Former head of Petrobras testifies in Brazilian Congress on corruption engulfing oil company

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SAO PAULO — The former head of Brazil's state-run oil giant Petrobras, told a parliamentary investigative committee Thursday that she and other executives were taken by surprise by the 2014 probe that has revealed a kickback scheme believed to be the largest uncovered in the country's history.

"I never knew of any bribes at Petrobras," Maria das Gracas Foster told the committee investigating the scandal, which is alleged to have involved at least $800 million in inflated contracts and bribery payments.

Prosecutors allege the nation's biggest construction and oil firms paid former Petrobras officials and politicians in exchange for overvalued contracts. Money allegedly was funneled back to the campaign coffers of the ruling Workers' Party and its allies.

Foster said the investigation prompted Petrobras to stop awarding contracts to companies suspected of involvement. She and five executive directors resigned in February.

Results of the committee investigation may be sent to the Supreme Court, which could decide to whether to pursue legal action.

Earlier this month, the committee questioned Sergio Gabrielli, a former Petrobras CEO who resigned in 2012 to take a government position in the state of Bahia.

Foster also was questioned Thursday about Petrobras' 2006 decision to purchase the Pasadena Refining System, a Texas refinery. A dispute with co-owner Astra Oil of Belgium eventually forced Petrobras to pay $1.18 billion for the installation that in 2005 cost Astra $42.5 million.

In retrospect, she said, the purchase was not "a good business deal."

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