UPDATE 3-Brazilian police arrest two as corruption probe turns to major builder
(Updates with prosecutor comments and details of latest probe)
By Alonso Soto and Sergio Spagnuolo
BRASILIA/CURITIBA, Brazil Aug 2 (Reuters) - Brazil's federal police said they had arrested two people and raided properties on Tuesday over alleged corruption at building firm Queiroz Galvao, widening a sweeping investigation focused on state-run oil company Petroleo Brasileiro SA.
"Operation Carwash" was launched two years ago to tackle price fixing, bribery and political kickbacks at Petrobras , as the company is commonly known. It has led to dozens of convictions for bribery and money-laundering, and several top politicians are being investigated.
Former Galvao Queiroz senior executive Ildefonso Colares Filho and current employee Othon Zanoide de Moraes were arrested, authorities said in a press briefing in the southern city of Curitiba. Police were also carrying out an arrest warrant against a third unidentified person.
Queiroz Galvao's press office said it was going to issue a statement responding to the accusations later on Tuesday.
The charges all fall under the types of crime encompassed by "Carwash" probe, including illegal campaign donations, obstruction of justice and corruption, federal prosecutor Carlos Fernando Lima told reporters.
The investigation is hunting for additional evidence that Queiroz Galvao participated in a cartel that systematically paid bribes to win over contracts with Petrobras, prosecutors said.
They said evidence already in hand showed Queiroz Galvao paid nearly 10 million reais ($3.07 million) in bribes to Petrobras executives to gain an upper hand in the public auction of projects. Continuación...