SAO PAULO/BRASILIA Any decision to arrest Brazil's former President Luiz Inacio Lula da Silva will be made by Federal Judge Sergio Moro, who oversees a sweeping investigation into kickbacks at state-run oil firm Petrobras and approved the detention of dozens of senior executives, a Sao Paulo court ruled on Monday.
State prosecutors in Sao Paulo filed for the arrest of Lula last week after charging him with money laundering for concealing ownership of a beachfront condo, in a case that had been separate from the investigation overseen by Moro in the southern city of Curitiba.
A source told Reuters that Lula, President Dilma Rousseff's predecessor and political mentor, would likely travel to Brasilia on Tuesday or Wednesday to discuss accepting a position in her Cabinet. That would give him immunity from Moro, though not from the country's Supreme Court.
Sao Paulo Judge Maria Priscilla Oliveira said in her decision the state prosecutors' case had an "undeniable connection" to the Petrobras investigation in which dozens of engineering executives schemed to siphon money from Petrobras in order to bribe public officials.
News magazine Veja also reported a major break in the Petrobras case on Monday, providing details of alleged plea bargain testimony from the former head of engineering conglomerate Andrade Gutierrez (ANDG4B.SO) which named several sitting ministers.
Veja reported, without saying how it obtained the information, that former Chief Executive Otavio Azevedo confessed that a bribery scheme already documented at Petrobras was standard operating practice for spending throughout the government.
Azevedo, who is now under house arrest, said that the graft scheme included payoffs for soccer stadiums built for the 2014 World Cup, Veja reported, backing up similar reports from newspaper Folha de S.Paulo in November.
Press representatives for Andrade Gutierrez declined to comment immediately on the report. Efforts to reach representatives of Azevedo were not immediately successful.
His plea bargain, if confirmed, would be the first from a head of Brazil's biggest engineering groups, which have been at the centre of the Petrobras investigation rattling the country's political establishment for two years.
Moro has already allowed federal police to detain Lula for questioning after prosecutors said he may have benefited from the scheme, an event that spurred isolated clashes between Lula's supporters and critics.
Lula has disavowed ownership of the apartment and denied any wrongdoing, calling the investigation political in nature.
His lawyer condemned the decision to send the case to Curitiba, saying Moro should not have jurisdiction over the case and denying that Lula had anything to do with the Petrobras scheme.
Moro, who has also jailed the former treasurer of Rousseff and Lula's Workers' Party as well as Lula's former chief of staff, has become a folk hero to millions of Brazilians fed up with impunity for the elite. Some have criticized his frequent use of pretrial detention, however.
The investigation of Lula has bolstered calls for Rousseff to step down or be impeached. Hundreds of thousands of anti-government protesters flooded the streets on Sunday, many carrying signs in support of judge Moro.
Rousseff also appointed a new justice minister on Monday for the second time in a month, naming Eugenio Jose Guilherme de Aragao, a prosecutor who had previously worked for the nation's electoral court.
(Additional reporting by Alonso Soto in Brasilia; Editing by Chris Reese and Matthew Lewis)
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