Brazil's top court clears way for Petrobras inquiry in Congress
BRASILIA, April 24 (Reuters) - Brazil's Supreme Court upheld late on Wednesday an opposition request for a congressional inquiry into alleged corruption at state-run oil company Petroleo Brasileiro SA, a ruling that could upset President Dilma Rousseff's re-election plans.
The investigation into the country's biggest company, known as Petrobras, will scrutinize its controversial purchase of a refinery in Texas at a time when Rousseff chaired the board of the oil giant.
Congress will also look into allegations that Petrobras officials took bribes from SBM Offshore, a Dutch supplier of offshore oil vessels, and a money laundering scam that has led to the arrest of a former Petrobras director.
These cases are already being probed by regulatory agencies and federal police, but a Congressional inquiry will add fuel to a growing political scandal surrounding the oil company, which can only help Rousseff's opponents in an election year.
Rousseff is already under attack for the financial decline of Petrobras on her watch. Once seen as the star at the center of Brazil's rise to become a major oil exporter, Petrobras is today the world's most indebted oil company and lost half of its market value in Rousseff's three years in office.
Any revelations of corruption at Petrobras would damage Rousseff's reputation as a competent manager with zero tolerance for unethical behavior in her administration, undermining approval ratings that are already slipping in opinion polls.
At present, Rousseff is still favored to win a second term in the October 5 elections, but political scandal would force a much tighter race with an uncertain outcome.
Rousseff's supporters in Congress sought to dilute the inquiry by requesting a wider investigation that would also look into alleged corruption in states governed by her opponents, resulting in a dispute that went to the Supreme Court, which upheld the original inquiry.