Brazil Q&A: Why is South America's largest country in such a big mess?

Supporters rally for Brazilian President
brazil lula rally shasta darlington lklv_00011108

    JUST WATCHED

    Supporters rally for Brazilian President

MUST WATCH

Supporters rally for Brazilian President 01:32

Story highlights

  • The trouble really began back in March 2014 when President Dilma Rousseff's party was ensnared in a money laundering investigation
  • Brazil is now beset by a host of problems: Governmental crisis, protests, Zika virus and a deep, stubborn recession

Sao Paulo (CNN)The Brazilian government, already struggling with a deep recession and Zika virus pandemic, is now fighting just to survive.

The latest crisis began when federal police took former President Luiz Inacio Lula da Silva in for questioning as part of a long-running corruption investigation.
A few days later, his handpicked successor and protege, President Dilma Rousseff, named him chief of staff, a move that largely protects him from prosecution. This prompted massive street protests. A legal battle has ensued trying to block Lula's appointment while efforts to impeach the president have gained momentum.
    Here are some questions and answers about the turmoil roiling South America's largest country:

    What's Petrobras and 'Operation Car Wash'?

    The trouble really began back in March 2014 when Rousseff's party was ensnared in a money laundering investigation into Petrobras, Brazil's state-run oil company.
    The investigation, dubbed "Car Wash" in reference to the car wash services at gas stations, uncovered a widespread bribery operation.
    Here's the way it worked:
    Construction companies paid huge kickbacks to well-placed Petrobras executives and politicians in exchange for lucrative contracts. The probe has engulfed dozens of Brazil's leading business leaders and politicians -- many, but not all, from the governing Workers' Party. Many who've been charged have agreed to testify for the state, leading to a longer list of suspects. Operation Car Wash is still ongoing, has had almost 30 individual subinvestigations and more than 100 arrests.
    It's worth mentioning that Rousseff was the head of Petrobras' board from 2003 to 2010, when she left to run for office. She has not been implicated in the investigation and says that she was not aware of the corruption.

    How does Lula da Silva fit into this?

    Earlier this month, federal police in the "car wash" probe raided Lula da Silva's home and questioned him on suspicion he benefited from the Petrobras bribery scheme. At the same time, prosecutors in a different case placed the once-popular former President under formal investigation of money laundering charges linking him to construction companies named in the Petrobras bid cartel.
    OAS, Odebrecht, Camargo Correa and others made large donations to his NGO, the Lula Institute, and paid for luxury renovations in two properties -- a country home and a beachfront property in Guaruja, in the state of Sao Paulo -- investigators suspect actually belonged to Lula da Silva.
    The Lula Institute says Lula da Silva is not the owner of either properties, but he was seen inspecting the triplex apartment in 2014, and the country home is registered in the name of two associates of Lula da Silva's son.
    Lula da Silva's controversial appointment to chief of staff would make it so that only the Brazilian Supreme Court could take on the case against him, a process that could take months, if not years.
    In recorded phone calls made public, Rousseff and Lula da Silva talk about sending him a document formalizing his appointment as chief of staff -- something to be only used if "necessary." This is being interpreted by critics to mean he could use the documents to avoid imprisonment.
    The move, seen as political by the opposition, has been defended by Lula da Silva himself. At a recent pro-government protest, he showed up in person and said, "I'm going there to help President Dilma (sic) to do the things that she needs to do in this country."

    Why are people protesting?

    There are two groups protesting, and they have diverging ideologies.
    By far, the largest is the pro-impeachment group. They are protesting rampant corruption plaguing the Workers' Party government and other parties. "Resign now!" is a popular chant aimed at Rousseff.
    They are also pushing lawmakers to forge ahead with impeachment proceedings. These protesters sport the country's flag colors, yellow and green, and Brazilian soccer team jerseys. Inflatable dolls of Rousseff and Lula da Silva donning a prisoner uniform are sure sights in these demonstrations.
    Another group is demonstrating in support of the Workers' Party, Lula da Silva and Rousseff.
    They say they are out in defense of democracy, chanting "we won't accept a coup," a reference to the numerous attempts to have Rousseff removed from office -- from pressuring her to resign to impeachment proceedings that they say are unfounded.
    They are quick to remember the coup d'état in 1964 when the country's left-wing government was overthrown and replaced with a military dictatorship that followed for 20 years. These protesters have a strong union base and have been wearing bright red, the Workers' Party color.

    Will Rousseff be forced out of office?

    Committee to review impeachment request for Brazil's president
    Committee to review impeachment request for Brazil's president

      JUST WATCHED

      Committee to review impeachment request for Brazil's president

    MUST WATCH

    Committee to review impeachment request for Brazil's president 04:08
    With the popular protests gathering momentum, the lower house of Congress moved forward with an impeachment procedure that had been languishing.
    Started in December, the process has been accepted by the lower house of Congress, and a 65-member committee was already formed to analyze the impeachment request. There were many impeachment requests filed, but the one accepted by Congress alleges Rousseff violated the budget law because she used accounting tricks to hide a large deficit to win re-election in 2014. The impeachment request is not linked to the corruption investigations.
    Rousseff will have 10 sessions to present her defense, and the lower house would need a two-thirds majority to pass the impeachment. If Rousseff is impeached, Vice President Michel Temer would assume the presidency until new elections in 2018.

    Is this going to affect the Olympics?

    Brazil clears residents ahead of Olympics
    brazil olympics evictions darlington pkg_00000614

      JUST WATCHED

      Brazil clears residents ahead of Olympics

    MUST WATCH

    Brazil clears residents ahead of Olympics 02:09
    Many factors will be against Brazil this summer:
    -- Protests might still be rocking the country in August.
    -- There were 1.5 million cases of Zika in 2015.
    -- Contaminated water in Summer Games sites is a concern.
    Not surprisingly, the political shake-up has deeply affected the Brazilian economy, which coupled with a deep recession, has resulted in fewer than half Summer Games events tickets being sold. Organizers expected Brazilians to buy more, but they have been greatly affected by the economic woes.
    After the Rousseff-Lula da Silva conversation was leaked, Brazil's financial markets responded immediately with a jump, as analysts believe impeaching Rousseff would help recover investors' trust in the country's battered economy.