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Brazil's Supreme Court Frees Another Executive in Petrobras Probe

FILE - The headquarters building of Brazilian state oil company Petrobras in Rio de Janeiro.
FILE - The headquarters building of Brazilian state oil company Petrobras in Rio de Janeiro.

Brazil's Supreme Court ordered another engineering executive released from jail on Wednesday, complicating prosecutors' efforts to expand a corruption investigation at state-run oil firm Petroleo Brasileiro SA.

A court spokeswoman said that Dario de Queiroz Galvão, chief executive of the construction group Grupo Galvão, would be released although he will remain under house arrest.

The decision follows a ruling last week that moved nine other engineering executives from jail into house arrest on the grounds they have the right to defend themselves from charges of corruption and money laundering while not in jail.

Releasing the executives reduces the prosecution's ability to use that as leverage - offering lesser sentences or freedom from jail in exchange for information leading to the prosecution of more suspects - independent legal analysts have said.

Executives from some of Brazil's biggest engineering firms are standing trial for allegedly overcharging Petrobras, as the state-run oil major is known, and using the excess funds to bribe executives, politicians and political parties.

Galvão was arrested in March, later than the executives who were freed last week and who had mostly been jailed in November.

At the time, Grupo Galvão called his arrest illegal and denied the company or its executives had participated in a price-fixing scheme.

Federal Judge Sergio Moro, who is guiding the prosecution of what is thought to be Brazil's largest-ever corruption scandal, had justified the pre-trial jailing citing a flight risk or the possibility of the executives continuing to commit crimes.

However, lawyers defending the engineering executives are starting to have some success in poking holes in the investigation, often by identifying what they say are procedural problems in Moro's court in the southern city of Curitiba.

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