Former aide to Cardoso rebuts corruption accusations

BRASILIA, Brazil (Reuters) -- A former top adviser to Brazilian President Fernando Henrique Cardoso denied involvement in a multimillion-dollar embezzlement scandal during testimony on Thursday before a congressional commission.

Eduardo Jorge, Cardoso's former chief-of-staff, was hit with a barrage of accusations and verbal attacks by opposition politicians in what could be their last opportunity to link the scandal to high government officials.

But the testimony produced no new concrete information or evidence of links to officials, leading financial markets to end higher after having traded cautiously all week on scandal-related worries.

During the sometimes heated question-and-answer session in Congress, one senator said he wanted Jorge to see the light of day "only through the bars of a cell."

"I am revolted by you saying that in public testimony being aired over Brazil," Jorge snapped back.

He often twitched and shuffled his tie collar during more than five hours of testimony, his first public appearance since the scandal broke in earnest in mid-July.

Jorge arrived to give the testimony, in which he was not legally obliged to tell the truth, with a war chest of files and newspaper clippings to refute accusations against him.

A senator -- a prominent property developer -- has already been impeached over allegations of links to the scandal.

In a written statement at the beginning of the testimony, Jorge refuted all major points of suspicion, above all that he had close contacts with a fugitive judge accused of involvement in the scheme to siphon $100 million in public funds from the courthouse construction project.

Jorge, who so far faces no formal charges, said he had been "morally lynched" by the media.

"I have no control of the liberalization of funds," he said, denying allegations that he smoothed the passage of money to the courthouse.

Powerful Senate President Antonio Carlos Magalhaes, a government ally who has rallied behind Cardoso, overlooked the proceedings in silence at the head of the panel.

Cardoso's spokesman said in his daily evening briefing that the president had no comment. "All I can say is what I saw, which was the president working normally when I entered his office, with the television turned off," he said.

While Cardoso has successfully ridden out several scandals since coming to power in 1995, political analysts say this is the worst because it coincides with rock-bottom popularity for the president ahead of October local elections.

Opposition politicians accused Jorge of everything from influence peddling to help the private sector win lucrative public contracts to dodgy dealings with campaign financing funds. Jorge denied all accusations.

The government hopes the opposition will be unable to obtain enough evidence to support the creation of a new special congressional commission to probe specific allegations linking government officials to the embezzlement scheme.

Jorge's categorical denials on Thursday helped the government's argument that no such inquiry is necessary, government allies said. The majority of the panel questioning Jorge belongs to pro-government parties.

Copyright 2000 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

For more Americas news, myCNN.com will bring you news from the areas and subjects you select.

See related sites about Americas

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.