POLITICS : Brazil, Still Reeling From Corruption Scandal, Is Hit Again

Another megascandal is rocking Brazil.

Last year, a congressional investigation of corruption under President Fernando Collor de Mello led to his impeachment and removal from office. Now, some of the same congressmen who helped bring Collor down are implicated in accusations of massive graft in the congressional Budget Committee.

The new scandal, like last year’s, is seen as a test for Brazil’s fragile democratic system, beset by almost constant economic and political crises since 21 years of military rule ended in 1985.

So far, the budget scandal has followed a pattern remarkably similar to the Collor scandal.

Collor’s brother, Pedro, lit the fuse last year by accusing the president of profiting from a multimillion-dollar network of influence-peddling and graft. The current scandal, centering on the joint Budget Committee of Congress, exploded as a result of accusations by Jose Carlos dos Santos, a former staff aide to the committee.

Both Pedro Collor and Dos Santos dropped their bombshells in interviews with the newsmagazine Veja. Then, under media and public pressure, the Congress formed special committees to investigate the accusations in both cases.

In Dos Santos’ interview with Veja, published Sunday, he said members of the Budget Committee had received kickbacks and bribes since 1989 for allocations to benefit construction companies, nonprofit charities and municipal governments.

The congressional investigative committee, chaired by veteran Sen. Jarbas Passarinho, was formed Wednesday and began its work with eight hours of testimony by Dos Santos. When the session ended at 5 a.m. Thursday, Dos Santos had implicated 24 congressmen, seven current and former Cabinet ministers and three state governors. He also said he believed that most Brazilian construction companies were involved in the corruption.

Dos Santos, 52, began talking after his arrest on suspicion of murdering his wife and hiding the body. He was brought from jail to the Congress in Brasilia on Wednesday under heavy security.

But police now say his wife, missing since November, may have been killed to keep her from revealing corruption in the Budget Committee. Dos Santos says she was kidnaped.

Police have confiscated $300,000 that Dos Santos produced for payment of a “ransom” that was never collected. Investigators found almost $2 million more in Dos Santos’ home and his Brasilia bank vault; this week he confessed to holding $470,000 more in foreign bank accounts.

According to Dos Santos, this was “hush money” he received from Congressman Joao Alves, 73, former secretary of the Budget Committee. Dos Santos has accused Alves of heading the alleged budget corruption scheme.

In testimony before the congressional investigative committee Friday, Alves denied any wrongdoing.

Alves’ testimony, like part of Dos Santos’, was transmitted live on national television. The investigation is expected to last months, and some congressmen predict that it will end with expulsions from both houses.

“It is snowballing, and there will have to be a purge of the Congress,” Congressman Zaire Resende told Brazilian reporters. Federal police have also begun a criminal investigation of the budget process.

Dos Santos said two current ministers in President Itamar Franco’s Cabinet have participated in corrupt budgeting practices. He asserted that graft had been paid to Henrique Hargreaves, chief civilian minister and a close associate of Franco, and Alexandre Costa, minister of regional integration, who was deputy secretary of the Budget Committee in 1991.

Both ministers have denied any involvement, but the accusations have added to the problems of Franco’s administration. The scandal is also expected to influence presidential and congressional elections next October.