Sports minister snared in new Brazil graft scandal

BRASILIA Tue Oct 18, 2011 1:56am IST

Brazil's Sports Minster Orlando Silva speaks to journalists in Sao Paulo, March 28, 2011. REUTERS/Nacho Doce/Files

Brazil's Sports Minster Orlando Silva speaks to journalists in Sao Paulo, March 28, 2011.

Credit: Reuters/Nacho Doce/Files

BRASILIA (Reuters)- Brazilian President Dilma Rousseff faces another corruption scandal in her cabinet over accusations the sports minister arranged for millions in kickbacks, raising questions about the country's credentials to host the World Cup and Olympics.

The accusations, made in the influential weekly magazine Veja over the weekend, are an untimely blow for Rousseff, as her administration appeared to be moving on from scandals that brought down five ministers in recent months.

The involvement of Sports Minister Orlando Silva is particularly sensitive for her government, which is struggling with a ballooning budget for the 2014 soccer World Cup and allegations of widespread padding of public works projects for the event. Brazil is also preparing to host the 2016 Olympic Games in Rio de Janeiro.

Silva, the government's point man for investment and infrastructure projects for the mega events, denied the accusations as "farcical" and rushed back from a visit to the Pan-American Games in Mexico to defend himself.

"The information published at the weekend simply is not true," he said in a news conference on Monday, adding that he would testify in Congress on Tuesday about the accusations.

Rousseff said she still backed Silva, the only cabinet member from Brazil's Communist Party, which is a part of the governing coalition.

"We not only assume the integrity of minister (Silva), but he also expressed extreme outrage over the accusations made against him," Rousseff told reporters in Pretoria, South Africa, the first stop on a week-long African trip.

But analysts said that support may erode quickly if the media digs up more concrete evidence against Silva.

The Veja report accused Silva of heading a scheme dating back to 2004 in which 20-percent kickbacks were charged on public contracts, including sports projects for needy children, and the proceeds directed to the Communist Party. The report estimated that more than 40 million reais ($22.8 million) was siphoned.

Veja cited a disgruntled former contractor arrested last year during a police investigation into the party's alleged illegal fund-raising scheme, which began during the 2003-2010 government of former President Luiz Inacio Lula da Silva.

Silva, who was deputy sports minister under Lula, once personally received cash in a paper carton in the garage of his ministry, a chauffeur told Veja.

Brazil is hoping to use the World Cup and Olympics to showcase its emergence as an economic power. But the construction of several stadiums, airport terminals and other event-related works are behind schedule and the departure of Silva could throw preparations into further disarray.

Rousseff has taken a tougher stance against corruption than her predecessor and mentor Lula, who often turned a blind eye to graft accusations to avoid risking political support.

Her defense of clean government has seemingly earned Rousseff some support, particularly among middle-class voters.

The 63-year-old career civil servant has bounced back in opinion polls.

(Editing by Stuart Grudgings and Paul Simao)

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