Brazil questions former president Lula’s relationship with builder

BRASILIA (Reuters) – Federal prosecutors in Brazil have opened a preliminary investigation into whether former president Luiz Inácio Lula da Silva improperly used his connections to benefit construction conglomerate Odebrecht SA overseas.

Weekly magazine poca first reported on Friday that Lula, the popular former leader often credited with lifting millions of Brazilians out of poverty, had frequently travelled abroad at Odebrecht’s expense since he left office in 2011.

The magazine said it had obtained documents showing Brazil’s state-run development bank BNDES had financed at least $1.6 billion for Odebrecht projects in the Dominican Republic and Ghana after Lula met with leaders of those countries.

A spokeswoman for the federal prosecutors’ office confirmed a preliminary inquiry had been opened and said prosecutors had 90 days to decide if the ex-president may have committed a crime and warranted a formal investigation.

Odebrecht denied wrongdoing, saying in a statement that its institutional relationship with Lula was normal and that BNDES accounted for only 7 per cent of its financing.

Lula’s institute, the Instituto Lula, said on its website that the poca report was wrong.

The former president sought to strengthen two of his passions, development in Africa and Latin American integration, through his travels, it said.

The news comes at a time of low tolerance for corruption in Latin America’s largest economy.

Revelations of a decade-old multi-billion-dollar kickback scandal at state-run oil firm Petroleo Brasileiro SA have hit the popularity of Lula’s successor, President Dilma Rousseff, with some even calling for her impeachment.

Neither Rousseff nor Lula, her political mentor, have been implicated in that scandal but the treasurer of their Workers’ Party has been jailed on corruption charges.

Lula has not ruled out another run for the presidency when Rousseff’s second term ends in 2018.