Rio de Janeiro: Brazilian police on Monday arrested Antonio Palocci, a former finance minister and presidential chief of staff in recent leftist Workers Party governments, in the latest phase of a sweeping anti-corruption probe, prosecutors said in a statement.
They said Palocci acted as a liaison between the Workers Party and Latin America’s largest engineering and construction conglomerate, Odebrecht SA, between 2006 and 2013 in a political kickback scheme centred on contracts at state-controlled oil company Petroleo Brasileiro SA, or Petrobras.
Palocci was former president Luiz Inacio Lula da Silva’s finance minister and chief of staff to ex-president Dilma Rousseff, who was ousted in August in an impeachment trial that ended 13 years of Workers Party rule.
Investigators allege the former minister improperly approved loans from state development bank BNDES to Odebrecht in Africa and for oil platforms. They also allege that he pushed legislation through Congress to help the company win tax advantages.
Prosecutors said they had found evidence that Odebrecht paid 128 million reais (Dh145 million) to the Workers Party and its representatives, including Palocci.
Construction magnate Marcelo Odebrecht, whose family owns the group, received a 19-year sentence in March for bribery, money laundering and organised crime in relation to the scandal at Petrobras.
Two other people were arrested in Monday’s raids, both former aides of Palocci. Palocci’s lawyer did not immediately respond to requests for comment. Odebrecht’s press office said the company would not comment.
BNDES officials did not immediately respond to a request for comment.
As finance minister starting in 2003, Palocci continued the anti-inflation policies of the previous government, helping calm market concerns that Lula and his Workers Party would break with the market friendly policies of the previous government.
He resigned in 2006 in the face of allegations he lied to congress about his presence at a mansion in the capital Brasilia, where political graft was alleged to have been negotiated.
When Rousseff succeeded Lula in 2011, Palocci became her chief of staff but ended up resigning again in the face of accusations that his personal finances were not consistent with his government salary.
A medical doctor by training, he was a leading confidante and power broker in both the Lula and Rousseff governments and a senior campaign official for the Workers Party.
Rousseff was succeeded by her vice-president Michel Temer.
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