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Brazil Prosecutors Charge Lula's Former Chief of Staff

FILE - Jose Dirceu, former presidential chief of staff, center, is accompanied by federal police agents to a car at a police station in Brasilia, Aug. 4, 2015.

A top aide to Luiz Inacio Lula da Silva when he was president was charged with corruption, money laundering and racketeering on Friday, making him one of the most senior members of Brazil's ruling Workers' Party targeted by prosecutors in a massive kickback scandal.

Jose Dirceu, who was Lula's chief of staff between 2003 and 2005, was arrested on Aug. 3 and prosecutors say he was a key architect of a price-fixing and political kickback scheme at state-run oil firm Petroleo Brasileiro SA.

"Dirceu committed crimes and should be punished because we are all equal in the eyes of the law," federal prosecutor Deltan Dallagnol said at a news conference.

He and other prosecutors in the southern city of Curitiba presented charges against a total of 17 people, including former Petrobras executives Renato Duque and Pedro Barusco and former treasurer of the Workers' Party João Vaccari, who is currently in jail and standing trial for related charges.

Dirceu was already under house arrest in Brasilia for running a vote-buying scheme and will stand trial in the much larger scandal focused on Petrobras and other state-run companies if federal judge Sergio Moro accepts the charges.

His lawyer did not immediately respond to request for comment.

Charges against Dirceu could bring the scandal closer to the popular former president Lula, who is not being investigated but was close to some of the engineering executives who have been detained in the kickback scandal.

FILE - Brazil's former President Luiz Inacio Lula da Silva attends an extraordinary Worker's Party leaders meeting in Sao Paulo, March 30, 2015.
FILE - Brazil's former President Luiz Inacio Lula da Silva attends an extraordinary Worker's Party leaders meeting in Sao Paulo, March 30, 2015.

Lula is the target of a separate influence peddling probe into whether he improperly used his connections after leaving office to benefit engineering conglomerate Odebrecht SA abroad.

He says all his travel for the firm was legal.

Dirceu, Lula's senior political adviser, was responsible for the decision to appoint two ex-Petrobras executives involved in the scandal, former refining and supply chief Paulo Roberto Costa and former head of engineering and services Renato Duque.

Prosecutors have accused former Petrobras executives and two dozen engineering firms of inflating the value of service contracts and funneling the excess funds into their own bank accounts and to politicians, a graft scheme they believe moved more than $2 billion over a decade.

The value of corruption uncovered in the 17th phase of the 18-month-old probe was 60 million reais ($16 million), the prosecutors said. They said Dirceu received 11.8 million reais in bribes originating from Petrobras.

($1 = 3.85 reais)