BRASILIA (Reuters) - Former Brazilian leader Luiz Inacio Lula da Silva, a top contender to win next year’s presidential election, was convicted on corruption charges on Wednesday and sentenced to nearly 10 years in prison.

The ruling marked a stunning fall for Lula, one of the country’s most popular politicians, and a serious blow to his chances of a political comeback. The former union leader, who won global praise for policies to reduce stinging inequality in Brazil, faces four more corruption trials and will remain free on appeal.

The verdict represented the highest-profile conviction yet in a sweeping corruption investigation that for over three years has rattled Brazil, revealing a sprawling system of graft at top levels of business and government.

Judge Sergio Moro found Lula, 71, guilty of accepting 3.7 million reais ($1.2 million) worth of bribes from engineering firm OAS SA, the amount of money prosecutors said the company spent refurbishing a beach apartment for Lula in return for his help winning contracts with state oil company Petroleo Brasileiro (PETR4.SA).

Federal prosecutors have accused Lula, Brazil’s first working-class president from 2003 to 2011, of masterminding a long-running corruption scheme that was uncovered in a probe into kickbacks around Petrobras.

Lula’s legal team said in an emailed statement that he was innocent and they would appeal.

“For over three years, Lula has been subject to a politically motivated investigation,” they wrote. “No credible evidence of guilt has been produced, and overwhelming proof of his innocence blatantly ignored.”

Lula’s lawyer Cristiano Martins has repeatedly accused judge Moro of being biased against his client, which Moro strongly denies.

Moro wrote in his ruling that he “took no personal satisfaction in this conviction, quite to the contrary.”

“It’s lamentable that a president of the republic is criminally convicted,” Moro said. “No matter how important you are, no one is above the law.”

The Brazilian real BRBY extended gains following the decision and reached its strongest in two months. The benchmark Bovespa stock index .BVSP rose to a session high. Investors fear that another Lula presidency would mean a return to more state-directed and less business friendly economic policies.

“POWER VACUUM ON LEFT”

Lula would be barred from office if his guilty verdict is upheld by an appeals court, which is expected to take at least eight months to rule.

If he cannot run, political analysts say Brazil’s left would be thrown into disarray, forced to rebuild and somehow find a leader who can emerge from the immense shadow that Lula has cast on Brazilian politics for three decades.

Former Brazilian President Luiz Inacio Lula da Silva is seen during the inauguration of the new National Directory of the Workers' Party, in Brasilia, Brazil July 5, 2017. REUTERS/Ueslei Marcelino

“Lula’s absence opens a gaping hole in the political scene, it creates an enormous power vacuum on the left,” said Claudio Couto, a political scientist at the Getulio Vargas Foundation, a top university. “We have now entered a situation of extreme political tension, even beyond the chaos we have been living for the last year.”

Couto said he expected Lula’s guilty verdict to be upheld by the appeals court. That would leave the 2018 presidential race wide open and raise chances of a victory by a political outsider, given most known contenders are also ensnared in Brazil’s corruption investigations.

BOOM TO BUST

Lula’s two-terms were marked by a commodity boom that momentarily made Brazil one of the world’s fastest-growing economies. His ambitious foreign policies, aligning Brazil with other big developing nations, raised the country’s profile on the global stage.

With Lula’s swagger setting the tone, Brazil sought to shrug off northern economic and political hegemony and engage in global problems, like Middle East peace and the standoff over Iran’s nuclear program.

Former U.S. President Barack Obama once labeled him the most popular politician on earth.

But upon leaving office and managing to get his hand-selected successor Dilma Rousseff elected, Brazil’s economy soured, with the nation just now beginning to emerge from its worst recession on record.

Rousseff was impeached last year for breaking budgetary rules. She and her backers say her ouster was actually a ‘coup’ orchestrated by her vice president and now President Michel Temer, who himself faces corruption charges.

Slideshow (15 Images)

During his trial, Lula gave five hours of fiery and defiant defense, proclaiming his innocence and saying that it was politics and not the pilfering of public funds that put him on trial.

“But what is happening is not getting me down, just motivating me to go out and talk more,” Lula said in his testimony. “I will keep fighting.”

($1 = 3.22 reais)</s>Brazil’s former president Luiz Inacio Lula da Silva has been found guilty of corruption charges stemming from a scheme at the state oil company, Petrobras. He will remain free on appeal. Lula remains a very popular politician with widespread public support.

