Brazil’s Federal Police arrested early this Monday, September 26, in São Paulo, former Finance Minister Antonio Palocci, as ordered by the 35th stage of Operation Car Wash, dubbed Operation Omertà.
The allegations are that Palocci would be linked to directors of Odebrecht construction company, one of Brazil’s biggest companies.
The operation probes into the former minister and other people allegedly involved in a scheme to benefit the company with contracts negotiated with the government.
According to the federal police, the negotiations involved tax benefits in addition to increased Odebrecht’s line of credit with the Brazilian Development Bank (BNDES) to an African country, as well as intervention in Petrobras bidding contracts for the acquisition of 21 drillships for pre-salt exploration.
The Prosecutors’ Case
During a press conference on the 35th phase of Operation Car Wash, Federal Prosecutor Laura Gonçalves Tessler said former Finance Minister Antonio Palocci worked in an “intense and recurrent” way for the interests of construction company Odebrecht in the federal government.
In the conference attended by the prosecutors, police reported that the negotiations involved the concession of fiscal benefits, an increase in Odebrecht’s credit line with the Brazilian Social Development Bank (BNDES) in a country in Africa, as well as interference in a Petrobras deal on the acquisition of 21 drillships for pre-salt oil exploration.
Gonçalves reported that the construction company transferred some US$ 39.5 million to a bank account supposedly controlled by the onetime cabinet member.
The account is said to have aimed at favoring Odebrecht’s use of illicit advantages. Palocci is believed to have worked intensely and recurrently in the defense of the interests of the firm.
“These doings were made possible by backroom deals and exchange of favors for the benefit of the Workers’ Party (PT). By all accounts, Palocci managed the account from 2006 to at least November 2013 as far as proof shows, with payments registered in this spreadsheet,” the prosecutor declared.
The amounts listed in the company’s spreadsheet, brought to light in a previous phase of Operation Car Wash, had been registered under the name “Italiano,” police reported.
Federal Police Commissioner Filipe Pace said there is “no shadow of a doubt” that “Italiano” in the spreadsheet of Marcelo Odebrecht, then CEO of the company, refers to Palocci.
Federal Judge Sergio Moro, in charge of the proceedings under Operation Car Wash, ruled the freezing of US$ 39.5 million from Palocci’s bank accounts.
The same amount was also blocked in the accounts of Branislav Kontic, former adviser for the ex-minister, and onetime Cabinet Secretary Juscelino Dourado.
All three faced temporary detention as part of the 35th stage of the police crackdown.
The lawyer of Palocci, José Roberto Batochio, criticized his client’s arrest, saying that the whole operation remained in secret, in military dictatorship style.
“We’re returning to authoritarian days, to arbitrariness. No need to arrest a person who has fixed address, who was minister twice, who can give all the information when called to testify. Is it just for the show?,” he asked.
Batochio said that he was outraged at the name given to the operation, Omertà, which is a code of honor that places importance on silence and is used by the Italian Mafia.
“It’s just because he has an Italian name, as I also do, it’s absolutely biased with descendants of Italians. This name is dangerous,” he said.
The allegations are that Palocci would be linked to directors of Odebrecht construction company, one of Brazil’s biggest companies. The operation probes into the former minister and other people allegedly involved in a scheme to benefit the company with contracts negotiated with the government.
According to the federal police, the negotiations involved the provisional presidential decree n. 460, from 2009, that provided for premium credit on Taxes on Consumption of Goods and Services, in addition to increased Odebrecht’s line of credit with the Brazilian Development Bank (BNDES) to an African country, as well as intervention in Petrobras bidding contracts for the acquisition of 21 drillships for pre-salt exploration.
His lawyer denied the charges. “This is something absolutely vague, empty. For those who want an excuse, it’s an excuse, but the fact is that the Finance Minister needs to have a dialogue with the business sector, with Brazil’s chain of production, in order to establish public policies. If a minister talks to someone from the private sector, is he already suspect of committing a crime?,” asked Batochio.
Antonio Palocci was arrested at home, in the region of Jardins, west zone of São Paulo capital. Searches were also made in his office.
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