Brazil minister arrested in graft sweep

2011-08-09 22:22

Brasilia - Police arrested Brazil's deputy tourism minister on Tuesday in a corruption sweep tied to funding for major sports events, the latest in a series of scandals to tarnish President Dilma Rousseff's government.

Deputy minister Frederico Costa was among 38 tourism ministry officials and entrepreneurs arrested in the operation, federal police said.

Tourism Minister Pedro Novais Lima was called to the presidential palace to give explanations, raising the possibility that Rousseff could lose her fourth cabinet minister since May to graft allegations.

Lima is a member of the PMDB, Rousseff's main coalition partner, which has been at odds with her since virtually the start of her presidency on January 1 and has partly blocked her agenda in Congress.

The police said there were strong indications that public funds earmarked for professional training had been embezzled.

The Brazilian government is funding schools throughout the country to train taxi drivers, waiters and hotel staff as the country prepares to host the 2014 World Cup and the 2016 Olympics in Rio de Janeiro.

The tourism ministry said it would issue a statement later in the day.

The police raid is certain to fuel opposition attempts to launch a formal congressional inquiry into recent corruption allegations involving the federal government. Such an inquiry would have far-reaching powers to investigate allegations.

Rousseff could benefit

Several ministers are expected to have to testify before congressional committees over corruption allegations in coming days, potentially further delaying Rousseff's legislative agenda. The president is also dealing with fresh corruption allegations involving the agriculture ministry.

Several bills awaiting approval in Congress could boost private investments, include a tax overhaul, framework mining legislation and a regulation of oil royalties.

Brazil has already come under fire at home and abroad for delays in infrastructure projects for the World Cup, including airports, roads and soccer stadiums being built or renovated in 12 host cities.

Rousseff enjoys considerable popular support - although well below the stratospheric ratings of her predecessor Luiz Inacio Lula da Silva - in part because of Brazil's resilient economy but also due to her image as a serious and competent manager.

If she is seen as embracing investigations and carrying out her campaign pledge for clean government, she may not suffer from the latest scandals and could even benefit, some analysts said.

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