Ex-Brazilian Finance Minister to Stand Trial in Petrobras Graft Case

A former Brazilian finance minister and chief of staff for successive Workers Party (PT) governments was ordered on Thursday to stand trial on corruption and money laundering charges in an expanding graft probe around state-run oil company Petrobras.

 

Anti-corruption Judge Sergio Moro ruled that prosecutors had presented sufficient evidence to warrant a trial for Antonio Palocci, a party founder and confidant of two presidents, who was arrested in late September and has been jailed since.

 

Investigators allege Palocci conspired with construction firm Odebrecht SA to pay 128 million reais ($39.5 million) from 2008 to 2013 to the party, politicians and other officials in exchange for bloated contracts with Petroleo Brasileiro SA, or Petrobras, as the company is known.

 

Thirteen others will stand trial with Palocci, including former Odebrecht Chief Executive Officer Marcelo Odebrecht and powerful political strategist Joao Santana, the main force behind presidential campaigns for PT and many other Latin American leaders in recent years.

 

Odebrecht is already serving a 19-year sentence for a previous conviction in the Petrobras case, though his penalty is likely to be reduced if prosecutors reach a long-awaited plea bargain deal with him and other Odebrecht executives.

 

Palocci, a trained medical doctor, was instrumental in the rise of the PT from its earliest days as an outgrowth of Brazil's labor movement.

 

After the party reached power in 2003, he was a key player during the presidencies of Luiz Inácio Lula da Silva and Dilma Rousseff, who was impeached this year for breaking budgetary rules.

 

Nearly 200 executives and former politicians have been charged in the sweeping Petrobras probe and 83 have already been found guilty. Prosecutors are seeking 38 billion reais ($12 billion) in damages from companies and individuals involved.

 

Brazil's top prosecutor, Rodrigo Janot, is investigating 66 politicians - many sitting lawmakers - for participation in the scheme.

 

That number could grow significantly as more of those charged turn state's witnesses and as investigators work on a plea-bargain deal with scores of executives from the Odebrecht construction conglomerate, the main corporate player in the scheme, according to prosecutors.

 

($1 = 3.24 reais)

(Reporting by Brad Brooks; Editing by Alan Crosby)