A former aide to Brazilian Finance Minister Antonio Palocci has accused him of accepting illegal contributions from contractors when Mr. Palocci was a city mayor several years ago.
Rogerio Buratti told prosecutors Friday that Mr. Palocci received about $21,000 a month from contractors handling trash collection in Ribeirao Preto.
Mr. Buratti said he suspected the money went to the Workers Party and its former treasurer, Delubio Soares. At the time, the party did not control the presidency.
The allegations come two days after Mr. Buratti was arrested on money laundering and fraud charges in a separate matter. Mr. Palocci, for his part, "vehemently denies" Mr. Buratti's allegations, which rocked local financial markets.
President Luiz Inacio Lula da Silva's administration faces accusations it paid legislators to support the government in Congress. The party has apologized for the crisis, blaming it on rogue aides.
Some information for this report provided by AP and Reuters.