Brazilian prosecutors on Thursday opened a probe against former president Luiz Inacio Lula da Silva for alleged influence-peddling relating to foreign construction firm Odebrecht SA.
Prosecutors in the capital Brasilia announced in May that a preliminary investigation had begun into the accusations, alleging that Lula often traveled abroad at Odebrecht's expense, between 2011 and 2014, after leaving office and using his influence to acquire billion-dollar deals for Odebrecht in Panama, Venezuela and some African countries, and pushing Brazil's development bank to finance the deals with subsidized loans, Reuters reported.
The investigation comes at a time when the administration of current President Dilma Rousseff is itself under investigation for campaign finance irregularities relating to state-run oil firm Petrobras.
Lula is one of Brazil's most popular leaders and is seen to have guided Brazil's rise as a major economic power. His foundation released a statement promising to cooperate with prosecutors. "We are calm. The Lula Institute is certain of the transparency and legality of ex-president Lula's activities," spokesman Jose Chrispiniano said, according to Deutsche Welle. Odebrecht has also denied any wrongdoing.
Meanwhile, Brazil's lower house speaker Eduardo Cunha, said on Thursday that he was considering opening impeachment proceedings against Rousseff, Lula's political protege, the Guardian reported.
Petrobras was once seen as Brazil's best hope for becoming an energy superpower after it made a massive oil discovery in 2007 off the coast of Rio de Janeiro. Rousseff has been linked to serious corruption allegations surrounding the oil firm, which also saw the arrest of powerful figures in Brazil's construction industry who were previously thought to be untouchable. The scandal blew open with the arrest of Odebrecht CEO Marcello Odebrecht last month, on charges of leading a price-fixing cartel among a group of engineering firms. Odebrecht has also been accused of bribing Petrobras executives in order to gain inflated contracts.
Some of the money from these bribes is thought to have gone to the ruling Workers' Party of Rousseff and Lula, though neither are directly implicated in the scandal known as "Operation Car Wash," but a convicted black market currency dealer testified that Rousseff knew of the illicit activities. The scandal has led to the arrest of several other top construction and energy officials, and prompted the resignation of Petrobras CEO Maria Maria das Graças Silva Foster in February.
Popular outrage against Rousseff's administration has boiled over into weeks of protest in Sao Paulo, condemnation from opposition figures and plummeting approval ratings for Rousseff, just after her reelection to the presidency last October.