The Brazilian newspaper Estadao was the first to report the news, in Portuguese.</s>Former Brazilian President Luiz Inacio Lula da Silva was found guilty of corruption Wednesday in the first of five trials facing the popular politician.

A federal judge sentenced the former leader of Latin America’s biggest country to nine years and six months in prison after his conviction Wednesday. He will remain free while the decision is appealed.

Lula was convicted of accepting $1.2 million in bribes from contractor OAS, which prosecutors said was used for the purchase and renovation of a luxury penthouse apartment in the seaside town of Guaruja. Prosecutors said that in return Lula helped the firm win contracts with state-run oil giant Petrobras.

The verdict by Judge Sergio Moro, who is known for taking a tough stance on politicians and entrepreneurs involved in Brazil’s billion-dollar corruption scandal known as Lava Jato, or Car Wash, will be analyzed by the 4th Federal Regional Court, a standard practice. The court takes an average of a year and a half to review sentencing decisions.

Moro will also preside over one of Lula’s other four Lava Jato-related trials. The other three will be tried in the Federal Court of Brasilia.

This is the highest-profile conviction to date related to the widespread graft investigation, which has seen several politicians and well-known figures in business fall from grace for their involvement in the sweeping corruption scheme.

They include impeached lower house Speaker Eduardo Cunha, who is serving a sentence of 15 years and four months for corruption, money laundering and tax evasion, and former Rio de Janeiro Gov. Sergio Cabral, who was sentenced to 14 years in prison on charges of corruption and money laundering.

Lula, who was president from 2003 to 2011, is considered the country’s most popular politician and was seen as the top candidate for the 2018 elections in polling company Datafolha’s June poll.

12:30 p.m.: This article was updated throughout with Times reporting.

This article was originally published at 11:55 am.</s>Brazilian Federal Judge Sergio Moro sentenced Lula da Silva to nine-and-a-half years in jail. He will remain free during his appeal, and faces corruption, obstruction of justice and money laundering charges in four other court cases.

Wednesday’s sentencing stems from a wide-ranging corruption investigation into the state-run oil company Petrobras, dubbed “Operation Car Wash.” The accusations against Lula da Silva emerged after he left office in 2011.

Moro said the former President benefited from the renovation of a triplex in a beach town near Sao Paulo by the construction company OAS.

The charges were connected to 3.7 million reais’ ($1.1 million) worth of bribes received from OAS through the beachfront apartment. In return, Lula da Silva helped the builder acquire contracts from the oil company, the prosecutor’s office said.

Lula da Silva, 71, strongly denied any wrongdoing. His defense said he was a victim of political persecution.

“The sentencing of former President Luiz Inacio Lula da Silva represents an attack on democracy and the Federal Constitution,” Lula da Silva’s Workers’ Party said in a statement.

The party’s statement said that the sentencing was carried out by a “partial judge, who is accountable to the media and to those who do not accept Lula’s success story in the presidency.”

“Today, more than ever, we stand in solidarity with Lula, and with his children and grandchildren,” the statement said.

In his decision, Moro said the sentencing brought him no personal satisfaction and he found it “lamentable” that a former President had been criminally sentenced. He closed with Thomas Fuller’s words: “Be you never so high the law is above you.”

Universally known as Lula, Lula da Silva is a founding member of Brazil’s only socialist political party, Partido dos Trabalhadores, the Workers’ Party.

Born into a working class family, he left school and began working at age 12. Unhappy with the lack of political representation of the working class in Brazil, he decided to get involved in politics.

He won two terms as president, serving from October 2002 until January 2011. He was friends with the late Cuban leader Fidel Castro, who supported his political career, and attended Castro’s funeral last December.

He left office with a 90% approval rating but was questioned by police about the corruption allegations in March 2016.

Da Silva’s wife, Marisa Leticia Lula da Silva, and six others also was charged. She died in February.</s>SÃO PAULO -- Former Brazilian President Luiz Inácio Lula da Silva was convicted convicted Wednesday on corruption charges stemming from the Car Wash graft probe, the massive investigation into corruption centered on state-owned oil company Petróleo Brasileiro.

Mr. da Silva has repeatedly denied any wrongdoing. His representatives couldn't immediately be reached for comment.

