Thursday, December 8, 2011

Brazil scandal wave now threatens trade minister

Brazil's trade and industry minister faced pressure today to explain his personal wealth, becoming the latest and one of the most high-profile members of President Dilma Rousseff's cabinet to be targeted by the media over alleged ethics breaches.

Six members of Rousseff's cabinet have quit over corruption allegations since she took office in January - the latest was her labor minister who stepped down on Sunday.

A serious scandal involving Trade and Industry Minister Fernando Pimentel, a member of the president's own Workers' Party, could be damaging for Rousseff.

A close confidant and long-time personal friend of Rousseff, Pimentel is the most influential minister to face an ethics storm since her chief of staff Antonio Palocci was forced out of his post in June.

Unlike some of the recent casualties in less important ministries, Pimentel is a crucial player in Rousseff's economic team, which is scrambling to revive growth that stalled in the third quarter as Brazil felt the effects of Europe's debt crisis.

Leading newspapers have reported that Pimentel earned more than $1.1 million in consultancy fees over two years after he stepped down as mayor of the city of Belo Horizonte and before joining Rousseff's government in January. Pimentel has denied any wrongdoing but acknowledged that Rousseff has asked him for explanations.

Newspaper O Globo reported that his consulting firm, P-21 Consultoria, was linked to a current aide to the Belo Horizonte mayor. Other newspapers have reported that his firm worked with a construction company that later was awarded a contract with the Belo Horizonte municipality.

The opposition PSDB party called yesterday for the public prosecutors' office to open an investigation into Pimentel's business dealings.