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Lula accused of influence peddling in fighter deal

December 10, 2016

Former Brazilian president Luiz Inácio Lula da Silva and one of his sons have been accused by prosecutors of influence peddling and other crimes in relation to a landmark $4.5bn Saab Gripen fighter jet deal in Latin America’s largest country. 

Prosecutors in Brasília accused Mr Lula da Silva’s son, Luís Cláudio Lula da Silva, of receiving nearly R$2.6m in payments from a consultancy for his father’s promise to intervene to help persuade the government to buy the 36 Gripen fighters in 2013 and for their promised intervention in a separate matter. 

“Technical arguments [in favour of the jets] . . . became mere details compared with the importance of claimed proximity and friendship with federal public agents,” the public prosecutors’ office said in a statement on the case. 

Mr Lula da Silva’s lawyers immediately rejected the accusations as media grandstanding and said neither the former president nor his son knew anything about the fighter deal. 

They said the payments to the former president’s son from the consultancy were for work that enabled the realisation of American football competitions in Brazil. They did not elaborate. 

Saab said it did not want to comment on the matter given that the public prosecutors had made no accusations against the company or any of its employees. 

The contract was seen as a victory for the Swedish company, which defeated competition from the Rafale of France’s Dassault and the F/A-18 Super Hornet of Boeing of the US to win the Brazilian competition to revamp its fighter fleet. 

The accusations are the latest against the former president, the key figure in the country’s former ruling Workers’ party, amid claims that he also accepted favours from construction companies in exchange for contracts at Petrobras, the state-owned oil company. 

Technical arguments [in favour of the jets] . . . became mere details compared with the importance of claimed proximity and friendship with federal public agents

His lawyers have responded that he is the victim of a scheme to smear his name that his political supporters argue is aimed at preventing him from standing in presidential elections in 2018. 

In Friday’s indictment, prosecutors accused Mr Lula da Silva of influence trafficking, money laundering and organised crime in relation to the Saab deal and the extension of tax benefits for MMC and Caoa, the Brazilian companies that sell Mitsubishi and Hyundai vehicles in the country. 

The prosecutors said that between 2013 and 2015, Mr Lula da Silva “implemented a scheme in which he sold the promise that he could interfere in government decisions to benefit the companies MMC, Caoa Group and Saab”. 

This promise was allegedly made through a lobbyist consultancy Marcondes e Mautoni Empreendimentos e Diplomacia (M&M), run by Mauro Marcondes and Cristina Mautoni, whose clients included Saab and the two automotive companies. The pair were also named in the indictment alongside Mr Lula da Silva and his son. 

A spokesperson for Caoa said the company had no immediate comment as neither it nor its employees were among those accused in the indictment.

MMC declined to comment. Neither the company nor its employees were among those accused.

The prosecutors said the idea of the scheme was that Mr Lula da Silva could use his influence with “a public agent” who had the power to take decisions affecting the interests of the companies — then-president Dilma Rousseff. 

But they said the investigation had uncovered no evidence that Ms Rousseff participated in the alleged scheme or was aware of it. 

The prosecutors said that between 2011 and 2015, Saab paid M&M €1.84m and €744,000. 

“The explication for the . . . payments is, according to investigators, the fact that the lobbyists Mauro and Cristina had convinced the Swedes that they [the lobbyists] were close to the former president and could count on his influence with the government to ensure victory in the contest [for the fighters],” the public prosecutors’ statement said. 

Via FT