Judge Sergio Moro sentenced Mr. da Silva to nine years and six months, a spokeswoman for the judge said.</s>Former Brazilian leader Luiz Inacio Lula da Silva, who rose from childhood poverty to become a two-term president, was convicted on corruption charges on Wednesday in the first of five graft trials he faces.He was sentenced to nine and a half years in prison. He will remain free on appeal.

The ruling marked a stunning fall for Lula, Brazil's first working-class president who left office six years ago with an 83-percent approval rating. The former union leader won global admiration for transformative social policies that helped reduce stinging inequality in Latin America's biggest country.

Former U.S. President Barack Obama once labeled him the most popular politician on earth.

The verdict represented the highest-profile conviction yet in the sweeping corruption investigation that for over three years has rattled Brazil, revealing a sprawling system of graft at top levels of business and government and throwing the country's political system into disarray.

Judge Sergio Moro found Lula guilty of accepting 3.7 million reais ($1.2 million) worth of bribes from engineering firm OAS SA, the amount prosecutors said the company spent refurbishing a beach apartment for Lula in return for his help winning contracts with state oil company Petroleo Brasileiro .

Federal prosecutors have accused Lula, who first took the presidency in 2003, of masterminding a long-running corruption scheme that was uncovered in a probe into kickbacks around Petrobras.

Lula's legal team has previously said they would appeal any guilty ruling. They have continuously blasted the trial as a partisan witchhunt, accusing Moro of being biased and out to get Lula for political reasons.

Lula's lawyers did not immediately respond to requests for comment.

Senator Gleisi Hoffmann, the head of the Workers Party, lashed out at the ruling, saying Lula was convicted to prevent him from running for the presidency next year. She said the party would protest the decision and was confident the ruling would be overturned on appeal.

The Brazilian real extended gains following Moro's decision and reached its strongest in two months. The benchmark Bovespa stock index rose to a session high. (Reuters)</s>Former Brazilian President Luiz Inácio Lula da Silva was convicted on corruption charges stemming from the Car Wash probe, the massive graft investigation centered on state-owned oil company Petróleo Brasileiro.</s>Former Brazilian leader Luiz Inacio Lula da Silva, 71, was convicted on corruption charges on Wednesday and sentenced to nearly 10 years in prison.</s>Former Brazilian President Luiz Inacio Lula da Silva has been convicted of corruption and money laundering charges and sentenced to nine and a half years in prison.

Still, Lula — as he's commonly known — has long denied the charges and plans to appeal the conviction. He will remain free as long as that appeals process unfolds.

Federal Judge Sergio Moro found the popular politician guilty of illegally taking more than $1 million in kickbacks from an engineering company, using the money to refurbish a beachfront apartment.

Yet this is hardly the only charge Lula faced — and far from the end of his difficult legal straits. Bloomberg reports this case was just one of five filed against the left-wing politician, ranging from "allegations of influence peddling to accepting perks from companies in exchange for government favors."

Even as his appeal is heard in this case, he faces four more trials over corruption allegations.

Prosecutors had long been "building a case that alleges millions of dollars' worth of payments and goods were funneled from Petrobras, Brazil's biggest company, to Silva and his associates," NPR's Bill Chappell noted last year. "An official prosecutor's statement lists real estate, construction work and luxury furniture as some of the alleged ill-gotten gains, along with suspicious cash donations."

"The present conviction does not bring this judge any personal satisfaction. Quite the contrary, it is regrettable that a former president be criminally convicted," Moro said in his decision, the Associated Press reports. "It doesn't matter how high you are, the law is still above you."

The marquee conviction is just the latest development in a massive corruption probe known as Operation Car Wash, which has also shaken the tenure of Brazil's current president, Michel Temer.

Temer, a conservative, took power last year after lawmakers impeached Lula's handpicked successor, Dilma Rousseff, for allegedly mishandling the country's budget.

Now, Temer faces impeachment questions of his own. The deeply unpopular sitting president was slapped with formal corruption charges of his own last month. He was tape-recorded apparently approving hush money for a jailed politician, and prosecutors say he has accepted promises for millions of dollars in bribes from Brazilian meatpacking giant JBS.

Despite Lula's own scandals, the former leader was viewed as a possible front-runner for the 2018 presidential race. Since leaving office roughly six years ago after two terms, Lula has retained a high level of popularity.

