Brazil’s Petrobras graft probe expanded

Brazil’s Supreme Court has given prosecutors the go-ahead to investigate dozens of top politicians, including a former president and leaders of Congress, for alleged links to a kickback scheme at the state-run energy company.

The inquiry will now focus on a former president, the leaders of the lower house and Senate and 51 other figures as federal prosecutors dig into political ties to the scheme that they say saw at least $800m in bribes and other funds paid by big construction and engineering firms in return for inflated contracts with the state energy company Petrobras.

The investigation and any possible trials will take years to play out, but the action throws the second term of President Dilma Rousseff into further disarray as she faces dueling political and economic crises. She is not being investigated, although she was chairwoman of the Petrobras board for several years as the kickback scheme played out.

Experts say the investigations could create further gridlock in Congress just as Brazil and its sputtering economy desperately need fiscal and political reform measures passed. But the investigation is widely viewed as a necessary evil for the nation’s democracy to advance and shake off deep-rooted impunity for the rich and powerful.

“You can’t put this genie back in the bottle. People are going to have to face the consequences,” said Paulo Sotero, director of the Brazil Institute at the Woodrow Wilson International Center for Scholars in Washington. “There used to be the idea that people in positions of power in Brazil were untouchable. They’re no longer untouchable.”

During the first phase of the inquiry, investigators struck plea bargain deals with several “operators” who said they helped move the money around in the deals, along with former top Petrobras executives who admitted raking in hundreds of millions in bribes. That testimony paved the way for the opening of investigations into politicians who allegedly benefited from kickbacks.

Under Brazilian law, the Supreme Court has to approve any investigation of lawmakers or top officials in the executive branch. Any criminal charges or trials of such figures must also must be approved and judged by the top court.

Among those the court said would now be investigated are former president and current senator Fernando Collor, who was forced from the presidency by a corruption scandal in 1992 before making a political comeback in recent years.

Also to be investigated are Senate leader Renan Calheiros and Eduardo Cunha, who heads the lower house. Both are members of the powerful Brazilian Democratic Movement Party, part of the governing coalition led by the Workers’ Party. Both have already shown they are ready to create serious gridlock in Congress because of the investigation.

Also on the investigation list are Rousseff’s former chief of staff and current senator, Gleisi Hoffman; Rousseff’s former Energy Minister Edison Lobao; and Antonio Palocci, who was finance minister under the previous president, Luiz Inacio Lula da Silva, and was Rousseff’s first chief of staff.