It's Getting Ugly

The scandal involving allegations among members of the Workers' Party (PT) in Brazil seems to be growing. 

• The Secretary General of the PT, Silvio Pereira, has resigned.
• Veja is reporting that PT President, José Genoino signed a contract for a loan to pay the PT's debts in 2003 without reading it and Marcos  Valério, who has been alleged to be involved in the bribes for votes allegations guaranteed the debt for the the lender. Delúbio Soares, the PT treasurer worked out the details of the agreement. It appears that they are on their way out.
• PT Senator Cristovam Buarque is suggesting that Lula pick business figures and people from outside politics to make up his cabinet and that Lula give up on running for reëlection next year so that he can get his programs implemented.
• The real, after being the strongest currency against the dollar in the past year has declined against it for the past two days. While this may not be too bad in and of itself (Lula has wanted a slightly weaker real to boost the already strong trade surplus), it can be interpreted as a sign of lack of faith by investors.

Where this leads still remains to be seen, but it certainly seems to me that none of this is good for Lula. While it would be catastrophic for it to be disclosed that he was aware of any corrupt activity, it may be just as bad for him if it turns out he knew nothing as that would hardly inspire confidence in his leadership. Stay tuned.