São Paulo prosecutor probes former mayor, UTC Engenharia

Prosecutors in São Paulo state accuse Fernando Haddad (pictured), former mayor of the state capital and workers party member, of receiving illegal payments from the former president of local construction company UTC Engenharia.

The prosecutor said that Ricardo Pessoa, controller of UTC, was urged by Haddad's Workers' Party (PT) colleague and former treasurer João Vaccari Neto to pay a debt with printers who supplied campaign material in 2012, when Haddad was elected mayor. According to the petition, Haddad had full control of the interests of companies involved in major public works for São Paulo, enriching himself illicitly.

Haddad was São Paulo's mayor from 2013 to 2017 and is expected to play a key role in October's presidential election.

The Workers' Party insists that former president Luiz Inácio Lula da Silva remains its candidate, and analysts believe the PT will wait until the very end to go all-in with the lesser-known Haddad.

Lula is in jail and his candidature is expected to be blocked by the electoral court in coming weeks, as Haddad's presidential candidature will likely be confirmed, according to political analysts.

UTC, meanwhile, is deeply involved in the Lava Jato scandal and as a result has seen a drastic drop in its business.