Brazil ruling party treasurer named in scandal

SAO PAULO (Reuters) – The treasurer of Brazil’s  ruling Workers’ Party defrauded investors in 2005 while  director of a real estate cooperative to illegally finance  party campaigns, a newsmagazine reported yesterday, citing  unnamed officials in a state run by an opposition party.

If the scandal gains traction in the media, it could derail  the plans of PT Treasurer Joao Vaccari to oversee the campaign  financing of President Luiz Inacio Lula da Silva’s planned  successor, Chief of Staff Dilma Rousseff, in October  elections.

Lula, completing his second term, is ineligible to run in  2010.

The report in Veja, Brazil’s largest-circulation  newsmagazine, said the public ministry of Sao Paulo had opened  an investigation into whether Vaccari defrauded investors out  of at least 31 million reais ($17 million) when he was director  of the Bancoop real estate cooperative and channeled the funds  into the off-the-books campaign coffers of PT party members.

The report, which was widely carried by other media, did  not provide any named sources.

Reports of corruption scandals often break before important  elections in Brazil, with serious political consequences. In  2001, newspapers ran front-page photos of stacks of illegal  campaign cash that ended the early presidential run of Roseane  Sarney, daughter of former President Jose Sarney.