Brazil’s Ex-Minister Mantega Temporarily Arrested in Probe

(Bloomberg) -- Brazil’s former Finance Minister Guido Mantega was released few hours after being arrested on Thursday in connection to the so-called Carwash corruption probe that has shaken the nation’s business and political elite. 

Judge Sergio Moro repealed the temporary arrest warrant issued against Mantega on the basis that there was no risk he would interfere with the gathering of evidence if released.

Mantega, Brazil’s longest-serving finance minister, was arrested based on testimony and banking documents from Brazilian former billionaire Eike Batista, federal prosecutor Fernando dos Santos Lima told journalists. Mantega had requested a payment of 5 million reais, worth $2.35 million at the time, to a political marketing company linked to the ruling Workers’ Party, Lima said, citing Batista’s testimony. Mantega was chairman of Petrobras then and the alleged bribing would have been asked in exchange for contracts the state-run oil company awarded to Batista a few weeks later, Lima said.

“These coincidences called our attention,” the prosecutor said.

Batista signed money transfers to a Swiss account but said that they were legal campaign donations, and not bribes in exchange for contracts, according to court documents.

The arrest shows police are not shying away from targeting high-profile figures from the Workers’ Party in the run-up to nationwide municipal elections in October. Former president Luiz Inacio Lula da Silva, the party’s main leader, is also facing criminal charges in the same Carwash probe. In a statement to the press, the Workers’ Party said the investigation has turned into a “political spectacle” aimed at hurting the party and preventing Lula from running for president in 2018.

Thursday’s raid also targeted executives from construction companies Mendes Junior Engenharia SA and OSX Construcao Naval SA that were involved in bidding for two offshore oil platforms for Petroleo Brasileiro SA, as the oil company is formally known, police and prosecutors said. Former OSX executive Luiz Eduardo Carneiro, currently the CEO of Sete Brasil, has also been arrested, according to the police.

Representatives for Mantega, Mendes Junior and OSX could not immediately be reached for comment when contacted by Bloomberg. Efforts to reach Eike Batista through his lawyer were unsuccessful. Sete Brasil declined to comment.

Mantega was Brazil’s finance minister from 2006 to the end of 2014 under former presidents Lula and Dilma Rousseff, both of the leftist Workers’ Party. He was arrested at a hospital in Sao Paulo, where his wife had undergone surgery. “Unfortunately, those coincidences happen,” Lima said. He added Mantega’s arrest had been authorized in August but didn’t happen before as federal agents were busy providing security for the Olympics.

Mantega oversaw the rise of Brazil’s economy driven by a commodity and consumer boom as well as the beginning of its decline. His critics blame him for abandoning fiscal discipline during the Rousseff administration.

--With assistance from Andressa Lelli Yasmine Batista Francisco Marcelino and Peter Millard To contact the reporters on this story: Sabrina Valle in Rio de Janeiro at svalle@bloomberg.net, Mario Sergio Lima in Brasilia Newsroom at mlima11@bloomberg.net. To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, Walter Brandimarte, Bruce Douglas