Former Brazilian president Lula faces probe

OREANDA-NEWS. July 17, 2015. Federal prosecutors in Brazil have opened a formal criminal investigation into popular former president Luiz In?cio Lula da Silva on claims of influence peddling in dealings with embattled Brazilian construction giant Odebrecht.

The investigation is the latest in multiple probes targeting Brazil's biggest engineering and construction firms and top-ranking politicians, and is likely to add more pressure to Odebrecht, which is already embroiled in a massive corruption scheme involving Brazil's state-controlled Petrobras.

In May, prosecutors opened a preliminary investigation into claims that Lula had helped Odebrecht gain construction contracts in Latin America and Africa and preferential financing from Brazilian state-backed development bank BNDES.

The alleged influence peddling relates to the period between 2011 and 2014, after Lula had finished the second-term of his presidency. Lula allegedly accompanied Odebrecht executives on international trips paid for by the firm.

"The Lula Institute is certain of the transparency and legality of ex-president Lula's activities," a spokesperson for the Lula Institute said.

The investigation comes at a particularly difficult time for recession-struck Brazil. A broad corruption investigation has already reached the most powerful business leaders and continues to move closer to Lula's successor, Brazilian president Dilma Rousseff.

Brazil's ruling Workers' party (PT), the left-leaning party Lula helped create, is alleged to have been the main benefactor of a scheme that diverted funds from inflated contracts to Petrobras executives and top-ranking politicians.

Federal police have already arrested some of Brazil's most high-profile businessmen, among them Odebrecht chief executive Marcelo Odebrecht. Odebrecht's 19 June arrest has rattled an already damaged Brazilian civil construction sector. The company, which controls projects in a wide range of industries around the world and has major contracts with Petrobras, is considered too big to fail.

The company denies any wrongdoing and says it is cooperating with investigators.