July 21, 2005

Brazil replaces two more ministers amid scandal

BRASILIA, Brazil (Reuters) - Brazilian President Luiz
Inacio Lula da Silva replaced two more ministers on Thursday to
shore up crumbling support in Congress as a bribes-for votes
scandal rocked his party and government.

Lula has now reshuffled 10 ministry posts since early June
when the ruling Workers Party (PT) was accused of bribing
right-wing lawmakers to back government legislation -- sparking
Brazil's worst political crisis in over a decade.

Former PT ministers have reoccupied posts as lawmakers to
defend the government, and Lula has given extra cabinet jobs to
allied parties to salvage his Congressional coalition 16 months
before he faces reelection.

In Tuesday's moves, Cities Minister Olivio Dutra of the PT
was replaced by Marcio Fortes, executive secretary at the trade
ministry. Fortes is close to lower house president Severino
Cavalcanti of the Progressive Party, who had called on Lula to
give his party more government influence or lose its support.

Social Security Minister Romero Juca, of the
government-allied Brazilian Democratic Movement Party (PMDB)
was replaced by Nelson Machado, a PT-allied career civil
servant at the planning ministry.

"It's a reform to improve support for the government, to
defend the government rather than advance its legislative
agenda," said political analyst Carlos Lopes at consultants
Santafe Ideias in Brasilia.

Five PT leaders and Lula's powerful cabinet chief Jose
Dirceu have been forced to step down after being implicated in
the bribes-for-votes scandal. The latest was lower house PT
leader Paulo Rocha on Tuesday.

Congress has launched three probes into alleged PT and
government corruption in the last six weeks, paralyzing Lula's
legislative agenda and worrying investors he may loosen his
grip on unpopular fiscal and monetary controls to win support.

The government in late June promised to significantly
increase the PMDB's cabinet presence to boost support from its
biggest congressional ally.

Lula increased its weighting to just three ministerial
seats from two in the reshuffle after the PMDB failed to unite
behind his administration and remained split between pro- and
anti-government wings, Lopes said.