Former Chief of Staff Arrested in Bribery Scandal in Brazil

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – Former Finance Minister under Luiz Inacio Lula da Silva’s administration, and former president Dilma Rousseff’s Chief of Staff Antonio Palocci, was arrested today by federal police in connection with the Lava Jato (Car Wash) investigations. According to officials, there is evidence that Palocci acted as a go-between for the government and engineering company Odebrecht, trading bribes for Petrobras contracts.

“There is evidence that the former minister acted directly to provide economic benefits to the business group in several procurement areas with the government and was himself and characters of his political group benefited from sizeable illicit values,” said the note released by federal police on Monday morning.

In the 35th phase of the Lava Jato , officials issued 27 search warrants and eighteen arrest warrants in six states and the capital, Brasilia. Along with Palocci, police have also arrested two of his aides during his time in the federal government.

Construction conglomerate Odebrecht has been at the center of many investigations related to corruption and bribery schemes at Petrobras. The company’s CEO, Marcelo Odebrecht, in jail since June of 2015, was sentenced in March 2016 to nineteen years in prison for money laundering and corruption.

Palocci is the second highest-ranking official of the Lula and Rousseff administrations to be arrested in recent days. Last Thursday former Finance Minister, Guido Mantega, was temporarily arrested accused of negotiating the approval of the construction of two pre-salt oil exploration platforms to two well-known engineering firms in exchange for the ‘donation’ of over US$2.35 billion to the PT (Workers) Party. Mantega replaced Palocci as Finance Minister in the Lula government after the latter was implicated in corruption allegations in 2006.