UPDATE 4-Two Brazilian executives arrested as Petrobras probe hits utility
(Adds Eletrobras comment, paragraphs 9, 10)
By Sergio Spagnuolo
CURITIBA, Brazil, July 28 (Reuters) - Brazilian police on Tuesday arrested two executives involved in building a nuclear power plant for Eletrobras, pulling the state-run utility into a corruption scandal that has engulfed government-owned oil company Petrobras.
The arrests come as federal police follow allegations that a price-fixing, bribery and political kickback scheme they discovered at Petrobras extends to other state-led companies, including Eletrobras, Brazil's largest utility.
"Unfortunately, it looks like we will go into other sectors as well, and the energy sector alone is already huge," federal police agent Igor Romario de Paulo said in a press conference.
The broadening investigation could worsen an economic slowdown if more infrastructure projects are put on hold. Companies implicated so far have been barred from tenders with Petrobras, contributing to job losses and Brazil's descent into what is expected to be the worst recession in 25 years.
The "Operation Radioactivity," which police disclosed on Tuesday, focused on Eletrobras' Eletronuclear division, which is building a third nuclear-power reactor at Angra dos Reis, about 100 kilometers (62 miles) west of Rio de Janeiro.
Police detained Othon Luiz Pinheiro da Silva, who is on leave as Eletronuclear's chief executive officer. Federal prosecutor Athayde Ribeiro Costa said da Silva received 4.5 million reais ($1.2 million) in bribes from engineering firms Andrade Gutierrez and Engevix.
Ribeiro Costa also told journalists that police also had arrested Flavio Barra, Andrade Gutierrez's top energy executive, on Tuesday. Continuación...