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Brazil's President Dilma Rousseff smiles as she attends a meeting with jurists at Planalto Palace in Brasilia, Brazil, March 22, 2016.

ADRIANO MACHADO

Brazil's dizzying political drama took another turn late Monday when a judge on the Supreme Federal Tribunal ruled that the investigation of former president Luiz Inacio Lula da Silva must be handled by the country's highest court, removing the case from the federal court of high-profile judge Sergio Moro.

It was a rare setback for Judge Moro, whom many Brazilians view as a folk hero waging a crusade against a rotten political establishment with Lava Jato, the sprawling graft investigation he oversees. Last week, he rocked Brazil by releasing audio recordings of many of the popular former president's phone calls, including ones with the current President, Dilma Rousseff.

Justice Teori Zavascki ruled that Judge Moro put national sovereignty at risk when he released the tapes, and ordered them sealed.

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The decision protects Mr. da Silva from arrest by federal police working on Lava Jato – a move many Brazilians were predicting that Judge Moro would make this week – although the Supreme Court could still order him detained.

The Zavascki decision does not, however, affect Mr. da Silva's status as a cabinet minister. Last Thursday, Ms. Rousseff swore him in as her chief of staff, a cabinet position, which would mean that he could be investigated only by the Supreme Court, effectively shielding him, in a move her critics decried as obstruction of justice.

But multiple injunctions were almost immediately issued to block him from taking the job, and on Friday another Supreme Court justice rejected a government petition to suspend all those injunctions – essentially stripping him of the job for the time being.

Justice Gilmar Mendes (who had already made statements that Mr. da Silva should not join the cabinet before he heard the case) ruled that the former president could not take up the post because of the likelihood that he had been named to the cabinet to obstruct the investigation and thus national interest.

Mr. da Silva is under investigation for money laundering in connection with the vast kickbacks-for-contracts and influence-peddling scheme at the national energy company Petrobras. He denies all wrongdoing and Ms. Rousseff said she invited him into government in an effort to address the country's enormous political and economic crisis.

Justice Zavascki's ruling was the second on the da Silva case at the Supreme Court on Monday. Justice Rosa Weber rejected a habeus corpus petition from the former president's lawyers asking that the case be removed from Mr. Moro's purview. She cited procedural reasons.

In his ruling, Justice Zavascki, who is the justice in charge of Lava Jato at the Supreme Court, chastised Judge Moro for overstepping. "At this point, there is a need to recognize that the practical effects of the improper disclosure of the intercepted telephone conversations are irreversible," he said. He rejected as "unfit" Judge Moro's assertion that releasing the calls was in the public interest and justifiable since the people who were recorded are public figures. His ruling effectively trumps that of Justice Mendes.

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But both of their rulings will be reviewed by the full session of the court, which has proceeded with an Easter break despite the paralyzing level of anxiety in Brazil at the moment. The rulings will not be reconsidered until March 30 at the earliest.

The post of chief of staff is being filled by Eva Chiavon, an obscure former nurse, while Mr. da Silva remains blocked from occupying it.

Meanwhile, impeachment proceedings against Ms. Rousseff are proceeding and appear to be gathering political strength. The Brazilian Democratic Movement Party (PMDB), her largest coalition partner, is now openly in talks with the opposition Brazilian Social Democratic Party (PSDB) to form a "national unity" government in the event of an impeachment. Should she be impeached, Vice-President Michel Temer of the PMDB becomes president, although he is also under investigation by the national electoral court for improper use of funds. In a national poll by Datafolha last week, just 1 per cent of Brazilians said they would vote for Mr. Temer if elections were held now.

Supporters of Ms. Rousseff's Workers' Party say the impeachment is tantamount to a coup to install the PSDB – whose candidate, Aecio Neves, lost the 2014 federal election to Ms. Rousseff – as government. PMDB and PSDB figures are reported to be discussing who would take up key posts such as finance minister in a new government.

Ms. Rousseff said on Monday that she has no intention of leaving office. "I will never resign under any circumstances," the embattled President said in a speech to legal experts. "I have committed no crime that would warrant shortening my term."

She repeated her assertion that the move to end her term is an attempted putsch. "No half-words are fit – what is under way is a coup against democracy," she said. "It doesn't matter if a coup is done with rifles, vengeance or the political will of some to get to power more quickly …"

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The seemingly limitless scale of Lava Jato grew on Monday when federal police carried out dozens of new raids, including some on offices of the engineering giant Grupo Odebrecht SA. The company's former chief executive officer, Marcelo Odebrecht, has already been sentenced by Judge Moro to more than 19 years in jail for corruption and money laundering, in one of the highest-profile white-collar crime convictions in Brazil's history.

But Mr. Odebrecht has now agreed to negotiate a deal to co-operate with investigators (which he can do after sentencing, under Brazil's convoluted plea-bargain law) and there is anticipation here that he may "set off more bombs," as it is called in Portuguese, by revealing more details about the bribery schemes involving senior politicians.

After the raids on Monday, the company ordered its mid-level executives facing criminal charges in connection with Lava Jato to also co-operate with investigators. "Reviews and considerations made by our shareholders and executives have led Odebrecht to opt for definitive collaboration with the Lava Jato investigations," the company said in a statement, adding that the measure was intended to help "build a better Brazil."

The focus in Brazil today is strongly on political involvement, with much less attention being paid to the apparently rife illegal but routine practices in the country's largest businesses. The newspaper O Globo reported that documents collected by the Lava Jato prosecutors show that Odebrecht was documenting bribes paid for contracts back to 1988 and had a "Department of Bribery" that handled illegal payments for, among other projects, many stadiums built or refurbished for the World Cup.

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