Brazil’s Largest Corruption Probe Snares Former Minister Dirceu

Bloomberg – 9:04 am

Brazilian police expanded their investigation into alleged bribes and kickbacks as the country’s political and economic woes intensify.

Police carried out 40 court orders in the 17th phase of the “Carwash” probe, the press office of the public prosecutor’s office said Monday. Arrests in the latest phase included Jose Dirceu, who was chief of staff under former President Luiz Inacio Lula da Silva, according to an e-mailed statement.

The yearlong probe into alleged kickbacks, bribes and inflated construction contracts involving Petroleo Brasileiro SA has ensnared former oil executives, top builders and politicians. Standard & Poor’s cited “political uncertainties” stemming from the investigation among reasons for cutting Brazil’s credit outlook to negative last week. Investigations threaten to further slow an economy already heading toward its worst recession in 25 years.

The federal police said they would hold a press conference at 10 a.m. local time in Curitiba.