Petrobras scandal 'hits nerve' in Brazil election campaign

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Monday, September 8, 2014

A fresh bribery scandal involving Brazilian state-run energy firm Petrobras is set to further erode the popularity of President Dilma Rousseff ahead of next month's election, an analyst told BNamericas.

Former Petrobras director Paulo Roberto Costa, arrested in March for alleged money laundering, on Saturday claimed dozens of politicians were involved in a cash-for-votes scheme from 2004 to 2012.

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The accusations came as a new poll showed Marina Silva, of the center-left PSB party, would beat Rousseff in a second round of voting.

Rousseff has seen her popularity slide in recent months amid stagnant economic growth, high inflation and a series of corruption scandals.

Meanwhile Silva's support has surged after she became the PSB's official candidate following the death of ally Eduardo Campos in a plane crash last month.

According to Brazilian political consultancy association Abcop, the latest claims could be the biggest blow yet to Rousseff's campaign.

"Petrobras is much more than just an [oil] company for Brazilians," Abcop president Carlos Manhanelli said in a telephone interview.

"When you involve a patriotic symbol like Petrobras you hit a nerve with the electorate. Many Brazilians don't understand economics but they understand that Petrobras is ours. It isn't something that is rational. It's emotional. That can be very important in an election."

Those reportedly named by Costa include a minister from Rousseff's center-left PT party, three state governors, six senators, PT deputies and coalition allies.

They are accused of taking 3% of the value of Petrobras contracts in return for congressional votes from 2004 to 2012.

The list also includes the late Campos, who was governor of Pernambuco when Petrobras announced the construction of the state's US$17.3bn Abreu e Lima refinery.

"Marina is going to be tarnished somewhat because of the accusations leveled against Campos, but she won't be affected like the government," Manhanelli said.

The latest survey by data institute Ibope showed Rousseff remains favorite in the first round of voting, scheduled for October 5, with 35% of the projected vote.

But a poll published by IstoÉ magazine on Saturday showed Silva would attract 47.6% in a second round compared with Rousseff's 32.8%.

A runoff will be held on October 26 should no candidate capture more than 50% of the initial ballot.

BNamericas will host its second LatAm Oil & Gas Summit in Houston, Texas, on September 10-11. Click here to download the agenda.