Brazilian prosecutors announce corruption probe into ex-president Lula

Brazil's corruption-fueled political crisis ramped up Thursday when prosecutors announced a probe into possible influence peddling by former President Luiz Inacio Lula da Silva, the same day that a South American trading bloc summit began in Brazil, hosting visiting foreign ministers from several South American countries.

The investigation will center on Lula's alleged use of his clout after leaving office to help scandal-ridden construction giant Odebrecht land billion-dollar contracts in Latin America and Africa.

The targeting of the once highly popular Lula opened a new front in the ever-widening political turmoil in Latin America's biggest country, coming as his successor Dilma Rousseff faced new impeachment threats — and one of her main foes was himself accused of demanding a $5 million bribe.

Prosecutors had announced in May that they were considering the probe into Lula, but it was only launched July 8 and made public Thursday.

"There is an investigation into possible influence peddling by ex-president Lula with the leaders of other countries on behalf of the construction company Odebrecht," a spokesman for the federal prosecutor's office in the capital Brasilia confirmed.

Lula's foundation immediately issued a statement saying he had nothing to fear.

"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 the prosecutor's office, Lula's alleged influence peddling took place between 2011 and 2014. That is after Lula left office and was replaced by his hand-picked Workers' Party successor, Rousseff.

But as an ex-president, Lula retained his status as a major world figure and the face of commodity-rich Brazil's rise to economic power.

A report in Epoca magazine in May said that Odebrecht, Brazil's biggest construction company, had paid Lula to use his influence on its behalf in Cuba, the Dominican Republic, Ghana and Venezuela.

He is also alleged to have helped persuade the Brazilian state-owned development bank BNDES to finance the foreign projects.

Odebrecht, which does everything from building airports to deep water oil drilling and mining, has said there was nothing untoward in the powerful ex-president's involvement as a booster for Brazilian business.

Brazil's political and elite business circles have already been thrown into commotion by Operation Car Wash, a huge investigation into a bribes-and-kickbacks network that saw companies including Odebrecht bribe politically connected executives at state oil giant Petrobras to grant inflated contracts.

Rousseff, chairwoman of Petrobras for seven years, has not been directly implicated in the scandal but there are mounting calls for her resignation or impeachment.

Al Jazeera with Agence France-Presse