But Bloomberg points out that Wednesday's conviction is likely to complicate the left-wing politician's hopes of returning to power.

"Over the past few months he has consolidated his position in opinion polls as the front-runner for the presidential race," the media outlet reports, "but he will become ineligible if his sentence is upheld on appeal."</s>Former Brazilian leader Luiz Inacio Lula da Silva, who rose from childhood poverty to become a two-term president, was convicted on corruption charges on Wednesday in the first of five graft trials he faces.

He was sentenced to nine and a half years in prison. He will remain free on appeal.

The ruling marked a stunning fall for Lula, Brazil’s first working-class president who left office six years ago with an 83-percent approval rating. The former union leader won global admiration for transformative social policies that helped reduce stinging inequality in Latin America’s biggest country.

Former U.S. President Barack Obama once labeled him the most popular politician on earth.

The verdict represented the highest-profile conviction yet in the sweeping corruption investigation that for over three years has rattled Brazil, revealing a sprawling system of graft at top levels of business and government and throwing the country’s political system into disarray.

Judge Sergio Moro found Lula guilty of accepting 3.7 million reais ($1.2 million) worth of bribes from engineering firm OAS SA, the amount prosecutors said the company spent refurbishing a beach apartment for Lula in return for his help winning contracts with state oil company Petroleo Brasileiro.

Federal prosecutors have accused Lula, who first took the presidency in 2003, of masterminding a long-running corruption scheme that was uncovered in a probe into kickbacks around Petrobras.

Lula’s legal team has previously said they would appeal any guilty ruling. They have continuously blasted the trial as a partisan witchhunt, accusing Moro of being biased and out to get Lula for political reasons.

Lula’s lawyers did not immediately respond to requests for comment.

Senator Gleisi Hoffmann, the head of the Workers Party, lashed out at the ruling, saying Lula was convicted to prevent him from running for the presidency next year. She said the party would protest the decision and was confident the ruling would be overturned on appeal.

The Brazilian real extended gains following Moro’s decision and reached its strongest in two months. The benchmark Bovespa stock index rose to a session high.

Despite the conviction and other charges against him, Lula remains a popular figure among many Brazilian voters, according to recent polls, and has said he wants to run again for the top office next year.

But he would be barred from office if his guilty verdict is upheld by an appeals court, which is expected to take at least eight months to rule.

If he cannot run, political analysts say Brazil’s left will be thrown into disarray, forced to rebuild and somehow find a leader who can emerge from the immense shadow that Lula has cast on Brazilian politics for three decades.

“Lula’s absence opens a gaping hole in the political scene, it creates an enormous power vacuum on the left,” said Claudio Couto, a political scientist at the Getulio Vargas Foundation, a top university. “We have now entered a situation of extreme political tension, even beyond the chaos we have been living for the last year.”

Couto said he expected Lula’s guilty verdict to be upheld by the appeals court. That would leave the 2018 presidential race wide open and raise chances of a victory by a political outsider, given most known contenders are also ensnared in Brazil’s corruption investigations.

Lula’s two-terms were marked by a commodity boom that momentarily made Brazil one of the world’s fastest-growing economies. His ambitious foreign policies, aligning Brazil with other big developing nations, raised the country’s profile on the global stage.

With Lula’s swagger setting the tone, Brazil sought to shrug off northern economic and political hegemony and engage in global problems, like Middle East peace and the standoff over Iran’s nuclear program.

But upon leaving office and managing to get his hand-selected successor Dilma Rousseff elected, Brazil’s economy soured, with the nation just now beginning to emerge from its worst recession on record.

Rousseff was impeached last year for breaking budgetary rules. She and her backers say her ouster was actually a ‘coup’ orchestrated by her vice president and now President Michel Temer, who himself faces corruption charges.

During his trial, Lula gave five hours of fiery and defiant defense, proclaiming his innocence and saying that it was politics and not the pilfering of public funds that put him on trial.

“But what is happening is not getting me down, just motivating me to go out and talk more,” Lula said in his testimony. “I will keep fighting.”
Former Brazilian president Luiz Inácio Lula da Silva is convicted on corruption and money laundering charges in connection with the Petrobras investigation. Lula, who remains free on appeal, is sentenced to nine and a half years in prison.