UPDATE 3-Brazil police arrest former Planning Minister Bernardo
(Adds comments from prosecutor, details, changes dateline)
SAO PAULO, June 23 (Reuters) - Brazil police on Thursday arrested former Minister Paulo Bernardo and raided Workers Party offices in a spinoff of a massive corruption probe targeting the country's main parties and some of its most powerful executives.
Investigators said Bernardo, who was planning minister and communications minister during Workers Party administrations from 2005 to 2014, received more than 7 million reais ($2.08 million) in kickbacks. The Workers Party also benefited from the scheme, police said at a news conference.
Police searched 40 places in five different states and sought to arrest 10 other people with Thursday's operation, dubbed "Brazil Cost," an outgrowth of the two-year "Operation Car Wash" probe centered around kickbacks via state-run oil producer Petroleo Brasileiro SA.
The alleged kickbacks to those arrested stemmed from an overcharged contract for technical assistance at the Planning Ministry, investigators said. The suspects face charges including corruption, money laundering and criminal association.
Operation Brazil Cost came out of Sao Paulo instead of Curitiba, where most of the recent anti-graft crusade has originated under the jurisdiction of federal Judge Sergio Moro. The move to a different state showed the fight spreading as police and prosecutors learn from Curitiba's successful methods, investigators said.
"Today it was proven that investigations will continue no matter where they are," prosecutor Andrey Mendonça said.
The raids included the house of Senator Gleisi Hoffmann, Bernardo's wife and another longtime senior official from the Workers Party. Police also detained former Social Security Minister Carlos Gabas for questioning.
Bernardo and Hoffmann were indicted in March on charges of corruption for their suspected involvement in an illegal campaign finance scheme. They have denied any wrongdoing.
Because of Operation Car Wash, some of Brazil's most powerful executives and politicians face charges or are in jail for taking kickbacks in public works and funneling part of the money to fund campaigns.
($1 = 3.3636 Brazilian reais) (Reporting by Eduardo Simões; Writing by Silvio Cascione; Editing by Lisa Von Ahn)
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