Brazil ex-President Lula and wife face charges in corruption scandal

Lula and his wife Marisa Leticia are accused of failing to declare a luxury penthouse

Federal prosecutors in Brazil have asked a judge to file corruption charges against former President Luiz Inacio Lula da Silva.

They accused him of being the "boss" of a huge corruption scheme that cost the state oil company, Petrobras, an estimated $12.6bn (£9.5bn) in losses.

Prosecutors had been investigating whether Lula and his wife failed to declare ownership of a luxury flat.

He has denied owning the penthouse and says the case is politically motivated.

A criminal conviction would bar him from running for president in 2018.

Lula has called the episode a "deplorable spectacle". He and his wife deny any wrongdoing and say there is no proof for any of the allegations.

A judge is due to rule in the next few days whether to formally charge Lula.

Corruption allegations

The flat was built by a construction company implicated in the scandal at Petrobras.

Several politicians and Petrobras executives have been arrested and sentenced after a two-year anti-corruption investigation called Operation Car Wash.

Prosecutors initially focused on money laundering, but soon came to allegations of a complex corruption scheme at Petrobras, where overpriced contracts were given in return for bribes.

Some of the illicitly-obtained money was used to finance the electoral campaign of top Brazilian politicians, they allege.

"Lula was the big boss of the Petrobras corruption scheme. Lula was on top of the power pyramid," prosecutor Deltan Dalagnol said at a news conference in Curitiba on Wednesday.

"Lula appointed several senior executives at Petrobras so that they could raise funds for political parties in the governing coalition [through corruption].

"Without Lula's decision power, it would be impossible for this scheme to exist," the prosecutor added.

Analysis by BBC's South America business correspondent Daniel Gallas

Last month, after an interview with the BBC, Lula told us he was feeling encouraged that prosecutors were finally presenting their cases against him. He said would rather respond formally to all accusations than see the daily drip of new accusations being leaked through the press.

This case is of major importance for the future of both Lula and his party. Opinion polls suggest Lula is still a political force to be reckoned with and could make a bid for the presidency again.

He is most likely the only politician from the Workers' Party with real chances of fighting for the party's project and legacy.

But in order for him to stand a chance, he will have to convincingly clear his name from all accusations.

A former union leader, Lula, 70, served as president from 2003 to 2010.

He announced plans earlier this year to run for office again in 2018 but in July he was indicted on charges of obstructing investigations into Petrobras.

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His successor as president, Dilma Rousseff, was dismissed by the Senate last month after an impeachment trial.

The investigation centres on a luxury penthouse in the resort of Guaruja

Prosecutors say OAS, a construction company at the centre of the Petrobras affair, bought and refurbished the property for Lula and his wife.

The company had earned lucrative contracts during Lula's years in office, and has been linked to kickbacks from Petrobras.

But the former president insists he has never owned the property.

Six other people are also facing charges, including two executives from OAS.

The luxury penthouse in the seaside resort of Guaruja is estimated to be worth up to $550,000 (£415,000).