Tue, May 17, 2011 - Page 7 News List

Brazil lawmakers seek investigation of Palocci: report

MONEY TREE:A paper stopped short of accusing the powerful politician of corruption, but detailed how his wealth had grown by a factor of 20 since 2006

Reuters, SAO PAULO, BRAZIL

Brazilian opposition lawmakers will seek a probe into the personal wealth of Antonio Palocci, the government’s chief of staff and a key economic policymaker, Folha de S.Paulo newspaper reported on Sunday.

Folha reported the opposition PPS party wanted a Brazilian congressional ethics committee to investigate allegations that Palocci’s wealth had increased by a factor of 20 since 2006.

“Palocci needs to explain the origin of this money,” Rubens Bueno, the PPS leader in the lower house, was quoted as saying.

The main opposition PSDB party also wants Palocci to explain the source of the funds, Folha reported.

Palocci is a favorite on Wall Street and widely seen as the main champion of fiscal stability and orthodox economic policies within the government of Brazilian President Dilma Rousseff, a pragmatic leftist who took office on Jan. 1.

Palocci’s position as chief of staff and his close relationship with Rousseff make him arguably the second-most powerful politician in Brazil. Financial markets could react negatively if his future in the job becomes endangered.

Folha’s front-page report did not directly accuse Palocci of corruption, but provided extensive details on the rapid growth of his wealth while he served in the lower house of the National Congress.

The report said his consulting firm purchased an apartment in Sao Paulo last year for about US$4 million — even though his declared net worth in 2006 was about US$227,000.

In a statement sent to Brazilian media on Sunday after Folha’s story was published, Palocci stood by previous declarations of his net worth and said his firm earned legitimate profits thanks to economic consulting work.

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