Petrobras corruption scandal heats up

A massive Brazilian corruption scandal centered on state-controlled oil giant Petrobras heated up Wednesday with the arrest of the treasurer of the ruling Workers Party, or PT. Joao Vaccari is accused of collecting irregular donations for the PT from leading Brazilian construction companies; those donations, according to prosecutors, stem from inflated contracts that those companies secured with Petrobras in exchange for bribes. Investigators believe Vaccari used a Sao Paulo print shop, registered under the name of government-allied trade unionists, to launder proceeds from the scheme, said prosecutor Carlos Fernandes Santos Lima, who is based in the southern city of Curitiba, the epicenter of the corruption investigation. The treasurer was arrested by Federal Police officers outside his Sao Paulo home as he was heading out for a morning jog, police told reporters. He was then transported to Curitiba. An arrest warrant also has been issued for Vaccaris sister-in-law, Marice Correa, while the treasurer’s wife, Gisela Lima, has been summoned to testify as a witness. Vaccaris arrest is an additional blow to President Dilma Rousseff, a former Petrobras chairwoman who has not been implicated in the corruption case but has seen her approval rating plummet as a result of the scandal. The treasurer had denied the accusations in an appearance before a congressional committee last week. Prosecutors say the charges against Vaccari are based on the testimony of Pedro Barusco, a former manager of Petrobras engineering and services department who reached a plea deal with prosecutors. Police have detained five former Petrobras executives as well as owners and executives of construction companies that had contracts with Brazil’s largest company, which represents 12 percent of Brazilian gross domestic product. Around 50 politicians suspected of benefiting from the corruption scheme, most of them allies of Rousseff, also are under investigation, including the heads of both houses of Brazil’s Congress. The Brazilian construction and engineering companies involved in the scheme, which investigators say dates back more than 10 years, would inflate their invoices, splitting the extra money with corrupt Petrobras officials while setting aside some of the loot to pay off politicians who provided cover for the graft. Vaccari is suspected of money laundering and suspicious transactions between 2004 and 2014, including the purchase of a beachfront apartment and a combined total of 300,000 reais worth of small deposits into one of his wifes accounts over a period of three years, prosecutors say. The head of the PTs bloc in Congress, Siba Machado, said the arrest was politically motivated and that emergency meetings will be held to discuss this latest development.