Brazil Energy Minister Target of Corruption Probe

Police are investigating Brazil\'s energy minister for possible links to a kickback scheme in a new corruption scandal.

Police are investigating Brazil's energy minister for possible links to a kickback scheme in a new corruption scandal to hit the government, local media reported on Monday.

The probe is part of a crackdown in which police last week arrested almost 50 people, including a senior aide to Energy Minister Silas Rondeau, on charges of embezzling money from big public works projects.

The crackdown has forced President Luiz Inacio Lula da Silva and senior cabinet members to try to defend a four-year plan for about $250 billion of public and private investment in much needed infrastructure projects.

These include roads, railways, airports, as well as controversial hydroelectric plants in the Amazon region.

Rondeau commands a large budget, makes policy on Brazil's leading biofuels program, and sits on the board of state-controlled oil company Petrobras.

In a report leaked to newspapers, federal police said they suspected Rondeau may have received a 100,000 reais ($51,000) kickback from a construction company that won a government contract to bring electricity to poor households.

The newspapers cited unnamed sources. A police spokesman declined to confirm the reports but said: "Every investigation is always ongoing until it is judged in the courts."

A video aired on national television showed a company director delivering an envelope to Rondeau aide Ivo Almeida Costa in the minister's offices. Costa was sacked last week and a ministry spokesman said Rondeau did not meet the executive.

Rondeau denied any involvement in the scheme.

"You cannot prove a lie," official news agency Agencia Brasil quoted Rondeau as saying in Paraguay, where he was traveling with Lula on Monday. "I don't believe the federal police would say that, because they would need proof."

Still, one newspaper said Lula and his aides were already preparing for the possibility of Rondeau stepping down.

Lula won his first presidential term in 2002 promising to clean up the corruption that has traditionally riddled Brazilian politics and business life.

But his government became swamped by scandals over bribery and vote-buying that led to the resignation of his chief of staff and his finance minister.

Corruption was a key issue in last year's presidential election, although Lula won the second-round run-off. A former union leader, he retains strong support and has shown skill in deflecting criticism from past scandals.

"Lula will say he had nothing to do with the accusations and even try to take credit for the police investigation," said Amaury de Souza, a political consultant in Rio de Janeiro.

"He has gotten away with that line before and he could do it again." ($1 = 1.96 reais).