in October’s election.
Paulo Sotero, director of the Brazil Institute at the Woodrow Wilson International Centre for Scholars in Washington, told the Financial Times:
This marks the end of Lula as a viable candidate for the presidency.
Lapper agreed:
It is hard to see how the Tribunal Superior Eleitoral (TSE) would allow him to run.
Despite this, the PT has decided to keep Lula as their candidate until August when Brazil’s electoral tribunal (TSE) will decide if the former president is still eligible to stand in October.
According to experts interviewed by Bloomberg, under the current Supreme Court ruling, Lula is still able to record political adverts to be broadcast on TV and radio and he may be able to participate in televised election debates if authorised by a judge.
A founder of the PT, Luiz Carlos da Silva, otherwise known as professor Luizinho, said:
Lula is our candidate. There is no plan B, C, D or E.
Head of the PT in the state of Rio de Janerio, Washington Quaqua, said:
“To talk about plan B now would divide the party at a moment when our tactic is to strengthen Lula.
“He is our candidate until he decides otherwise. We will take this to the limit.”
Reuters argues that Lula’s conviction has hardened the conviction of the PT that he should be their candidate. This is evident in even party leaders who had previously discussed fielding alternative presidential candidates after Lula’s initial conviction, with them now saying that this isn’t the time to debate other options.
Professor Par Engstrom, senior lecturer at the Institute of the Americas, University College London, told Verdict:
“The big problem the PT has been facing is that it is so closely associated with Lula.
“It is difficult to see what other options they have.”
Thiago de Aragão, partner at Brazilian-based political consultancy Arko Advice, told the BBC:
“From within the Workers’ Party, breaking with Lula is not an option.”
Lapper agreed, telling Verdict:
“The PT leadership is saying Lula will still be their candidate even if he is still in prison. There is no plan B.”
This decision is in line with the PT’s conviction that Lula’s conviction is an act of ‘political persecution’, in the words of professor Luizinho, which would prevent him from contesting the October election that he is the current front runner for.
Lapper told Verdict:
The PT and their supporters argue that the establishment has forced Lula out of an election that he is poised to win but that is not what has happened.
Professor Luizinho added:
“They know he didn’t do anything, there is no proof.”
President of the PT, Gleisi Hoffman, agreed, saying:
“No one has been persecuted more than Lula.”
His lawyer, Cristiano Zanin Martins, told the Financial Times that the arrest order “should never have been issued” and the measure lacks “a legal and juridical basis”.
He added:
What was issued was an anticipated arrest order, it is not a definitive convicting decision against ex-president Lula. According to Brazil’s constitution, he needs to be presumed innocent and should be treated as innocent.
Local PT party leader Cleiton Leite Coutinho said:
“Either Lula is a candidate, or we are going out on the streets, we will not accept any intrusion into Brazil’s democracy.”
In a speech to his supporters outside the metalworkers’ union headquarters, Lula said:
“History a few days from now will prove that the ones who committed a crime were the police chief who accused me, the judge who condemned me and the prosecutors who [falsely accused] me.
“The powerful can kill one or two or three roses but they will never be able to stop the coming spring.”
In an act of solidarity with the former president, more than 60 PT members of Congress have legally changed their names to add Lula.
It is assumed by many that the PT will push Lula as their candidate until the last possible moment, and then if the TSE rejects him, as it is almost guaranteed to do, the party will put forward another candidate.
In this scenario, the PT will have between 15 August and 17 September to select an alternative.
Engstrom told Verdict:
The electoral tribunal will make the decision in August. If at that point he is barred from running, then his political capital will be transferred to another candidate.
They will capitalise on the narrative that it is a politicised criminal trial against the country’s most popular politician.
Aragão told the BBC:
They will make this an act of rejection. The energy from that moment will then be transmitted to the candidate that will be chosen to run on Lula’s behalf.
It is not only PT members that believe that there is something a little suspicious about Lula’s conviction.
Research and advocacy organisation The Washington Office of Latin America (WOLA) compiled a report on Lula’s imprisonment, which concludes with:
While corruption investigations need to run their course, and no one should be above the rule of law, it is difficult to avoid the perception that Lula has been targeted by his political opponents.
