Brazilian President Dilma Rousseff 's young government faces complexity with its first scandal on Monday, as her chief of staff Antonio Palocci was asked explanations for revelations of his net worth by 20 folds, reported Reuters.
Palocci, a medical doctor by profession, who quit as finance minister in 2006 because of a separate ethics scandal, faces a demand from Brazil's federal public prosecutor to provide further details on contracts with clients of the consulting firm that he ran while serving in Congress.
Palocci had changed the consulting firm's mission to real estate management two days before he took office as Rousseff's chief of staff, Imarketnews reported.
The revelation of an increased flow of income for Palocci could harm Brazilian government's reform agenda, said reports.
The opposition is calling on Palocci, the government's chief power broker and a key economic policy-maker to explain the 20-fold increase in his wealth during his tenure as a federal deputy from 2007 to 2010. The opposition is also pushing for Congress to open an official investigation.
Rousseff's government, with just a five month tenure in office, might be forced to make concessions and hand out more posts to allies in the unwieldy governing coalition in exchange for their backing.
Rousseff held a regular coordination meeting with her top ministers on Monday. A senior government source told Reuters that she would order her cabinet to forcefully defend Palocci, who has denied any wrongdoing and said that his income was fully documented in tax returns. It is legal for Brazilian lawmakers to run private companies as long as they are not used to peddle political influence.
It's very hard to say where these allegations are coming from -- is it pure investigative journalism from Folha de Sao Paulo or are they getting some help from disgruntled segments of government? he said, referring to the newspaper that first reported Palocci's wealth increase, reported Reuters.