Sept. 1 (Bloomberg) -- Brazil’s politicians, a rough and tumble group under normal conditions, are wrestling in the mud as they position themselves for next year’s presidential election.

For the past five months, the country’s media have chronicled one political scandal after another. Although none of them directly involve Brazil’s popular President Luiz Inacio Lula da Silva, he’s feeling the heat as voters’ distrust of politics grows and key allies are under investigation.

Lula has survived plenty of corruption scandals in his administration since becoming president in 2003. His situation might be different this time, and the stakes are high. With the election only 14 months away, Lula will need all his survival skills to preserve his legacy, pursue his legislative agenda and help his chief of staff and hand-picked successor, Dilma Rousseff, become Brazil’s next president.

Most of the corruption charges involve officials in the Brazilian Democratic Movement Party, the country’s biggest political organization, known as PMDB.

Lula, head of the PT Workers’ Party, believes PMDB’s support will help him to achieve his goals. An alliance between the two factions should increase Rousseff’s chances of victory. In fact, it might turn out to be her undoing.

Rousseff, who has early stage lymphoma, intends to pick a running mate from PMDB to help secure the group’s support. By courting PMDB, though, Lula and Rousseff are cutting deals with some of the country’s sleaziest politicians. Fingerprints of PMDB politicians are all over most of the 87 corruption scandals that have rocked the country this year.

Corruption Rules

Lula’s gamble is that Brazilian voters will support a ticket that gives control of Latin America’s largest economy to a party largely seen as unprincipled and self-serving.

“Corruption is what a large part of PMDB really wants,” Jarbas Vasconcelos, a former governor and a PMDB senator told Veja magazine earlier this year.

During his first term, Lula refused to forge an alliance and share cabinet positions with PMDB, fearing he might lose control of his administration. To compensate for PMDB’s absence, Lula worked hard to hold onto the other members of his coalition. This led to accusations that Lula’s then-chief of staff paid legislators for their votes in Congress.

The accusations almost cost Lula his re-election in 2006 and forced him to replace his chief aide with Rousseff. Having learned the hard way that he needed PMDB’s support, Lula corrected his mistake during his second term.

Doling Favors

Starting in 2007, Lula appointed dozens of PMDB politicians to key federal positions, including six ministries with a combined budget of 240 billion reais ($130 billion). One of them, Mining and Energy, controls oil giant Petroleo Brasileiro SA and Centrais Eletricas Brasileiras SA, Latin America’s largest utility.

Party leaders wanted more, and Lula caved. He handed them the Ministry of Congressional affairs and key leadership roles in the Senate.

Lula really went overboard in February, when he helped PMDB member and former Brazilian president José Sarney become the chairman of the Senate, one of the most powerful posts in the government.

Sarney isn’t exactly Mr. Clean. A career politician who led Brazil from 1985 to 1990, he has spent the past five months fighting charges of official misconduct and nepotism.

Caught on Tape

Lula’s support for Sarney broke precedent by giving control of both houses of Congress to the same party. This left the impression Lula needed PMDB to block potentially embarrassing Congressional investigations, such as an ongoing probe of misappropriated funds at Petrobras.

Eager to guarantee PMDB’s support for Rousseff in 2010, and tone deaf to public sentiment, Lula said Sarney “shouldn’t be treated as an ordinary citizen.” This comes even with the existence of tape recordings showing Sarney had a hand in appointing his granddaughter’s boyfriend to a Senate position.

Recently, Lula’s followers cast decisive votes to bury all of the Senate’s investigations against Sarney. In exchange, PMDB’s support for Rousseff seems assured.

Lula’s defense of Sarney prompted Senator Flavio Arns -- from the president’s own party -- to resign. Arns said he is “ashamed” to stay in a party that “threw ethics in the garbage.”

In another blow to Lula, former Environment Minister Marina Silva earlier this month bolted from the president’s Workers’ Party, which she helped create 30 years ago. She probably will run for president as the Green Party’s candidate, a move that may prompt others to enter the race. A larger field can only hurt Rousseff’s chances.

Records Erased

Meanwhile, Rousseff has her own problems. She’s accused of meeting with the federal revenue secretary at the president’s palace and pressuring her to end probes of Sarney’s family. Rousseff denies the encounter took place. The secretary gave a detailed account of their talk to a Congressional panel. Soon afterward, the official’s driver switched jobs and dropped from sight and the president’s security office said it has erased all records of Rousseff’s visitors.

If Rousseff does get elected and her health worsens, it would force a PMDB politician to take over. If that happens, Brazil’s garbage cans will overflow.

(Alexandre Marinis, political economist and founding partner of Mosaico Economia Politica, is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: Alexandre Marinis in Sao Paulo at amarinis1@bloomberg.net

Last Updated: August 31, 2009 21:00 EDT