A long-simmering political corruption scandal has now penetrated the upper echelons of the Brazilian government and prompted a sudden stock market downturn, thanks to the publication on Thursday night of what a Brazilian newsmagazine describes as transcripts from 400 hours of wiretapped telephone calls.
In the transcripts, a fugitive judge who has been accused of overseeing a fraud and embezzlement scheme implicates a powerful former presidential aide, a member of the economic cabinet, a senator and several congressional deputies in an illegal patronage and influence-trafficking network. The magazine, Isto E, did not disclose how it had obtained tapes of the wiretaps, but government officials have not challenged their authenticity.
The scandal comes at a delicate moment for President Fernando Henrique Cardoso. With municipal elections set for October, his own popularity near a record low and opposition parties eager to exploit the scandal, business interests have expressed concern that the affair could dampen confidence in Latin America's largest economy, which has come roaring back from last year's crippling currency devaluation.
The focal point of the crisis, which the daily Jornal do Brasil today called the worst in the six years of Mr. Cardoso's presidency, is a courthouse in Sao Paulo that remains unfinished nearly a decade after the start of construction.
Recent investigations have determined that normal bidding procedures were bypassed in awarding contracts to politically connected developers and that nearly $150 million in government funds for the project has vanished.
The scandal has already led the Brazilian Senate to expel one of its members for the first time in its 170-year history. Senator Luiz Estevao of Sao Paulo, a member of the government coalition, was impeached on June 20, found guilty of violating parliamentary decorum, and, once stripped of his parliamentary immunity, arrested on charges that a construction company he owns pocketed the bulk of the missing money.
But recently, attention has shifted to Mr. Cardoso's former chief of staff and coordinator of his 1998 re-election campaign, Eduardo Jorge Caldas Pereira, now a prosperous business consultant in Brasilia who has been pressed to explain the content of 117 phone calls he received from the fugitive judge, Nicolau dos Santos Neto, while the courthouse was being built.
Also under fire is the minister of planning and budget, Martus Tavares, who authorized additional spending on the project even after it was being criticized for cost overruns. In the published transcript of the tapes, Mr. dos Santos Neto, the fugitive judge, boasts of using ''my connection'' to persuade the planning minister to authorize the outlay.
Predictions that Mr. Tavares would be fired during an emergency cabinet meeting on Thursday night proved off base, and he has denounced the press for what he calls a campaign of sensationalism and a lack of understanding of the budget process.
But one of the Senate's most influential members said that ''Tavares should leave Cardoso's government as soon as possible,'' and a group of deputies are circulating a petition that would call Congress back from its winter recess for a special session to investigate the case.
