MercoPress. South Atlantic News Agency

Brazilian prosecutors after another can of worms: the huge development bank

Folha de S.Paulo cited Marcelo Odebrecht testimony, the jailed former CEO of the Odebrecht conglomerate, who is trying to broker a deal to become a state's witness.

A former Brazilian finance minister and the current head of the nation's state economic and social development bank allegedly pressured big construction firms into making campaign donations for President Dilma Rousseff, a newspaper reported on Sunday. If it proves correct it would be the first concrete lead linking the Petrobras corruption with BNDES, long suspected by Brazilian prosecution.

 The Folha de S.Paulo newspaper cited testimony it says Marcelo Odebrecht, the jailed former chief executive of the Odebrecht construction conglomerate, gave while trying to broker a deal to become a state's witness.

According to Folha, Odebrecht told prosecutors that former Finance Minister Guido Mantega and BNDES head Luciano Coutinho were in charge of pressuring businesses that secured BNDES loans for overseas work to make contributions to Rousseff's 2014 reelection.

In a written statement given to Folha, Coutinho denied playing any role in Rousseff's campaign, while Mantega's lawyer Jose Batochio said his client also had nothing to do with obtaining donations for the president's reelection.

Folha did not say how it acquired the leaked testimony or when Odebrecht gave it.

Odebrecht, who ran Latin America's largest engineering firm, was sentenced in March to more than 19 years on corruption charges for his role in a massive graft scheme that has engulfed state-run oil company Petrobras. His company used BNDES loans to finance several large projects abroad.

If prosecutors accept him as a witness he could cut his sentence in half under Brazilian law.

The report is the first time that Brazil's BNDES economic and social development bank has been linked to the Petrobras scandal, though federal prosecutors speaking on background have long indicated the institution is a likely target in the probe.

The investigation into graft at Petrobras, dubbed “Operation Car Wash,” has uncovered a kickback scheme that has ensnared dozens of top politicians and high-level executives at Brazil's biggest construction and engineering firms.

Prosecutors say company officials paid billions in bribes over several years in return for bloated contracts.

Rousseff has not been linked to the payment of bribes and impeachment proceedings against her are not connected to the probe. The Senate is due to vote this week whether to put her on trial for her removal from office.

Sao Paulo media also reported that another of the big conglomerates caught in the Petrobras corruption net, Andrade Gutierrez claims that BNDES loans for public works overseas, mostly under a government to government agreement, had to deliver a 1% toll. It's not clear who received the funds, but the report supports the statement with some research of its own.

Between 1999 and 2006, for example, the Odebrecht conglomerate received on average US$ 166 million for overseas contracts, while in the period 2007/2014 the average jumped to one billion dollars. Allegedly Lula da Silva after leaving office in 2010 was involved in promoting overseas business for the Brazilian conglomerate given his political clout and raft of international contacts.

For these 'favors' supposedly the ex president was generously rewarded, but those fees were not declared.

BNDES has a greater turnover than the World Bank and has been used to support Brazilian multi-nationals globally and rescue them from mismatch consequences.

Rousseff has not been linked to the payment of bribes and impeachment proceedings against her are not connected to the probe. The Senate is due to vote this week whether to put her on trial for her removal from office.

In related news vice-president Michel Temer, who at the end of this week could succeed Rousseff at the Planalto met on Sunday evening with his closest associates at the Jaburu Palace. The meeting included Senator Romero Juca, Eliseu Padilha, Moreira Franco (Temer's spokesman), Geddel Vieria Lima and Henrique Meirelles who is pinpointed as Brazil's next Finance minister under a Temer administration.

Meirelles is a former Bank of Boston CEO, and was Brazil's central bank chief under president Lula da Silva.