Brazil’s political elite to be investigated in vast Petrobras graft probe

Anadolu Agency

SÃO PAULO — Brazil’s Supreme Court on Friday released the names of senior politicians it has authorised prosecutors to investigate for their alleged roles in a multi-billion-dollar corruption scandal at state-run oil giant Petrobras.

Supreme Court minister Teori Zavascki granted investigations into 47 politicians, including 12 acting senators and 22 acting deputies, under Operation Lava Jato, or Car Wash, that is probing the vast alleged kickback scheme.

Some of Brazil’s top politicians — including acting and former congressional leaders, senators, deputies, ministers, governors, and even a former president — could now face prison sentences, if tried and convicted.

Zavascki also authorized the publication of the 54 individuals for whom 28 investigations had been requested by Prosecutor General Rodrigo Janot on Tuesday.

Among the most senior politicians to be investigated by the Supreme Court are:

  • President of the Lower House, Eduardo Cunha;
  • President of the Senate, Renan Calheiros;
  • Senator Gleisi Hoffmann, who was President Rousseff’s Chief of Staff;
  • Edison Lobão, formerly Energy and Mines Minister under President Rousseff;
  • Impeached former Brazilian President Fernando Collor, now an acting senator.

The politicians set to be investigated are members of five political parties, including President Dilma Rousseff’s Workers’ Party (PT) and the giant kingmaker PMDB party — of which Cunha and Calheiros are members. Most of those to be investigated, however, are members of the Progressive Party (PP).

All but one of the politicians set to be investigated were from Rousseff’s ruling coalition.

The full list of authorised and archived investigations can be found here.

Under Brazilian law, only the Supreme Court can try senior politicians and Cabinet members, as they have parliamentary privilege.

Other requests have been dismissed for lack of evidence and archived, including requests to investigate Senator Aécio Neves — Rousseff’s main rival in the 2014 presidential elections — and former President of Chamber of Deputies Henrique Eduardo Alves.

Prosecutors can now request access to bank and telephone records of those whose investigation has been authorised.

Many fear the process to bring those eventually accused to trial could drag on for several years, reminiscent of the “mensalão” cash-for-votes scandal, which took seven years to come to court.

It is hoped, however, that lessons learned during that scandal will help prosecutors avoid delays and expedite the process.

Rousseff, who chaired the board of directors at Petrobras while much of the wrongdoing is alleged to have taken place, was mentioned by witnesses but has been cleared. The incumbent president has repeatedly denied knowledge of the scheme and urged a thorough investigation.

Prosecutors allege construction and civil engineering companies signed deliberately bloated contracts with Petróleo Brasileiro SA, as the oil company is formally known, and those operating the cartel pocketed the difference and funneled proceeds to politicians and parties, including the Workers’ Party and its allies.

Operation Lava Jato began last March after investigators uncovered a vast money laundering scheme. The most significant arrests at that time were of Alberto Youssef, a black market money changer, and Petrobras director Paulo Roberto Costa, one of three Petrobras executives subsequently arrested.

Further arrests followed, and approximately a dozen executives remain under “preventive detention”, after a subsequent stage in the operation in November saw around 40 people from some of Brazil’s biggest construction companies — including Odebrecht, OAS and Camargo Corrêa — accused of involvement in the scheme.

Much of the information that spawned the wider probe in the kickback scheme came from testimony given to investigators by Youssef and Costa, in exchange for plea bargains to secure lesser sentences.

The exact scale of the graft at Petrobras is not known, but one report estimated it could be as much as $30 billion.

As the country’s biggest company, Petrobras has lost about $100 billion of value since September, putting pressure on the already sagging Brazilian economy and leading to Moody’s credit rating agency recently stripping the oil giant of its investment grade — with fears other agencies could follow suit.

Uncertainty over Rousseff’s government, already strained by rebellions within its ungainly multi-party coalition system, has led to a further deterioration in the economy, with the Brazilian currency, the real, plunging to 10-year lows this week.

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