Brazil prosecutor won't investigate Dilma’s chief of staff

Brazil's federal prosecutor shelved an investigation into the finances of President Dilma Rousseff's chief of staff, saying there was no evidence of wrongdoing.

The decision was a boost to Antonio Palocci, one of Rousseff's main advisors, whose job had appeared at risk in recent days and who may still face a congressional inquiry.

Last month one of the country's leading newspapers reported that Palocci had increased his personal wealth 20-fold as a corporate consultant during his 2006-10 term as congressman.

Some opposition leaders say he engaged in illegal lobbying activities, an accusation Palocci denies. The three-week scandal rocked the ruling government coalition and has risked stalling its legislative agenda in Congress.

Roberto Gurgel, the federal prosecutor-general said he would not investigate the case because there was no evidence that Palocci engaged in illegal activities or in trafficking influence.

"The accusation at hand and the media reports don't contain a single fact that would justify breaking the privacy of the (accused), his company or his clients," Gurgel wrote in his decision, published on the website of the public prosecutor's office.

Palocci hopes the ruling will help him emerge from weeks on the defensive.

"I hope this decision puts the political battle back in the realm of reason," he said in a statement. Opposition parties are still trying to launch a congressional inquiry into how Palocci acquired his personal wealth and many legislators want him to testify in Congress.

Rousseff, who won high approval ratings earlier this year with her image of quiet diligence and efficiency, has in recent weeks been struggling to regain a positive agenda amid almost daily headlines on the scandal.