Leaked chats appear to show judge advised prosecutors in Lula case

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BRASILIA (Reuters) - Leaked personal messages published on Saturday by a news website show the judge who led the corruption trial that jailed former Brazil president Luiz Inacio Lula da Silva advised prosecutors to influence public opinion against the leftist leader.

FILE PHOTO: Brazil's Justice Minister Sergio Moro speaks during a session of the Public Security commission at the National Congress in Brasilia, Brazil May 8, 2019. REUTERS/Adriano Machado/File Photo

The Intercept posted what it said were social media chats from then judge Sergio Moro to the prosecution team, suggesting prosecutors make a public statement playing up what Moro said were contradictions in Lula’s testimony to undermine his claim to be a victim of political persecution.

The exchange occurred after Lula’s May 10, 2017 deposition against charges that he took a beachside luxury apartment as a bribe. Lula left the court room to tell supporters that he was being “massacred” and was preparing to run for president again.

Moro, who is now Brazil’s justice minister, questioned the authenticity of the messages and said he would not comment on texts obtained by hackers.

“The supposed material, obtained in a criminal way, must be presented to an independent authority so that its integrity can be certified,” he said in a statement.

The texts copied off the Telegram messaging app appear to show Moro suggesting to prosecutors that they mount a public campaign against the man he was judging, and The Intercept said they raised doubts about Moro’s impartiality in the trial that led to a 12-year prison sentence for Lula.

“Maybe tomorrow you should write a statement clarifying the contradictions between (Lula’s) deposition and the rest of the proof and his previous statement,” the judge wrote to prosecutor Carlos dos Santos Lima on the corruption investigation.

Lula’s lawyers have long argued that Moro was a politically motivated judge who wanted to jail their client to block him from running for the presidency last year, when opinion polls showed him easily leading the race, even after he had been jailed.

In an interview published on Friday, Moro told the Estado de S.Paulo newspaper that he was not worried that the corruption conviction against Lula would be overturned, which legal experts including the Brazilian Bar Association and some Supreme Court Justices have said could happen.

The Intercept has published stories based on what it said was an “enormous trove” of messages received from an anonymous source containing exchanges between prosecutors, Moro and others involved in the investigation and prosecution of the “Car Wash” corruption probe.

Considered the world’s largest graft investigation, it has uncovered billions of dollars of bribes paid in schemes mostly involving sweetheart contracts at state-run firms. It has brought down hundreds of members of the business and political elite in Brazil and across Latin America.

Moro told the newspaper he did not think there was anything illegal in his chats with prosecutors and insisted that Lula’s case “was decided with absolute impartiality based on proof without any type of influence.”

Moro was picked for justice minister by right-wing President Jair Bolsonaro, who won the presidency after Lula was barred from running because of his conviction.

Reporting by Anthony Boadle; Editing by Daniel Wallis

Our Standards:The Thomson Reuters Trust Principles.

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Brazil markets spooked by minister's complaints on pension reform

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RIO DE JANEIRO (Reuters) - Brazil’s economy minister and lower house speaker exchanged harsh words on Friday over progress on pension reform, creating another drag on Brazilian financial assets already feeling the heat from global market weakness.

Brazil's Economy Minister Paulo Guedes attends a news conference in Brasilia, Brazil June 12, 2019. REUTERS/Adriano Machado

Economy Minister Paulo Guedes kicked off the spat, spurning a congressional committee report for what he called excessive changes to the government’s pension reform bill such as scrapping a plan to launch private savings accounts.

Rodrigo Maia, speaker of the lower house of Congress, hit back at the criticism, saying the collective will had prevailed as it should in a democracy. “We’re not going to pay attention to Minister Paulo Guedes and his recent aggressions against the parliament,” Maia said in a TV interview.

The complaints from Guedes, coming a day after President Jair Bolsonaro’s chief of staff had touted the congressional pension reform report as a “huge victory,” raised concerns about more tension between the government and Congress.

After clashes with lawmakers in recent months, Guedes had struck a more conciliatory tone, contributing to investors’ hopes for a swift approval of the landmark reform to boost public finances. But his disdain on Friday was striking.

Speaking in Rio de Janeiro, Guedes said only a bill generating around 1 trillion reais ($256 billion) of savings over the next decade would represent real reform of the country’s bloated social security system, but around 860 billion meant the issue would need revisiting in five or six years time.

On Thursday, the special committee on pension reform’s long-awaited report recommended changes to the original draft, reducing the government’s planned 1.237 trillion reais of savings to 913 billion reais.

Analysts expect that to be watered down further, but the consensus still appears to be that anything above 800 billion reais would be regarded as a major stepping stone toward putting the country on a more stable financial footing.

Brazilian markets rallied on Thursday, but the political noise soured the taste on Friday, and Guedes came under fire.

“He said what everyone thought, but he shouldn’t have said it,” said a fund manager in Sao Paulo who was not authorized to speak with the press.

The real fell around 1.2% to 3.90 per dollar, its worst day since the end of April, and the benchmark Bovespa stock market fell 0.74%.

Guedes criticized the committee’s report for excluding a transition to private savings accounts, reforms of state and municipal government pensions and changes to how older, disabled and rural workers are treated.

Maia said the special committee will vote on the bill around June 25-26, then present it to the plenary for final lower house approval before a congressional recess in late July.

Reporting by Rodrigo Viga Gaier and Maria Carolina Marcello; Writing by Jamie McGeever; Editing by Chizu Nomiyama and Will Dunham

Our Standards:The Thomson Reuters Trust Principles.

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Brazil's Minerva suspends furlough at beef plant as China ban ends

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SAO PAULO (Reuters) - Brazilian meat processor Minerva SA said on Thursday it has suspended a furlough announced last week for its Barretos beef processing facility, following news that a ban to exports to China has ended.

Brazil’s government said on Thursday it has lifted a suspension of beef exports to China after dealing with an atypical case of mad cow disease.

Reporting by Gabriela Mello and Marcelo Teixeira; Editing by Phil Berlowitz

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Brazil lifts suspension of beef exports to China

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SAO PAULO (Reuters) - Brazil’s government said on Thursday it has lifted a suspension of beef exports to China after dealing with an atypical case of mad cow disease, sending shares of Marfrig Global Foods, Minerva SA and other Brazilian meatpackers soaring.

The suspension had been in effect since June 3 after a case was reported in a 17-year-old cow in the state of Mato Grosso. Cases can arise spontaneously in cattle herds, usually in animals 8 years old or older.

Tereza Cristina Dias, the agriculture minister, said on her Twitter account that Brazil would resume issuance of international health certificates to allow for beef exports to China.

Marfrig, whose shares jumped 5% after the announcement of the end of the suspension, said in a securities filing that the government’s issuance of these certificates had been normalized on Thursday.

Shares of rival Minerva also rose 3% in São Paulo.

China is the only country among Brazilian importers that enforces a health protocol requiring suspension of beef imports when an atypical case of mad cow disease is reported, Brazil’s agriculture ministry said in a statement.

The ministry reiterated the Brazilian government’s intention to negotiate a new health protocol with Chinese authorities to address the issue.

Reporting by Ana Mano; Editing by Dan Grebler and Paul Simao

Our Standards:The Thomson Reuters Trust Principles.

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