Brazilian bribe money funded Rousseff’s reelection

Bribe money from a giant corruption scheme at Brazilian state oil company Petrobras went into President Dilma Rousseff’ reelection campaign coffers, a former CEO has told prosecutors, a report said Thursday.

Folha de Sao Paulo daily quoted what it said was leaked testimony from Otavio Marques Azevedo, ex-CEO of Andrade Gutierrez, Brazil’s second-largest construction company, who was arrested last June.

Testifying as part of a plea bargain with prosecutors probing Petrobras corruption, Azevedo reportedly said that millions of dollars in legal donations to the 2014 Rousseff campaign were originally funded with money from bribes paid in connection to huge contracts handed to Andrade Gutierrez.

Folha’s report said that it was not clear whether the dirty money was paid into the accounts of Rousseff’s reelection committee or to her Workers’ Party.

The report fuels a potentially explosive new front in the crisis engulfing Rousseff and Brazil’s government.

She is already facing impeachment on allegations that her government illegally masked budgetary shortfalls during her reelection year. But a so far quieter probe is also underway at the country’s electoral court into allegations that her campaign was funded with stolen Petrobras money.

If the court finds Rousseff guilty on this, then her reelection victory would be annulled, meaning both she and her vice president would have to step down, followed by new elections.

Prosecutors say that for years under the presidency of Rousseff’s predecessor and ally Luiz Inacio Lula da Silva, a group of powerful companies and politicians conspired in a pay-to-play scheme where bribes were given to win inflated contracts.

Bribes went to executives at Petrobras and other state companies, influential politicians and also allegedly into political campaigns, including those of Rousseff and her narrowly defeated rival in 2014 Aecio Neves.

The money allegedly ending up in Rousseff’s campaign originated in contracts won by Andrade Gutierrez at a Rio oil facility, a nuclear power station, and the huge Belo Monte hydroelectric dam complex, the report said.

Folha quoted Rousseff lawyer Flavio Caetano responding that all donations had been given “legally and voluntarily to the 2014 campaign — and in smaller amounts than those given to the opposing candidate.”

“It is unfortunate that the instrument of a plea bargain should be used, yet again, for political reasons via selective leaking,” he said.