Scandals dominate Brazil campaign as vote nears

RIO DE JANEIRO (Reuters) – The tone of Brazil’s presidential race has lurched lower and is likely to stay there as scandal accusations and increasingly bitter exchanges between the two main candidates drown out policy debate.

Trailing badly in the polls, opposition contender Jose Serra has honed in on ethics charges against front-runner Dilma Rousseff and her political party as his best bet of avoiding a humiliating knockout in the first round of voting on October 3.

Those allegations are dominating media coverage and took up most of a televised debate on Sunday night as Rousseff denied wrongdoing and accused Serra, who appears to be on the last legs of a long political career, of desperate tactics.

“He wants to win this campaign dirtily because he is unable to convince the Brazilian people,” a confident Rousseff said in the debate.

Apparently coasting to victory on the coattails of massively popular President Luiz Inacio Lula da Silva, Rousseff is unlikely to be derailed by the scandals unless a “smoking gun” emerges linking her directly to any wrongdoing.

Former Sao Paulo state governor Serra accuses Rousseff and her leftist Workers’ Party of having illegally accessed tax records of his daughter and opposition members in search of potentially damaging information.

A new scandal erupted last weekend when news magazine Veja published accusations a former Rousseff aide who is now Lula’s chief of staff, Erenice Guerra, was involved in a kickback scheme for public works contracts run by her son’s consulting firm.

The so-called tax scandal has been rumbling on for weeks as evidence of new violations emerge in the media but has yet to resonate with voters.

A new poll released on Tuesday showed Rousseff widening her lead, putting her on course to win with a crushing 58 percent of votes in the first round on October 3.

MEDIA DELUGE

“We’re going to get a deluge of media coverage on this … it does increase the odds that it goes to a second round but I still think she’ll get a first-round victory,” said Christopher Garman, a political analyst at Eurasia Group in Washington.

A key reason why the mudslinging over tax records is not having an impact on polls may be that only about 15 percent of Brazilians pay income tax and therefore have little understanding of the scandal, he said.

Residents in the interior of northeastern Pernambuco state were mostly clueless about the issue when questioned by a reporter from O Globo newspaper, as quoted in a story on Sunday.

“I don’t know what a tax privacy code is, but I’m following it on TV,” said Edmilson Felix da Silva, a 50-year-old plowman. “For me, this is just being done to hurt Dilma.”

Still, the government moved to address the issue on Tuesday, saying it was tightening controls over tax office employees’ access to private financial data.

Every access to personal tax data would have to be justified and people would have the option in their tax statements of protecting their information, Finance Minister Guido Mantega told a news conference in Brasilia.

Mudslinging is likely to dominate the rest of the campaign as the media digs up new details on the allegations and Serra struggles to make headway with policy arguments in the face of Lula’s popularity and a briskly growing economy.

Last week Serra made a new pledge to raise the national minimum wage to 600 reais (225 pounds) a month, compared to the 538 reais planned by the current government, in what some analysts saw as a sign of desperation. Even a slight increase in the minimum wage could strain Brazil’s public finances, as pension payments are readjusted every time there is an increase.

Serra’s hope is that the whiff of scandal will give him enough of a bounce in the polls to take the election to a runoff on October 31. A similar scandal involving Workers’ Party officials trying to buy information about the opposition was seen as one factor preventing Lula from winning in the first round in the 2006 election.

“This is a subject that is important for democracy, because if they do this in the campaign, imagine them tomorrow,” Serra said during the debate.

By Stuart Grudgings

(Editing by Todd Benson and Jerry Norton)

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