Scandal Charges Divert Attention From Brazil's Econ Crisis
Dow Jones Newswires
BRASILIA (AP)--Allegations that Brazilian President Fernando Henrique
Cardoso and several close political allies have an overseas multi-million
dollar account are diverting attention away from his attempt to revive South
America's largest economy.
Over the weekend documents surfaced allegedly showing Cardoso, Sao
Paulo Gov. Mario Covas and Health Minister Jose Serra with a $368
million secret Cayman Islands company account.
Late Wednesday, the scandal rumors caused the Sao Paulo stock
exchange to tumble nearly 3%.
"This is a motive for profit taking," said one stock trader. "Foreign
investigators took advantage of these rumors to fill their pockets."
In Rio, Minister Serra said the documents were falsified by right-wing
opposition politicians and the government ordered the Justice Ministry to
find the culprits. "Whoever did it committed a very serious crime," he said.
Yet some legislators are asking for a full congressional probe.
"These documents must be investigated," Congresswoman Marta Suplicy
told reporters Wednesday. "Nobody is above suspicion."
The allegations against Cardoso occurred soon after he introduced drastic
belt-tightening measures to qualify Brazil for an International Monetary
Fund rescue package, expected to be announced over the next few days.
The government is confronting an enormous budget deficit, recession and
record unemployment.
Moreover, it was revealed that 27 private conversations were secretly
recorded between Cardoso, Luiz Carlos Mendonca de Barros, the
communications minister, and Andre Lara Resende, the president of the
state-run National Economic and Social Development Bank. Its contents
haven't been publicly revealed and the tapes's authors haven't been
identified.
According to members of the opposition Workers Party (PT), Paulo
Maluf, a conservative politician who recently lost the Sao Paulo
gubernatorial race to Covas, offered the documents implicating Cardoso to
PT leaders before last month's general election. The PT, however, turned
them down since they were photocopies.
On Wednesday, Maluf denied the charges saying "I have never seen them
(the documents) or know anything about it." |