WOLA’s conclusion is linked to the speed in which Lula’s prosecution was undertaken, the circumstances of him being a strong presidential candidate and the fact that many politicians from other parties who have been accused of more serious crimes remain free.
AJA Media Solutions co-founder and director Maria Luiza Abbott told Verdict:
The speed in which Lula’s case was presided upon was too quick; it usually takes two years, this one took two months.
There is debate about whether they have conclusive evidence of Lula’s guilt.
Engstrom told Verdict:
There are huge question marks around the judicial proceedings that led to Lula’s convictions.
There are questions about to what extent it is a political conviction.
Experts are undecided about whether Lula’s imprisonment helps or hinders his opposition in the upcoming presidential election.
A major problem is that the electoral race remains ‘very open’ in the words of Chatham House’s Richard Lapper. There are still many parties yet to name their candidates and the continuation of Operation Car Wash and the potentiality for further convictions has created uncertainty.
Bolsonaro, who has trailed Lula in the polls with almost half as much support, is attempting to portray himself as an outsider, despite 28 years in Congress. However, the removal of Lula could blunt Bolsonatro’s hardline position against the left.
Aragão said that “the existence of a candidate like Bolsonaro is a product of the existence of Lula”.
It is possible that without the ability to attack Lula in his campaign, then he loses a significant electoral message.
Engstrom told Verdict:
There is a very significant anti-Bolsonaro feeling in Brazil … In most polls, he is unable to win against other candidates.
AJA Media Solutions researched visibility and levels of engagement on Twitter for each of the declared candidates between 5 April and 12 April. The gap between Bolsonaro and the second and third candidates, Guilherme Boulos and Manuela D’Avila who are both allied with Lula, has narrowed compared with the previous week.
Some experts believe that it will be difficult for Lula to transfer his support and votes to another candidate.
The PT’s predicted strategy of changing candidate so late in the game could be dangerous as it may mean that the party will have insufficient time to campaign.
Engstrom told Verdict:
“One of the main problems facing the PT is that it is too dependent on Lula. It has failed to transition to a new generation.
“The country needs a new generation of politicians, especially in the left and centre-left.
“The polls still show that Lula … would still win the presidency, even now he is in prison.”
The PT has been struggling to increase its level of support over the past few years – Bloomberg reports that the party has lost eight legislators since 2014.
The two PT candidates who are seen as possible replacements for Lula are James Wagner and Fernando Haddad.
Haddad has very low polling numbers because he only has a limited national profile. However, he has not been caught up in graft investigations linked with Operation Car Wash.
Wagner is being investigated for bribery related to the building of one of the stadiums built for the 2016 football World Cup.
AJA Media Solution’s findings for the week of 5 April until 12 April placed Lula in fourth place, although Lula’s Twitter profile was not included in the algorithm. Other potential PT candidates failed to grow their social media presence over the period.
Some analysts believe that Lula’s imprisonment strengthens the odds of a more centrist candidate winning the election.
However, Lapper argues that “moderate politicians who support market-friendly reforms are unpopular. Ideas such as pension reform, which Brazil needs if it is to get its economy moving, are not much liked by voters”. Reuters backs up Lapper’s conclusion.
Although the markets rebounded immediately after Lula’s first appeal was rejected and again after the Supreme Court ordered he continue the appeals process from prison, Lula’s effective removal from the race has created more economic uncertainty because the election is so hard to predict.
On 5 April, the day of the Supreme Court’s decision on Lula’s corruption conviction, Brazil’s benchmark stock index Bovespa led the Latin American gains with a 1.67% increase. The country’s real currency rose 0.44%, it was the only significant move by regional currencies.
São Paulo-based Absolute Investimentos partner Roberto Campos told Reuters:
The ruling takes off the table the worst possible scenario for the market, the biggest downside possible in terms of the election. The guy who was completely not market-friendly is out.
Bovespa fell 0.7% on 9 April because traders are concerned about the outcome of the country’s hardest to predict election in decades. Brazil was the only country in Latin America to experience declines that day.
