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Brazil official arrested in tourism graft sweep

Source: Thomson Reuters Foundation - Tue, 9 Aug 2011 22:27 GMT
Author: Reuters
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* Deputy tourism minister among 33 people arrested

* Latest in series of scandals could fuel Congress inquiry

* Could raise further questions over World Cup preparation (Updates number of arrests, adds details)

By Raymond Colitt

BRASILIA, Aug 9 (Reuters) - Police arrested Brazil&${esc.hash}39;s deputy tourism minister on Tuesday in a corruption sweep tied to funding for major sports events, the latest in a series of scandals to tarnish President Dilma Rousseff&${esc.hash}39;s government.

Deputy minister Frederico Costa was among 33 tourism ministry officials and entrepreneurs arrested in the operation, federal police said.

Tourism Minister Pedro Novais Lima was called to the presidential palace to give explanations but will remain in office for now, a palace source said on condition of anonymity.

Rousseff has lost three cabinet ministers since May to graft allegations and ethics scandals, including her chief of staff.

Lima is a member of the PMDB, Rousseff&${esc.hash}39;s main coalition partner, which has been at odds with her since virtually the start of her presidency on Jan. 1 and has partly blocked her agenda in Congress.

The police believes millions of reais (dollars) in public funds earmarked for professional training have been embezzled. It will charge those arrested with fraud, embezzlement and identity theft.

The Brazilian government is funding schools throughout the country to train taxi drivers, waiters and hotel staff as the country prepares to host the 2014 World Cup and the 2016 Olympics in Rio de Janeiro.

CONGRESSIONAL PROBE

The police raid is certain to fuel opposition attempts to launch a formal congressional inquiry into recent corruption allegations involving the federal government. Such an inquiry would have far-reaching investigative powers.

Several ministers are expected to have to testify before congressional committees over corruption allegations in coming days, potentially further delaying Rousseff&${esc.hash}39;s legislative agenda. The president is also dealing with fresh corruption allegations involving the agriculture ministry.

Several bills awaiting approval in Congress could boost private investments, include a tax overhaul, framework mining legislation and a regulation of oil royalties.

Brazil has already come under fire at home and abroad for delays in infrastructure projects for the World Cup, including airports, roads and soccer stadiums being built or renovated in 12 host cities.

Rousseff enjoys considerable popular support -- although well below the stratospheric ratings of her predecessor Luiz Inacio Lula da Silva -- in part because of Brazil&${esc.hash}39;s resilient economy but also due to her image as a serious and competent manager.

If she is seen as embracing investigations and carrying out her campaign pledge for clean government, she may not suffer from the latest scandals and could even benefit, some analysts said. (Editing by Stuart Grudgings and Anthony Boadle)

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