Brazilian police investigating Jaques Wagner, close ally of Lula, for ties to banking scandal

Brazilian police launched an operation Thursday against Senator Jaques Wagner, a key ally of President Lula and the government’s leader in the Senate, over alleged irregularities linked to a banking scandal. The information was confirmed by a police source to AFP.

The Federal Police announced that it is executing 18 search warrants in three Brazilian states, as part of an investigation into the now-defunct Brazilian bank Master and the suspicious ties between its owner and public officials.

Wagner is one of the targets of the operation, a police source told AFP.

In a statement, the agency said it is investigating “the possible involvement of a public official in a scheme of irregularities involving institutions within the national financial system.”

“The facts under investigation may, in theory, constitute the crimes of passive corruption, active corruption, and money laundering,” it added.

The case began with the insolvency liquidation in November of Banco Master, which owed more than $7 billion to some 800,000 investors (who were reimbursed by a guarantee fund).

It soon led to an investigation into suspected ties between its owner, banker Daniel Vorcaro, and figures in Brazil’s government, which is holding general elections in October. Vorcaro was arrested in March.