July 12, 2019 / 11:42 AM / 11 days ago

Senior aide to Brazil farm minister targeted by graft probe

SAO PAULO (Reuters) - A senior adviser to Brazilian Agriculture Minister Tereza Cristina Dias is being investigated over his management of a public contract five years ago, according to two people familiar with the matter and documents from an internal ministry probe seen by Reuters.

The Agriculture Ministry headquarters building is seen in Brasilia, Brazil July 12, 2019. REUTERS/Adriano Machado

According to the documents and the sources, who spoke on condition of anonymity, Special Adviser Francisco Basílio Freitas de Souza is under investigation for bid-rigging and misspending of public funds.

The confidential probe has triggered a criminal investigation, according to prosecutors. The probe comes as the ministry tries to turn the page on bribery scandals, with new President Jair Bolsonaro vowing zero tolerance for graft.

Souza, an official at government agriculture research agency Embrapa since 1976, was in charge of coordinating a project which involved awarding a contract in 2014 to an IT firm to revamp procedures for the quality control of agricultural goods at the ministry.

In October 2018, the ministry’s internal auditors opened a formal investigation into the winning IT firm’s contract and alerted police and prosecutors to the probe, the documents show.

In December 2018, Souza was let go from the project, the government’s official gazette said at the time, without giving a reason.

That same month, he joined the transition team for the incoming Bolsonaro government and a month later the president’s Chief of Staff Onyx Lorenzoni named him as special adviser to the minister.

Lorenzoni’s press office declined to say if he knew of the probe at the time of Souza’s appointment.

The Agriculture Ministry said in a statement sent to Reuters on Wednesday, “There is no legal impediment to a civil servant targeted in an administrative probe from taking a politically appointed role.”

It declined to make Dias or Souza available for comment and said it was cooperating with authorities investigating the contract, which involved more than one civil servant. It also declined to disclose details of the internal investigation, adding that the “reasonable” duration of such proceedings was 140 days.

Federal prosecutors had asked police to start an investigation into the awarding of the contract, a media representative for the prosecutors said, declining to provide details. Federal police did not respond to a request for comment.

Dias is aware of the ongoing investigation, according to the two people familiar with the matter. There is no indication that she is implicated in any wrongdoing.

Souza’s public agenda shows he is one of the minister’s busiest aides, joining her frequently on domestic and foreign trips, and representing the ministry in meetings with the World Bank and the Japan International Cooperation Agency.

MEATPACKER SCANDAL

The Agriculture Ministry is still recovering from a 2017 scandal that saw police present evidence of a bribery scheme in which officials helped meatpackers to cheat on sanitary inspections.

The scandal led major foreign markets to ban meat imports from Brazil.

In the internal probe involving Souza, which is not related to the inspections scandal, investigators found evidence he may have broken bidding rules when the government signed a contract without a competing bidder, overpaying by at least 4 million reais ($1.1 million), according to the ministry documents.

Magna Sistemas Consultoria SA, the IT firm that won the contract to bolster the Agriculture Ministry’s international oversight and foodstuff quality control protocols, has also worked for state oil firm Petroleo Brasileiro SA and other ministries.

Magna said in a statement it won the project legally and fulfilled all its obligations through the end of the contract last year. It said the ministry had not formally inquired about the bidding process until April 2019.

The firm said it did not have knowledge of any investigation ordered by the federal prosecutors.

The Agriculture Ministry headquarters building is seen in Brasilia, Brazil July 12, 2019. REUTERS/Adriano Machado

Last year, Souza was tapped to become vice president for agriculture at state lender Banco do Brasil SA, local media have reported. Newspaper Valor Economico reported in January that he lost out on the job after failing a background check.

Banco do Brasil said in a statement that its eligibility committee had not evaluated Souza. He declined to go ahead with the process after receiving paperwork for the background check, according to a person familiar with the matter.

($1 = 3.80 reais)

Reporting by Ana Mano; Additional reporting by Ricardo Brito in Brasília; Editing by Brad Haynes, Daniel Flynn, Steve Orlofsky and Rosalba O'Brien

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