By Rogerio Jelmayer And Jeffrey T. Lewis
SÃO PAULO--A widening investigation into alleged corruption at
Brazil's state-controlled oil company Petróleo Brasileiro SA took a
step closer to President Dilma Rousseff Wednesday morning when
police arrested her political party's treasurer, João Vaccari
Neto.
Mr. Vaccari has been charged with receiving "irregular
donations" for the Workers' Party, or PT, from some of the oil
company's suppliers. Police allege the suppliers inflated contracts
with Petrobras, funneling some of the proceeds to politicians and
election campaigns.
Pedro Barusco, a former manager of Petrobras's engineering and
services department who is cooperating with prosecutors, told a
congressional hearing in March that he amassed nearly $100 million
in bribes as part of the alleged scheme and the PT may have
received twice as much. Mr. Barusco told lawmakers he used to meet
with Mr. Vaccari in high-end hotels or restaurants to discuss how
to share bribes, and that some of the money was passed on to Ms.
Rousseff's 2010 election campaign.
Mr. Vaccari testified last week before a congressional committee
investigating the allegations and denied accepting any illegal
donations. Ms. Rousseff has denied any involvement in or knowledge
of the alleged corruption. Brazil's Attorney General Rodrigo Janot
said in March that there are no facts to motivate an investigation
of the president.
The president's office referred requests for comment on Mr.
Vaccari's arrest to the PT, and the PT had no immediate comment.
Attempts to contact Mr. Vaccari or his lawyer were
unsuccessful.
The country's Supreme Court in March approved investigations
into dozens of sitting congressmen, including members of Ms.
Rousseff's Workers Party. Last week, police said they found
evidence of similar scams at Brazil's health ministry and at
state-owned bank Caixa Econômica Federal.
Both the health ministry and Caixa said they would investigate
the allegations and are cooperating with police and prosecutors.
Caixa said Tuesday that according to reports from the Federal
Police and the prosecutors' office, there are "no indications of
irregular practices" by the bank or its employees.
The arrest of Mr. Vaccari is likely to spur renewed calls for
the president to be impeached. Thousands of Brazilians have taken
to the streets on two recent occasions to protest corruption in the
government. A survey released last weekend by the Datafolha polling
company said 63% of those asked now support impeachment and put the
president's approval rating at 13%.
Senator Aecio Neves, who lost to Ms. Rousseff in last year's
presidential election, said Wednesday his Brazilian Social
Democracy Party is studying the possibility of impeaching Ms.
Rousseff, but hasn't come to a conclusion yet.
Congress would need evidence of direct involvement by Ms.
Rousseff in the scheme before deciding to impeach, according to
Rafael Cortez, a political scientist at São Paulo-based Tendencias
Consultant Group.
"Just because party members were involved in irregularities
doesn't mean Dilma was," he said. "But [Vaccari's arrest] obviously
weakens her government even more, though given her low approval
ratings, she can't fall much farther."
Ms. Rousseff's government is trying to pass a series of
unpopular economic measures intended to cut its budget deficit and
spur a recovery. She faces resistance from members of the PT and
allied parties in Congress, many of whose members are under
investigation in the scandal, and her political weakness is making
that effort more difficult, Mr. Cortez said.
Police said at a news conference that they arrested Mr. Vaccari
at his São Paulo home early Wednesday morning and brought his wife
in for questioning, and also arrested three other people.
Police last year arrested several executives of the construction
companies alleged to have overcharged Petrobras, as well as
executives of the oil company, some of whom have turned state's
evidence. Petrobras has said it considers itself a victim of the
alleged scheme and is cooperating with authorities.
Five different witnesses have testified that Mr. Vaccari was
involved in illegal activities for the PT, inspector Igor Romario
de Paula of the Federal Police said at the news conference.
Paulo Trevisani and Luciana Magalhaes contributed to this
article.
Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com and
Jeffrey T. Lewis at jeffrey.lewis@wsj.com
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