Brazil's largest scandal rattles palace gates as police raid home of former President Lula

UPDATE: Lula has been released by police after giving three hours of testimony this morning.

Brazil’s largest corruption scandal is again rattling the presidential gates as federal police raided the home of former President Luiz Inacio Lula da Silva this morning to question him about his alleged involvement in a multi-billion dollar corruption scandal involving the state-run oil company Petrobras.

Lula was collared in part of wider sweep that has reportedly netted a dozen officials to declare before a judge about their suspected involvement in the scandal, which allegedly padded the ruling Workers’ Party (PT) coffers with untold millions of dollars in illicit cash. The Prosecutors’ Office says Lula was one of the main beneficiaries of the kickback scheme, which is believed to have involved as many as 350 government officials.

The Workers’ Party reportedly tweeted that Lula was a “political prisoner,” but then quickly deleted the tweet.

Lula’s detention could prove to be seriously destabilizing to current President Dilma Rousseff, Lula’s successor. Rousseff, who served as minister of energy under Lula, is currently huddling with her cabinet this morning, concerned that the prosecutor’s targeting of the former president is really about cornering the current one.

It’s not the first time the Petrobras scandal has threatened Rousseff’s presidency. A year ago, more than 1 million Brazilians took to the streets to demand her ouster over a flagging economy and her alleged involvement in the scandal. But so far, she has never officially been accused of wrongdoing.

News of Lula’s arrest this morning brought protesters into the streets outside the former president’s home and spawned a furious debate on social media.

The bribery scandal, according to testimony from a former oil executive who was arrested last year for his alleged involvement, included taking multi-million dollar kickbacks from big construction and engineering firms in exchange for sweetheart oil concessions, with some of the money going to members of Rousseff’s Workers’ Party (PT). The scandal has apparently been going on for 19 years and became Petrobras’ modus operandi more than a decade ago, according to The AP media reports of previous congressional testimony by former Petrobras executive Pedro Barusco.

This morning’s raid on Lula’s home was phase 24 of the so-called Operation Lava Jato, according to a press release by Brazil’s Federal Police.

“Nearly 200 federal policemen and 30 auditors from the Internal Revenue agency are carrying out 44 court orders, 33 search warrants, and 11 summons. The measures are being carried out in the states of Sao Paulo, Rio de Janeiro and Bahia,” reads the press bulletin.

Prosecutors now appear to be zeroing in Rousseff, whose former campaign chief was arrested in connection to the scandal last month.

Analysts believe the scandal could culminate in one of several scenarios. Journalist Andres Oppenheimer writes Brazil’s Election Tribunal could call for early elections if it determines there was fraud in the financing of Rousseff’s 2014 election campaign. Or Rousseff could be impeached and succeeded by her vice president, who is also under investigation.