Brazil prosecutors charge Lula friend with loan fraud
SAO PAULO Dec 14 (Reuters) - Brazilian prosecutors on Monday charged Jose Carlos Bumlai, a friend of former President Luiz Inacio Lula da Silva, with taking out a fraudulent loan from Schahin bank that they allege benefited the ruling Workers' Party.
The engineering branch of the Grupo Schahin, Schahin Engenharia, was awarded a contract to operate a drillship for state-run oil firm Petrobras in exchange for the bank canceling Bumlai's loan repayments, prosecutors said.
In a statement, prosecutors said Bumlai sought the help of Lula to finalize the Schahin contract on the Vitoria 10,000 drillship, potentially bringing Brazil's largest-ever corruption case closer to the former leader.
"Jose Carlos Bumlai was an operator for a political party, an operator for the Workers' Party," lead prosecutor Deltan Dallagnol told a televised news conference.
The Nov. 25 arrest of Bumlai, a powerful rancher who also controlled a sugar mill, also brought the case to Brazil's farm sector.
Dallagnol said loans from Brazil's state-run development bank BNDES to Bumlai's companies that were mentioned in the arrest order were being investigated and prosecutors were concentrating on the Petrobras connection.
The investigation is focused on the years 2006 to 2009.
Lula and his successor, President Dilma Rousseff, have denied participating in acts of corruption involving Petroleo Brasileiro SA, or Petrobras.
Bumlai's lawyer said in an email on Monday it was not normal for his client to be formally charged before he had the chance to tell his side of the story. Continuación...