Brazil Detains Former Rousseff Finance Minister Mantega

  • Probe to see if he pressured to name tax authorities: Folha
  • Mantega helped design policies that are basis for impeachment

Brazilian police detained former Finance Minister Guido Mantega for questioning in relation to alleged tax benefits granted to companies in exchange for bribes, Brazil’s leading newspapers reported.

The detention on Monday comes only days before President Dilma Rousseff faces a key vote in the Senate that could temporarily remove her from office on charges of illegally using loans from state banks to finance budget deficits. Police are questioning Mantega on whether he helped companies including Cimento Penha that received favorable rulings from tax appeal board known as Carf, Estado de S.Paulo and Folha de S.Paulo newspapers reported.

Mantega, whose lawyer did not immediately reply to phone calls requesting comment, was the longest-serving finance minister since Brazil’s return to democracy in 1985. He presided over Brazil’s economic boom and then its slowdown, and was one of the architects of government spending policies that became the basis for a request to impeach Rousseff.

“The continuation of investigations keeps a negative agenda at the center of debate that tends to weaken the already-fragile attempts by the presidency to avoid impeachment,” Rafael Cortez, a political analyst at Sao Paulo-based economic consulting firm Tendencias Consultoria, said by phone.

A two-year corruption probe has already led to the imprisonment of numerous leading company executives and Rousseff’s allies. Earlier this year her predecessor and mentor, Luiz Inacio Lula da Silva, was detained for questioning on allegations he received perks from construction companies in exchange for benefits granted during his term.

Lula and Rousseff deny any wrongdoing.

By the time Mantega was replaced with Joaquim Levy at the outset of Rousseff’s second term, the nation’s budget deficit had doubled in one year to 6 percent of gross domestic product. In the following year it surpassed 10 percent of GDP as the government rolled back tax benefits Mantega had implemented and paid debts to state banks.

Mantega allegedly pressured companies to make donations to Rousseff’s 2014 re-election campaign, newspaper Folha de S. Paulo reported May 8, citing testimony by Marcelo Odebrecht. Mantega’s lawyer told Folha the minister “never discussed campaign issues with anyone.”

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