MercoPress. South Atlantic News Agency

Bookie confirms funding for Lula's Party

The corruption scandals engulfing Brazil's ruling Workers Party, PT, was further stoked Wednesday by a top bookmaker who confirmed he had been offered a government contract in return for funding political campaigns.

A congressional committee investigating illegal bookmaking questioned Carlos Augusto Ramos, known as "Carlos Cachoeira," who appeared visibly nervous as he answered the lawmakers' questions.

"I don't know what's legal and what's illegal. All the contracts I signed were legal to me, until they were cancelled" Ramos told the committee questioning him about his dealings with official entities.

Last year Ramos released a video, taped in 2002, in which Waldomiro Diniz, then president of the lottery in the state of Rio de Janeiro, asked him to donate money to candidates fielded by the PT, then headed by now former Cabinet official Jose Dirceu.

"I made this tape because Waldomiro Diniz was asking me for money to bypass a bidding process" Ramos said.

When Luiz Inacio Lula da Silva took office in January 2003, Dirceu was made presidential chief of staff, and Diniz became his legislative advisor.

The videotape's release in February got Diniz fired following claims of extorting the heads of Rio de Janeiro's numbers racket to fund PT campaigns. He was also accused of helping a U.S. company that won a 130 million US dollars contract to supply equipment for Brazil's legal official lottery.

Diniz's illegal dealings with numbers racketeers, which surfaced last year, was the first scandal that tarnished the PT, but the party succeeded in thwarting opposition efforts to have Congress investigate the case and probe Dirceu's role in it.

The bookies' investigation runs parallel to another focusing on corruption in the government managed postal service, and a third kicks off next Tuesday which will look into allegations that during Lula's first two years in office the PT bribed Congress members in support of the administration's legislative projects.

The secretary of the committee investigating the postal service, Omar Serraglio, said Wednesday that he will subpoena the head of the administration's communications office, Luiz Gushiken, a close friend of Lula, to testify regarding the service's activities.

Serraglio made the comment after former postal service Director Airton Dipp testified Wednesday that Gushiken's office had more power than the service in deciding publicity contracts, which has been identified as a source of corruption.

Last week, the press revealed that a company Gushiken had owned increased its business 600% after Lula took office.

However President Lula da Silva publicly expressed support for Gushiken who was confirmed in the administration's communications office.