BRASILIA • It was not an easy first day on the job for Brazilian President Dilma Rousseff's Chief of Staff Luiz Inacio Lula da Silva. Within an hour of his taking office, a federal judge issued an injunction suspending his appointment.
Police used tear gas to disperse hundreds of opposition demonstrators who clashed with the former president's leftist supporters outside the presidential palace where he was sworn in on Thursday, while ministers and corruption investigators traded barbs throughout the day. Government supporters defied critics of the administration by chanting: "There will be no coup."
Spontaneous protests blocked major avenues in Sao Paulo and Rio de Janeiro the same day, spurred by anger that Mr Lula's appointment will shield him from prosecutors who have charged him with money laundering and fraud as part of a sweeping graft probe centred on state-run oil company Petrobras.
As Congress revived proceedings to impeach Mrs Rousseff, the rallies and legal wrangling underscore the volatile political situation in Brazil, where the President is finding it almost impossible to govern as she fights to remain in office.
"The political crisis spilled from the presidential palace to Congress, to the streets and now to the courts," said analyst Gabriel Petrus at business consulting firm Barral M Jorge. "She made a risky bet by tapping Lula. It doesn't look like it's paying off."
Mrs Rousseff said that coup supporters "won't bring me to my knees", yet Judge Itagiba Catta Preta Neto delivered a blow, arguing in a document justifying the injunction that Mr Lula's nomination could lead to his interference in police and judicial activities.
Attorney-General Jose Eduardo Cardozo said the government is appealing the decision and that the Cabinet appointment was legal. Mr Lula remains a minister, though he cannot perform all functions until legal questions are resolved.
Vice-President Michel Temer skipped the swearing-in ceremony, raising speculation that his PMDB party, the largest in Congress, would leave the ruling coalition ahead of an impeachment vote.
Lawmakers revived the stalled impeachment process by forming a committee that will recommend whether the Lower House should vote to remove Mrs Rousseff from office. The committee elected its leader, Congressman Rogerio Rosso, and will start meeting next week. Lower House Speaker Eduardo Cunha expects a vote within 45 days. If approved, the process would advance to the Senate for consideration.
As Mrs Rousseff swore Mr Lula into office, she strongly criticised the release on Wednesday of a taped phone conversation between them that was made public by Mr Sergio Moro, the crusading federal judge overseeing the Petrobras investigation.
Mr Moro said the tape showed they had discussed influencing prosecutors and courts to protect Mr Lula, who leaves Mr Moro's jurisdiction by joining the government.
Brazil's biggest corruption probe, which centres on bribes and political kickbacks at Petrobras, has so far convicted dozens of powerful executives and politicians while recovering 2.9 billion reais (S$1 billion) in stolen money.
Prosecutors accuse Mr Lula of concealing ownership of an oceanfront apartment that was built and furnished by one of the Petrobras contractors in the graft scheme.
Political consulting firm Eurasia Group, meanwhile, increased the odds that Mrs Rousseff will not finish out her term to 75 per cent.
BLOOMBERG, REUTERS
