A federal judge in Brazil overseeing a sweeping corruption investigation said on Tuesday there were signs that President Dilma Rousseff's former chief of staff had received bribes.
Judge Sergio Moro asked the Supreme Court to authorize an investigation into whether a graft case involving Brazil's planning ministry may have benefited Gleisi Hoffmann, now a senator and still personally close to the president.
Hoffmann has not been formally charged with any wrongdoing.
Moro's investigation, which has mostly focused on a political kickback scheme at state-run oil firm Petrobras (PETR4.SA) over the past 17 months, has already pushed Rousseff's approval rating to single digits and, along with a slow economy, brought calls for her impeachment.
"This is very bad news for Rousseff, at a time she is doing everything to diminish the crisis, news like this brings the crisis even closer to her," said Thiago de Aragao, a partner at Arko Advice, a consulting firm.
Hoffmann served as Rousseff's chief of staff from 2011 to 2014, before leaving to run for senator as a member of Rousseff's Workers' Party.
Rousseff has repeatedly denied knowing about corruption at Petrobras, though she chaired the oil firm's board from 2003 to 2010 when much of the alleged graft took place.
Though reports of Hoffmann's involvement hurt Rousseff's image, it is unclear if the investigation into the planning ministry will reach her, said Aragao.
Brazilian Vice President Michel Temer said on Tuesday that an impeachment was "unthinkable," the day after he decided to drop the day-to-day political coordination of her government.
The corruption investigation, which has broadened to other state-run companies and ministries, is divided between Moro's court in the southern city of Curitiba, where trials have been ongoing since last year, and the Supreme Court in Brasilia, the only court that can try sitting politicians.
PLANNING MINISTRY FRAUD
Moro said Hoffmann appeared to have received money from Consist, a consultancy that allegedly helped divert funds from the planning ministry.
One of Hoffmann's lawyers, Guilherme Gonçalves, appeared to have taken money that Consist received from the planning ministry in 2011, Moro wrote in a dispatch, citing documents seized from Gonçalves' law offices.
Moro said evidence also implicated Hoffmann's husband and former minister, Paulo Bernardo, in the scheme. Bernardo served as planning minister for former President Luiz Inacio Lula da Silva and then as Rousseff's communications minister.
Hoffmann said in a statement she had no knowledge of Gonçalves' relationship to other clients or of any campaign donation from Consist.
Hoffmann was one of dozens of politicians who appeared on a list released by the Supreme Court in March and are under investigation for receiving bribes from the kickback scheme at Petroleo Brasileiro SA, or Petrobras.
Federal prosecutors last week charged the first two politicians in the scandal: Eduardo Cunha, speaker of the lower house of Congress, and Fernando Collor de Mello, a former president and sitting senator.
Paulo Roberto Costa, a former executive at Petrobras, also testified at a congressional hearing on Tuesday that Hoffmann was among those who received illegal funds from overpriced contracts.
Alberto Youssef, a convicted money launderer, said at the same hearing that former opposition presidential candidate Aecio Neves took bribes from a corruption scheme involving Furnas, a subsidiary of state-run power utility Eletrobras (ELET6.SA).
Neves' party said in a statement Youssef's testimony was unfounded and prompted by a Workers' Party senator seeking to draw attention away from Rousseff allies implicated in the scandal.
Prosecutors had closed the investigation into Neves, who narrowly lost to Rousseff in 2014, and Furnas in March.
