Brazil justice won't lift ban on Silva taking Cabinet post

RIO DE JANEIRO – A Brazilian Supreme Court justice on Tuesday rejected a government appeal to let former President Luiz Inacio Lula da Silva assume a Cabinet job, a posting that would make it harder to prosecute him.

The justice acted as police made more detentions in a sprawling corruption scandal at the state-run oil company that has already ensnared dozens of top politicians and has circled closer to Silva.

Justice Rosa Weber denied motions by the government to overturn a decision last week by another Supreme Court justice who blocked Silva from becoming chief of staff for his successor, President Dilma Rousseff. Last week’s decision also transferred the probe targeting Silva back to the lower court that had been spearheading it.

A final decision on whether Silva can assume the Cabinet post is not expected until the full Supreme Court convenes next week. There are no sessions scheduled this week because of the Easter holiday.

Meanwhile, police targeted one of the hemisphere’s largest construction companies as part of the investigation centred on the alleged kickback scheme at the state oil giant Petrobras.

Police carried out a wave of searches and detentions linked to Odebrecht, one of the companies at the centre of the Petrobas case. Investigators allege corruption ran so deep in the Brazilian company that it had a specific office in charge of disbursing bribes.

Prosecutors said they detained more than a dozen people, including company executives, as part of the “Car Wash” probe.

Prosecutors have said the scheme involved more than $2 billion in bribes paid to obtain Petrobras contracts, with some money making its way to the governing Workers’ Party as well as opposition parties. Some of Brazil’s wealthiest people have come under scrutiny as have dozens of politicians from both the governing coalition and the opposition.

While the construction company’s former president, Marcelo Odebrecht, was recently sentenced to more than 19 years in prison for his role in the scheme, Tuesday’s operation widened the probe into the firm itself — one of the main builders for this year’s Olympics in Rio de Janeiro.

Silva has also come under scrutiny. Police showed up at his home earlier this month and took him in for questioning. He has not been charged and has repeatedly denied any wrongdoing.

Critics contend Silva’s nomination to be chief of staff for Rousseff is an attempt to protect him, because only the Supreme Court can authorize investigations, charges or detention of Cabinet ministers and other top government officials. Rousseff has denied that, saying her mentor would help build legislative support for her agenda and aid in her fight against impeachment proceedings in congress over allegations she violated fiscal regulations.

Rousseff came out swinging in comments moments after Weber’s decision, saying the impeachment proceedings were baseless and amounted to an attempted coup against her.

“What is happening is a coup against democracy,” she said. “I did not commit any crime against the constitution or the laws that would justify the interruption of my mandate.”

The president of the Senate, Renan Calheiros, echoed Rousseff, telling reporters that while impeachment was “a normal thing” under Brazil’s constitution, any president who is targeted must have committed a crime.

“When impeachment happens without that, it’s not called impeachment, it’s called something else,” Calheiros told reporters following a meeting with Silva.

The impeachment is based on the findings of a federal audits court that said Rousseff’s government broke the fiscal responsibility law by manipulating accounts to allow for increased public spending ahead of the 2014 presidential race.

Calheiros belongs to the PMDB party, which is part of Rousseff’s governing coalition, but it was his fellow party member, speaker of the lower house Eduardo Cunho, who brought the impeachment charges against Rousseff. Both men have been implicated in the Petrobras scandal.

The Odebrecht company has repeatedly denied wrongdoing, but on Tuesday it issued a terse statement saying it was co-operating with the investigation.

Speaking at a news conference, prosecutors said Odebrecht had a “structured operations sector” that was responsible for bribes and continued to operate even well after the Petrobras corruption probe began two years ago.

Odebrecht “really had a sector that organized, did accounting for, had a hierarchy and a mandate for the payment of bribes,” federal prosecutor Carlos Fernando dos Santos Lima said, adding that federal and state projects were being scrutinized.

Odebrecht is suspected of making payouts in projects including the airport in the central city of Goiania, the extension of the Rio de Janeiro subway and Sao Paulo’s Arena Corinthians, where the opening match of the 2014 World Cup was held, according to court findings on which the searches and arrests were based.

The document said projects in Portugal, Angola and United Arab Emirates also were involved, but did not name them.

The findings said investigators are looking into a possible payment of 500,000 Brazilian reais ($138,000) involving the Corinthians soccer club.

Police official Renata Rodrigues called the company’s illicit payout scheme “professionalized and institutionalized” and said Marcelo Odebrecht appears to have been directly involved in the scheme even after his detention last June.

Rodrigues said employees involved in the scheme emailed their superiors with requests for the authorization of bribes.

Laura Goncalves Tessler of the federal prosecutors’ office said those who worked in the payouts sector tended to be veteran employees who were “very well paid.” She said that after the probe began, the company attempted to shield the employees by offering them postings abroad.