August 20, 2015 / 8:40 PM / 4 years ago

REFILE-UPDATE 1-Brazil's lower house speaker Cunha charged in corruption probe

(Refiles to correct spelling of Fernando Collor de Mello’s name in paragraph five)

By Maria Carolina Marcello

BRASILIA, Aug 20 (Reuters) - Brazilian federal prosecutors charged the speaker of the lower house of Congress, Eduardo Cunha, with corruption and money laundering on Thursday in a widening political kickback scandal linked to contracts with state-run oil company Petrobras, the prosecutor’s office said.

Cunha, the first sitting politician charged in Brazil’s largest-ever corruption scandal, was accused of taking a $5 million bribe on contracts for two drillships.

A member of Brazil’s largest party, known as the PMDB, Cunha quit President Dilma Rousseff’s coalition last month to join opposition lawmakers seeking her impeachment. The corruption charges will weaken Cunha’s offensive against the president.

The country’s top prosecutor filed the charges against Cunha at the Supreme Court, where he will face trial if he is indicted. Elected officials and cabinet ministers can only be tried by the highest court in Brazil.

The prosecutor’s office said it also laid charges against former President Fernando Collor de Mello, but it did not specify the charges. Collor’s name had been on the Supreme Court’s list of people under investigation in the Petrobras scandal.

Collor was president from 1990 to 1992, when he resigned hours before his certain impeachment on corruption charges in an influence-peddling scandal. He has been a senator for his state of Alagoas since 2007.

If convicted, Congress must decide whether to strip Cunha of his political rights and remove him as speaker.

The corruption scandal centers on oil company Petroleo Brasileiro SA, as Petrobras is formally known. A defendant in the case, consultant Julio Camargo, said in plea bargain testimony that he paid Cunha the $5 million bribe.

Cunha has denied the accusation and accuses Rousseff’s government of framing him. Three dozen sitting lawmakers are under investigation in connection with allegations they received bribe money paid by engineering firms to obtain contracts with Petrobras, the country’s largest company.

Camargo and Nestor Cervero, a former international director at Petrobras, have been convicted of organizing bribes from South Korean shipbuilder Samsung Heavy Industries Co in exchange for contracts to build two drillships, the Petrobras 10000, which was ordered by Petrobras and Mitsui & Co in 2006, and the Vitoria 10000, ordered by Petrobras in 2007. (Writing by Anthony Boadle and Caroline Stauffer; Editing by Peter Galloway)

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