Brazil Police Widen Petrobras Probe to Offshore Laundering

  • Investigation renews focus on ruling Workers' Party in scandal
  • Lula not focus of police probe but his apartment ownership is

Brazil’s federal police carried out search and arrest warrants in four cities on Wednesday to probe allegations of money laundering related to a corruption scheme at state oil company Petrobras.

The target of the investigation is whether construction company OAS SA and the bankers’ housing cooperative Bancoop used real estate properties in Brazil to launder money received from kickbacks, according to Federal Prosecutor Carlos Santos de Lima. OAS declined to comment and Bancoop said in an e-mailed statement that it had transferred the property being investigated to OAS in 2009.

As part of the probe, police are checking whether former President Luiz Inacio Lula da Silva owned one of the properties, an apartment in the Guaruja beach complex. Public Prosecutor Cassio Conserino told Veja magazine over the weekend there is enough evidence to prosecute Lula for concealing assets from authorities. He is a founder of the ruling Workers’ Party and a mentor to President Dilma Rousseff.

Lula wasn’t the focus of Wednesday’s police probe, said a government official with direct knowledge of the operation. Police are targeting family members of Joao Vaccari Neto, the former head of Bancoop and ex-treasurer of the Workers’ Party, said Lima.

The probe put the spotlight back on the Workers’ Party and the so-called Car Wash scandal that has rattled Brazil’s business and political elites with the arrest of top executives and legislators, including the government’s former leader in the Senate, Delcidio Amaral. Rousseff has been struggling to regain political momentum amid the worst recession in decades and a pending impeachment process in the lower house of Congress.

The Lula Institute said in a statement the former president informed tax authorities he had a stake in the building project, adding it wouldn’t comment further on speculation. Vaccari Neto’s lawyer, Luiz Flavio Borges D’Urso, didn’t immediately return a phone call seeking comment.

Suspects detained in Wednesday’s police raid will be held in the southern city of Curitiba for questioning.

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