In the most dramatic development yet in the corruption scandal engulfing Brazil, former president Luiz Inacio Lula da Silva (known as "Lula") was detained by police on Friday (4 March) for questioning over a money laundering operation involving construction companies and Brazil’s state owned oil company, Petrobras.
Prosecutors said there is evidence showing Lula benefitted personally from the kick-back scheme through work on a luxury beachside penthouse and other property, Reuters reports.
Lula, 70, who was president of Brazil between 2003 and 2010, angrily denied any wrongdoing. He was released after three hours.
Prosecutors allege that Lula received at least $270,000 worth of renovation work and furniture and acquired two country estates in Atibaia
Dozens of lawmakers and executives of Brazils top construction firms have been arrested in the unprecedented probe, called Operation Lava Jato (Car Wash), that was launched by Judge Sergio Moro in March 2014.
Investigators allege that construction companies formed a cartel in 2003 to overcharge Petrobras for building contracts, and then paid some of the illicit cash to Petrobras executives and politicians who were in on the deal.
Prosecutors allege that the Workers’ Party, currently in power in Brazil under President Dilma Rousseff, financed its campaigns and expenses through these kickbacks.
Brazilian media report that a senator from the ruling party, Delcidio Amaral, who was arrested in November, has allegedly tied Lula to the Petrobras scandal in a 400-page plea bargain made with prosecutors. The senator also implicated current president, Dilma Rousseff, in the scandal. She has repeatedly denied wrongdoing.
Prosecutors allege that Lula received at least $270,000 worth of renovation work and furniture for a beachfront penthouse apartment in Guajua. Lula has denied owning the apartment. Investigators also say Lula acquired two country estates in Atibaia from businessman José Carlos Bumlai and builders Odebrecht and OAS.
Photograph: Luiz Inácio Lula da Silva, when president in 2007, with then First Lady, Marisa LetÃcia (Ricardo Stuckert /Wikimedia Commons)