A case has been opened in Brazil against former president Luiz Inacio Lula da Silva (photo), for alleged misuse of public funds, said federal prosecutors, who accuse the ex-president of sending out 10 million letters to older Brazilians promoting low-interest loans in 2004.
According to prosecutors the letters were not in the public interest, but benefited a bank which was linked to another corruption scandal.
Also under investigation is former Social Security minister Amir Lando, one of Mr Lula’s cabinet members.
Allegations say that in 2004, M Lula and Lando sent letters to retirees informing pensioners of a new credit scheme that would allow them to take out loans at a reduced rate of interest. But at the time those letters were sent the private financial institution BMG was the only bank in the country which offered those loans.
The letters were sent to 10.6 million retirees which cost around $3.5m.
Prosecutors argue that the letters served no social, informative or educational aim.
“In light of our investigations, we can easily conclude that the aim of the letters was one of self-promotion, praising the effects [of the low-interest loan scheme] and therefore advertising it, and at the same time benefiting the BMG bank,” the prosecutors added.
M Lula and Lando were both asked by the authorities to repay the money spent on the mailing and postage of the letters.
And while Brazilian ex-president has not yet commented on the allegations, Mr Lando told reporters that the letters only served to inform the recipients of the new loan scheme, adding that it did not list or promote any specific banks.