A broad investigation into corruption at Petrobras, Brazil’s state-owned oil company, widened substantially on Wednesday with the arrests of a sitting senator and a billionaire investment banker who is one of the nation’s top financial executives.
The federal prosecutor’s office said in a statement that Brazilian Senator Delcidio do Amaral, a member of the governing Workers’ Party and an important ally of Brazilian President Dilma Rousseff, had been arrested in Brasilia on Wednesday morning.
There have been calls for Rousseff to resign, and the Amaral arrest is likely to complicate her efforts to govern and move economic proposals, including unpopular austerity measures, through Brazilian National Congress.
Photo: Reuters
The Eurasia Group in a research note put the risk of Rousseff not finishing her term at 40 percent.
Also arrested on Wednesday was Andre Santos Esteves, the chief executive of the Brazilian investment bank BTG Pactual.
In the past few years, the bank has not only expanded in Latin America, but has also acquired a bank in Switzerland. It has significant investments in the oil and gas sector, and acquired Petrobras assets in Africa in 2013.
According to trial testimony, top executives at Petrobras accepted huge bribes from a cartel of companies, enriching themselves while also channeling funds to political figures and to the leftist Workers’ Party.
Although no testimony has emerged suggesting that Rousseff personally profited from the scheme, she was chairwoman of the oil giant from 2003 to 2010, roughly corresponding when the system of collusion, kickbacks and payoffs took shape.
While the investigation has broadened during the past year and a half to include executives of construction companies and even the head of the military’s secret nuclear program in the 1970s and 1980s, Wednesday’s arrests were of particular note, as members of Brazils’ congress have long enjoyed wide immunity from prosecution.
Amaral was the first sitting senator to be arrested since at least the establishment of the 1988 constitution, according to David Fleischer, a political analyst and professor emeritus at the University of Brasilia.
“The accusations are pretty grave,” Fleischer said, pointing to the unusual unanimous decision by Brazil’s Supreme Court to issue the arrest orders.
He also said that “it was quite unusually decided very quickly” by the court, indicating the seriousness of the allegations.
On Wednesday night, the Brazilian Senate voted to approve the arrest order.
So far, Esteves is the most high-profile financial executive to be accused of being involved in the money-laundering scheme.
Amaral and Esteves are accused of trying to obstruct the investigation, specifically by pressuring Nestor Cervero, a former Petrobras executive, not to cooperate. Documents from the prosecutor’s office accuse both of “undertaking efforts to dissuade Nestor Cervero from signing a plea agreement with the attorney general’s office.”
That pressure included a payment of 4 million reals (US$1 million) as well as monthly payments of at least 40,000 reals to his family members, the documents say.
Cervero was sentenced in August to 12 years in jail for corruption in the Petrobras case.
Amaral did not comment on the charges on Wednesday.
BTG Pactual said in a statement that it would cooperate with the investigation.
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