In the latest shock development in Brazil’s offensive against corruption, federal police have formally accused the president of the country’s second biggest private bank of conspiring to defraud the state of hundreds of millions of euro in tax revenue.
The revelation that a file on Banco Bradesco president Luiz Carlos Trabuco and two other senior executives had been lodged with the chief federal prosecutor is another indication that investigators are determined to tackle corruption claims against the country's political and business elite that for decades enjoyed near blanket impunity.
Mr Trabuco is accused of conspiring with officials in the finance ministry to annul a €750 million tax fine. The police file includes a report of a meeting it monitored at Bradesco's headquarters in greater São Paulo in which Mr Trabuco took part in a discussion allegedly about how to free the bank of the fine.
Bradesco denied that its executives had done anything wrong and said they would fight the charges. The news that one of Brazil’s most influential businessmen, with excellent political contacts at the highest levels of government, could face prosecution sent shockwaves through markets which quickly wiped billions off Bradesco’s share price.
Nervousness
The latest revelations come at a time of growing nervousness among the country’s elite at the anti-corruption activities of prosecutors. The separate investigation into corruption at state oil giant
Petrobras
that has already implicated senior politicians and seen dozens of executives from Brazil’s major construction companies jailed.
The investigation into Bradesco is part of a broader probe nicknamed Operation Zealots into the activities of the finance ministry’s tax appeal board, known as CARF. Investigators say they have uncovered evidence that many of Brazil’s leading companies paid bribes to CARF officials in order to reduce or eliminate fines. Up to 70 companies, including some of the biggest names in Brazilian business, are believed to be under investigation.
Investigators say the scheme may have cost the state tax revenue of about € 5 billion between 2003 and 2013. Among others caught up in the inquiry in the Gerdau family that owns one of Brazil's largest steelmakers and Joseph Safra, the billionaire banker, who according to Forbes is the country's second richest person.
Though politicians oversaw the appointment of officials to CARF it is not yet clear if they benefited from the scheme. In a separate branch of the inquiry, investigators are examining whether former president Luiz Inácio Lula da Silva granted benefits to car makers in return for millions in suspicious payments paid by lobbyists to a company controlled by his youngest son.
