Brazil police tapped Rousseff discussing Lula cabinet post

[BRASILIA] The federal judge leading Brazil's largest corruption probe released phone recordings of President Dilma Rousseff and her predecessor Luiz Inacio Lula da Silva discussing his cabinet appointment.

Judge Sergio Moro published transcripts of conversations that federal police obtained by tapping Lula's phone as part of a corruption investigation, known as Carwash. In one of the transcripts, published Wednesday evening, Ms Rousseff makes reference to Lula's appointment as her chief of staff, saying that she was sending the document confirming his nomination and that he should use it only when needed.

The conversation increased speculation that Ms Rousseff offered Lula the job to shield him from the corruption probe. Prosecutors sought a warrant for Lula's arrest after charging him with money laundering and making false declarations. A state judge who was considering the request deferred the decision to Mr Moro. But now that Lula is a cabinet member, under Brazilian law only the Supreme Court can probe, indict or imprison the former president.

The presidential press office didn't immediately respond to requests for comment. Lula's lawyer Cristiano Zanin said on GloboNews that Mr Moro published the transcript to cause social upheaval, without commenting on the content of the discussion.

The disclosure of the conversations is fueling outrage among opposition lawmakers and critics of the government. Hundreds of protesters assembled outside the presidential palace Wednesday evening in Brasilia to demand Ms Rousseff's ouster.

Leaders in the lower house of Congress are meeting to discuss the next steps on impeachment. The Supreme Court earlier on Wednesday ruled on procedural issues that had been holding up the process since December.

Meanwhile the PRB party on Wednesday said it would abandon the ruling coalition in the latest sign that Ms Rousseff's allies are jumping ship. The PSB party joined the opposition early this month while Ms Rousseff's largest coalition partner in Congress, the PMDB, is set to decide within a month whether to stay in the ruling alliance.

Publication of the transcript "makes things worse", said Thiago de Aragao, partner and director of strategy at political- risk consulting company Arko Advice.

"The situation is obviously moving to a point of escalation."

BLOOMBERG