UPDATE 5-Brazil police arrest Lula minister in bribery scandal
(Adds comment from Dirceu's lawyer, Supreme Court transfer)
By Sergio Spagnuolo
CURITIBA, Brazil Aug 3 (Reuters) - Brazilian police on Monday arrested former government minister Jose Dirceu, one of the most senior members of the ruling Workers' Party to be detained so far in a corruption scandal engulfing state-run oil company Petrobras.
Dirceu, popular former President Luiz Inacio Lula da Silva's chief of staff between 2003 and 2005, was already under house arrest for running a vote-buying scheme. His involvement in an even larger scandal threatens to bring the investigation closer to Lula and his protégé and successor President Dilma Rousseff.
Federal prosecutor Carlos Fernando dos Santos Lima called Dirceu a key instigator of the Petrobras scandal, saying he took bribes from contractors while in office and continued to receive payments even when he was jailed in late 2013 for the vote-buying scandal in Lula's first term.
Lima said neither Lula nor Rousseff are currently targets of the widening probe but added during a news conference: "No one is exempt from investigation."
Police served seven other arrest warrants, including one for Dirceu's brother, and 26 search-and-seizure warrants in the latest phase of a graft investigation that has undermined Rousseff's popularity and led to calls for her impeachment.
Workers' Party Treasurer Joao Vaccari was arrested in April and stepped down to focus on his defense.
At least one government witness has said Rousseff's 2014 re-election campaign was financed in part with money originating from a scheme to siphon funds from overpriced engineering and construction contracts with Petrobras, or Petroleo Brasileiro SA, to pay bribes to company executives and politicians. Continuación...