Brazil Scandal Approaching Rousseff, Opposition’s Neves Says

Brazil’s largest corruption scandal is encroaching on President Dilma Rousseff after the treasurer of her party was arrested, the leader of the country’s main opposition party said.

“The political crisis is intensifying and is increasingly getting closer to the government and the very president of the republic,” said Aecio Neves, head of the opposition PSDB party, who lost to Rousseff in the October election. Impeachment “is a possibility the PSDB today is discussing very frankly.”

Joao Vaccari Neto, the Workers’ Party treasurer, was arrested Wednesday in connection with a probe into money laundering and illegal donations to the party, public prosecutor Carlos Lima told reporters in Curitiba. Vaccari was detained in February for questioning about donations from contractors of state-run oil company Petroleo Brasileiro SA, which is at the center of an alleged kickbacks scheme.

Vaccari’s arrest was unjustified and his lawyers are working for his release as soon as possible, the party said in an e-mailed statement. While Vaccari presented his resignation, the PT said it remained confident of his innocence, according to the statement signed by party president Rui Falcao. It previously said that all donations it received were legal.

The arrest comes as Rousseff seeks to rebuild her strained coalition in Congress and after two anti-government protests over the past month that included calls for her impeachment.

‘Banned Word’

“Impeachment is not a banned word,” Neves told reporters, according to a transcript of his comments posted on his party’s website.

Other state companies are coming under investigation over fraud allegations. The federal police carried out eight search warrants and two arrest warrants Wednesday as part of a probe at state-run power company Eletronorte.

Under Brazil’s constitution, two-thirds of the lower house of Congress must approve impeachment proceedings, with the Supreme Court called in to make a final ruling in the case of criminal charges. If the accusations are for so-called crimes of responsibility, such as neglect, the Senate rules.

Should Rousseff be removed from office, Vice President Michel Temer of the PMDB party would take over. If the ticket on which both Rousseff and Temer ran is annulled before the end of 2016, because of illegal campaign financing, for example, new elections would be called. Thereafter, Congress would appoint a new president to carry out the remainder of the four-year term.

Pedro Barusco, a former Petrobras services manager who entered a plea bargain with prosecutors, told investigators the PT received as much as $200 million from the scheme in the decade through 2013, according to a transcript of his testimony.

Vaccari is being held under the legal concept of “preventive prison,” which in Brazil allows for arrest and detention when a judge rules that evidence against a suspect is sufficiently strong.

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