Brazil’s Petrobras Corruption Scandal Gets Lula’s Finance Minister Arrested

Former Brazil Finance Minister Guido Mantega Arrested on Corruption Charges - Marcelo Casal Jr./ABr

Former Brazil Finance Minister Guido Mantega Arrested on Corruption Charges - Marcelo Casal Jr./ABr Brazilian police arrested Guido Mantega, a former finance minister under presidents Luiz Inácio Lula da Silva and Dilma Rousseff, as part of the investigation into the vast Petrobras corruption scheme.

However Brazilian Judge Sergio Moro later in the day revoked the temporary detention order citing Mantega’s cooperation with a search of his home and his wife’s surgery in a São Paulo hospital.

Mantega, who was an important figure in the Workers’ Party, to which Lula and Rousseff belonged, was arrested at a São Paulo hospital where his wife had undergone surgery, his lawyer José Roberto Batochio told reporters.

Mantega was finance minister from 2006 until 2015, that is both under the administrations of Lula and Rousseff.

Former Brazil Finance Minister Guido Mantega Arrested on Corruption Charges - Marcelo Casal Jr./ABr

In a statement, the federal police said its officers were carrying a new wave of arrest orders in the sprawling bribe and kickback scandal involving state oil giant Petrobras, contractors and politicians.

According to a note from the Federal Prosecution Service, in July, 2012, consortium Integra Offshore, formed by companies Mendes Júnior and OSX, signed a US$ 922 million contract with Petrobras for the construction of platforms P-67 and P-70.

Without naming Mantega, the police said “a finance minister allegedly acted in 2012 together with one of the companies to negotiate the transfer of resources to pay the campaign debts of the political party of the moment.”

News of Mantega’s arrest came just two days after a judge leading part of the investigation into the scandal, accepted charges against Lula for allegedly accepting bribes from a construction company linked to the Petrobras case.

Lula is the co-founder of the once-unstoppable Workers’ Party. Its 13 years in power ended last month when his hand-picked successor, Dilma Rousseff, was convicted of budget irregularities in an impeachment trial.

The charges against Rousseff were unconnected to the Petrobras case, but the scandal – combined with Brazil’s worst recession in decades – did much to bring her down.

Earlier this month, prosecutors announced that they are also investigating Lula on corruption charges during his two terms in office.

Lula has denied the charges and said plainly that the accusations against him and the impeachment last month of Rousseff, his successor as president, are political ruses cooked up by Brazil’s conservative politicians to circumvent elections that could see the return of the PT.

Corruption allegations have also engulfed many of the PT’s most hardline opponents, including the unpopular former president of the lower chamber, Eduardo Cunha.

Former President Luiz Inácio Lula da Silva considered “insolent” the statement made by Federal Judge Sergio Moro declaring that the members of the task force of the Operation Car Wash were not aware that the wife of former Finance Minister Guido Mantega, arrested for a few hours, would undergo a surgery on the same day.

“His wife has cancer and was beginning a surgery. They took him for later, in great insolence, apologize for it, by saying that they were not aware that she had cancer. They knew that the lady was in the surgery room and it was not to embellish herself, for a make up, she was undergoing a surgery,” said Lula during an election rally in Recife.

Prosecutors Side

Federal prosecutor Carlos Fernando dos Santos Lima said that former Finance Minister Guido Mantega is accused of having requested a total US$ 1.561 million from executive Eike Batista to clear Workers’ Party’s (PT) campaigning debts.

Mantega was detained Thursday morning (September 22) as part of the 34th stage of Operation Car Wash, dubbed the X Files, which probes into facts related to the construction of two pre-salt oil exploration platforms (P-67 and P-70).

To carry out the works, Petrobras contracted consortium Integra Offshore, formed by construction company Mendes Júnior and OSX, the latter having once belonged to Batista.

According to Eike Batista’s testimony, the meeting in which the request was made took place in November 2012, when Mantega was also head of Petrobras’s administration board.

The prosecutor explained that Batista spoke as witness in June 2016, when the entrepreneur both declared Mantega’s request was made and denied the amount was to be pocketed as kickbacks or that it would favor consortium Integra Offshore in the construction of the platforms.

Lima went on to say that the consortium has been under scrutiny since last year as “it defeated the competition at Petrobras with no expertise on the such constructions in works related to platforms.”

The prosecutor further stated that the scope of Operation Car Wash is much larger than just Petrobras, adding that there is evidence that the funds being probed under the operation were earmarked for the payment of the 2010 presidential campaign.

Federal Police Commissioner Igor Romário, who attended the interview, outlined the circumstances of ex-Minister Guido Mantega’s detention. According to him, law enforcement agents had no knowledge of the fact that his wife had been admitted at the Albert Einstein Hospital, which they learned upon arrival at Mantega’s apartment.

Before starting the searches in his home, Romário recounted, the police talked to Mantega on the phone and set off for the hospital to pick him up.

Moro decided to temporarily freeze bank and investment accounts belonging to eight people investigated in this new phase of Operation Car Wash. The move encompasses a total US$ 3.123 million, and affects Mantega as well as the other accused.

The ruling, issued by the Federal Prosecution Office, aims to ensure public coffers are refunded in case of conviction, but does not mean the investigated own the amount.

MP/ABr

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