In Shocking Reversal, Brazil Supreme Court Annuls Lula Carwash Conviction, Setting Stage For His Return As President

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by Tyler Durden
Monday, Mar 08, 2021 - 05:05 PM

In a stunning announcement that shocked even veteran banana republic experts, on Monday Brazil's Supreme Court annulled the conviction of former President Lula (full name Luiz Inacio Lula da Silva) over his involvement in Brazil's legendary Carwash corruption probe, clearing the way for the leftist leader to run for the nation’s top job for the third time if and when he so chooses.

Former president Lula was convicted of corruption in 2017, and left jail in late 2019 after a Supreme Court decision he couldn’t serve time as all appeals hadn’t been exhausted. He has repeatedly denied wrongdoing and has said he’s victim of political persecution.

Then on Monday, the federal court in the southern city of Curitiba had no jurisdiction over cases against the former president, Supreme Court Justice Edson Fachin wrote in a statement on Monday, annulling convictions for crimes such as bribery stemming from property upgrades in Atibaia and a beach-front triplex in the state of Sao Paulo.

The cases against Lula shouldn’t have been carried out in Curitiba because the facts that were raised don’t have direct ties to the misappropriation scheme at Petrobras, according to Monday’s statement. Those probes against Lula must be tried in court in the capital city of Brasilia.

The decision grants the former labor union leader and disgraced former two-term president his biggest chance yet at a long-sought comeback. Then again, while Lula remains a shining symbol of glorious socialism and is revered by many on the left for lifting millions out of poverty (while putting other millions right bacn in it), many on the right say he is a symbol of corruption and economic mismanagement under the leftist Workers’ Party.

In response to the news, Brazilian markets plunged to the lowest levels of the day: the real fell as much as 1.7%, hitting 5.80 vs the dollar - the lowest since May - while stocks declined as much as 3.8%. The reason as Bloomberg explains, is that Brazil investors - already suffering a year of market whiplash - are bracing for even more political uncertainty as Lula's upcoming candidacy throws another wrench in local markets already rocked by Covid and fiscal deterioration. Analysts also anticipate more political friction and a highly polarized presidential election next year after a Supreme Court judge annulled the convictions against Lula in the so-called Carwash corruption probe, which would clear the path for the former leader to run for president next year if he so chooses.

Lula was jailed in 2018 for corruption and money laundering but walked out of prison the following year after a decision he couldn’t serve time until all appeals were exhausted.

The selling was sparked by a poll released this weekend which showed Lula has more potential in 2022 elections than President Jair Bolsonaro. The survey carried out by Ipec, a new polling institute led by the former head of Ibope, showed 50% of respondents said they may vote for Lula in the 2022 elections if he were to run, versus 38% for Bolsonaro. Lula also showed a lower rejection rate when compared to Bolsonaro -- 44% to 56%, respectively. The poll surveyed 2,002 people between February 19 and 23, and has a two percentage point margin of error, according to newspaper O Estado de S.Paulo.