BRASILIA, (Reuters) – Fresh reports of alleged fraud and embezzlement by Brazil Senate chief Jose Sarney in Brazil’s weekend press are fueling an ongoing Senate ethics scandal and have renewed pressure for Sarney to resign.
The political survival of Sarney, a veteran politician and key ally of President Luiz Inacio Lula da Silva, has been in doubt for weeks following media allegations of unethical behavior and personal enrichment. Police are investigating.
The scandal has exposed tensions in the ruling coalition that threaten to hold up the government’s legislative agenda and hamper Lula’s plans for his chosen successor in October 2010 elections.
The leading news magazine Veja reported at the weekend that Sarney had failed to report to tax authorities a foreign account he held with Banco Santos, a Brazilian bank that went bankrupt in 2004. Sarney withdrew 2.2 million reais ($1.1 million) from Banco Santos one day before authorities intervened in the bank, Veja said, citing central bank documents used in police investigations.
Sarney and the former owner of the bank denied knowledge of the alleged account abroad, Veja said. The senator said public prosecutors could investigate the charges freely.
In a separate report yesterday, O Estado de Sao Paulo gave details of allegations that Sarney and his family pocketed sponsorship money given by the state-run oil company Petrobras to a cultural foundation carrying his name. The report said 500,000 reais ($250,000) ended up in companies owned by Sarney or friends and family.
The head of the Jose Sarney Foundation said it could account for all its expenses and that the allegations by O Estado de Sao Paulo were slanderous.
Lula relies on Sarney’s centrist PMDB party, which is the largest in both houses of Congress, to approve legislative proposals and to back his preferred candidate, chief of staff Dilma Rousseff, in 2010 presidential elections.
Opposition legislators now want to charge Sarney before the Senate ethics committee with nepotism and wrongdoing related to a secret spending and hiring scheme in the Senate that benefited legislators, staff and their families with perks and pay.
To avoid a high-profile hearing and scrutiny by the media Sarney could step down, analysts said.
He previously admitted receiving housing benefits he did not need and failing to declare ownership of a mansion to electoral officials.
Nearly two years ago Renan Calheiros, also of the PMDB party, was forced to resign as Senate chief, also over corruption allegations.
