RIO DE JANEIRO — Brazilian police on Tuesday arrested a businessman with close ties to former President Luiz Inacio Lula da Silva on suspicion of fraud in a bid for a drill ship contract with state-owned oil company Petrobras.
Federal police agents arrested businessman and rancher Jose Carlos Bumlai in Brasilia.
Police say that Bumlai, who had near-free access to Silva from 2003 to 2010, is suspected of lobbying for Sete Brasil, a company that rented drill ships, and of having accepted $2 million for his services.
A federal police statement said Bumlai and others used "complex financial engineering measures to hide the real destination of his services."
Silva has not been accused of wrongdoing in the case.
In his order for Bumlai's arrest, Judge Sergio Moro said that the ruling Worker's Party also took advantage of the businessman's alleged fraud scheme.
Moro cited evidence that Bumlai used his connections to Silva to land the Petrobras drill ship contract for Brazil's Schahin industrial group in return for forgiving some $16 million in loans to the Workers' Party to help fund Silva's 2006 re-election campaign. The party has denied any wrongdoing.
Moro heads the investigation into a corruption scandal engulfing Petrobras.
Prosecutors allege that over $2 billion was paid in bribes by businessmen to obtain Petrobras contracts, projects that then subsequently ballooned in costs. Investigators also have said that some of the money made its way to the Workers' Party.