RIO DE JANEIRO (Reuters) – Brazilian police arrested the governor of an Amazon state and 17 other people yesterday on suspicion of running a scheme that siphoned off more than 300 million reais ($175 million) in public funds.
Hundreds of police surrounded the governor’s palace in the remote northern border state, according to media reports, and a source in the government confirmed to Reuters that Governor Pedro Paulo Dias de Carvalho was among those arrested.
Carvalho is a member of the conservative Progressive Party, which has no formal alliance with either of the main presidential candidates, and had been running to retain his office in the October 3 national election.
The arrests in the operation called “Clean Hands” were made in the states of Para, Paraiba and in the financial capital Sao Paulo as well as in Amapa, the Federal Police said in a statement. About 600 police and 30 tax officials took part in the swoop.
The police statement said investigations had uncovered widespread and systematic embezzlement of public funds in the state to select private companies, part of which was then kicked back to public officials. “The group fixed auctions, paid for services that weren’t provided and used public resources as if they were theirs,” Brazil’s national tax office said in a separate statement.
Neither statement identified those who had been arrested.
Corruption has been a high-profile issue in the election campaign after the national Congress passed a bill known as the “Clean Record” law aimed at preventing candidates with criminal charges against them from running for office.
The ruling coalition’s Dilma Rousseff holds a lead of more than 20 points in opinion polls over opposition rival Jose Serra, putting her on course for an outright victory in the first round of presidential voting in three weeks’ time.
All seats in the lower house of Congress, all state governorships, and over half of the Senate seats are also up for grabs in the election.
