Brazil’s supreme court will investigate 54 elected officials in connection with a corruption scandal unfolding at Brazil’s state-owned oil giant, Petrobras.
I would be concerned that the fact that this has happened at Petrobras would make people worry about other corporations where there is still significant government ownership and involvement.
Most prominent among those are Eduardo Cunha, speaker of the Chamber of Deputies, and Senate president Renan Calheiros.
Unlike a previous corruption scandal in 2005, the Petrobras affair could threaten the country’s economic credibility and credit rating.
“It raises questions about Brazilian corporate governance that the first scandal didn’t,” says Merritt B.Fox, Law Professor at Columbia University, New York. “I would be concerned that the fact that this has happened at Petrobras would make people worry about other corporations where there is still significant government ownership and involvement.”
The scandal also threatens to reach to the very top of Brazilian politics as President Dilma Rousseff spent seven years leading the company’s board of directors when much of the alleged corruption took place.
All but one of the politicians under investigation are from Rousseff’s governing coalition. A former Petrobras manager is also expected to testify that Rousseff’s Workers’ Party received some $200 million in kickbacks from Petrobras contracts.
Rousseff denies knowing about the scheme and has vowed to respect the judiciary’s independence.