During a defiant press conference shortly after being freed, Lula, 70, said the decision to take him forcibly into custody for questioning about links to a corruption network at state oil company Petrobras amounted to “judicial authoritarianism.”
“If they wanted to hear from me, they only had to call and I would have gone, because I owe nothing to anyone and fear nothing,” he said. “They preferred to show power, arrogance, to make a show.”
He got backing from President Dilma Rousseff, a close ally in the ruling Workers’ Party, who said she was “in complete disagreement” with the decision to detain Lula.
As well as taking Lula to a police station, agents raided his house in Sao Paulo, the offices of the Lula Institute, and houses of family members and associates.
Prosecutors said Lula was targeted as part of the Operation Car Wash investigation into a sprawling embezzlement and bribery conspiracy centred on Petrobras. The corruption scandal, which has already seen a Who’s Who of Brazilian politicians and businessmen face charges, is believed to be the biggest ever in Brazil.
Lula was not arrested, but held for questioning over alleged “favours” received from corrupt construction companies implicated in the Petrobras kickbacks scheme, prosecutors said.
The drama sent shockwaves through Brazil’s already turbulent political landscape.
As officials, backed by camouflaged officers with automatic weapons, went through Lula’s house, supporters and opponents demonstrated in the street, shouting and scuffling.
Later, as Lula gave his press conference, supporters gathered outside with placards including one that read: “No to the coup.”
Lula, who was president from 2003-2010, remains one of Brazil’s most influential figures and his fate is closely linked to that of his successor Rousseff, and the future of the Workers’ Party.
Rousseff, deeply unpopular over her handling of a brutal recession, is already fighting for her political life against the threat of impeachment and a court case that could potentially see her 2014 reelection declared illegitimate.
The open confrontation between Lula and Operation Car Wash prosecutors appeared likely to put her in further danger and fuel instability.
Lula has been rallying the Workers’ Party faithful to his defense, but nationwide opposition demonstrations on March 13 are expected to draw large crowds.
The Sao Paulo stock market shot up after Lula’s detention, reflecting business leaders’ opinion that Rousseff’s downfall could lead Brazil out of the political paralysis that has made economic reforms impossible to enact. The risk consultancy Eurasia Group said that “today’s detention of ex-President Lula suggests that Rousseff is now unlikely to finish her term in office.”
The allegations against Lula focus on a luxury seaside apartment and country house that authorities say appear to have been given to the ex-president as bribes.
“There is evidence that former President Lula received assets arising from the Petrobras scheme through the allocation and renovation of a triplex apartment and a site in Atibaia,” prosecutors said in a statement.
Lula denies ownership of the apartment and any involvement in the scheme.
Lula was also accused of receiving about 30mn reais (approximately $8mn) in donations and speaking fees from Petrobras-tainted companies.
“The favours to Lula from big construction companies involved in the fraud at Petrobras were many and hard to quantify,” prosecutor Carlos Fernando dos Santos Lima told reporters.
Prosecutors say they are also examining Lula’s allegedly wider role in a Petrobras-related web of corruption that enveloped the Workers’ Party, the Lula Institute and election campaign finances.
Acknowledging the extraordinary nature of a once hugely popular president being detained, prosecutors said in their statement: “It is not a value judgment about who he is... but an investigative judgment based on facts and certain acts which are under suspicion.”
“In a republic, even famous and powerful people must come under judicial scrutiny when there is a well-founded suspicion of criminal activity.”
Lula’s detention came a day after a bombshell claim by a Brazilian magazine that a former close ally of Lula and Rousseff — a senior Workers’ Party senator who has already been charged with Petrobras corruption crimes — was preparing to testify against them.
Senator Delcidio do Amaral, who was arrested last November, was reportedly negotiating a plea bargain deal with prosecutors in which he would testify that Rousseff obstructed the probe and that Lula had also been involved in the scheme.
The report, although unconfirmed, sparked a furious reaction from Rousseff’s government.
No allegations have been made officially against Rousseff in the Petrobras scandal.