Government officials in Brazil named in Petrobas graft investigation

RIO DE JANEIRO—Brazil’s top appeals court approved a request from federal prosecutors to open an investigation into the former and current governor of Rio de Janeiro state in connection to a kickback scheme at state-run oil company Petrobras.

The court said in a statement on its website that it approved the investigation against Rio state Gov. Luiz Pezao and former Gov. Sergio Cabral. Also to be investigated is Gov. Tiao Viana of Acre state in the Amazon region.

Under Brazilian law, anyone serving as a governor at the time of an alleged crime must have their investigation and any future trial approved by judged by the top appeals court.

Last week, prosecutors were given approval to investigate dozens of federal congressmen and some former top executive branch officials in connection to the Petrobras case. Court approval also is needed to investigate lawmakers and top government officials.

Prosecutors say they have uncovered the biggest corruption scheme yet discovered in Brazil, which involved at least $800 million in bribes and other funds allegedly paid by top construction and engineering firms in return for inflated Petrobras contracts.

The scheme apparently began in 1997, but allegedly became widespread in 2003 after the Workers’ Party won power. The party and its coalition members allegedly saw some of the bribes funneled back into their campaign coffers.

A former executive at Petrobras, Paulo Roberto Costa, has told investigators that Cabral and Pezao, who served as Cabral’s vice governor, received about $9.5 million in kickbacks for their 2010 campaign coffers in relation to the construction of a Petrobras petrochemical complex in Rio state.

Costa also accuses Viana of taking some $95,000 in kickbacks for his campaign to the senate in 2010.

All officials have denied any wrongdoing.