Corruption report brings impeachment nearer for Collor

RIO DE JANEIRO - Congress yesterday issued a report charging President Fernando Collor de Mello with using his office to 'obtain illicit profits and benefits', making his impeachment almost a certainty.

Senator Amir Lando began to read the 200-page report yesterday morning at the Congress in the capital, Brasilia. 'The evidence points to the malicious creation of a deliberate operation . . . to confer illicit profits and benefits,' it said. An 'industry of influence-trafficking' existed around the presidency. 'Those who knew the rules . . . became 'merchandise' for which businessmen and others were willing to pay incredible and unjustified prices.'

The report is to be sent to the federal prosecutor's office, which will decide whether Mr Collor is to be formally charged. Legal experts say he could be charged with 'passive corruption' and 'responsibility' for wrongdoing. Both are impeachable offences.

Advance copies of the report were published in Sunday newspapers. A request for impeachment is being prepared by the Brazilian Bar Association.

Mr Collor, who denies any wrongdoing, is frantically trying to marshal enough congressional votes to stay in office - even though polls show up to 70 per cent of Brazilians want him out. He became Brazil's first directly elected leader in three decades when he won the 1989 election with promises to spur the economy and clean up government. He now faces monthly inflation of more than 20 per cent, high unemployment and public unrest.

The charges stem from evidence linking him to the illegal activities of Paulo Cesar Farias, his close friend and campaign treasurer. Congress says Mr Farias, who is charged with taking millions of dollars from businessmen in return for promises of government contracts or favoured treatment, used part of the money to cover the president's personal expenses.

Cheques for millions of dollars were uncovered in a bank account belonging to Ana Acioli, Mr Collor's secretary, who pays his bills. The deposits were made using false names and identification numbers. Handwriting experts determined that most of the cheques were signed by Mr Farias's secretary, Rosinete Melanias.

Investigators also revealed at the weekend that Mr Farias and Ms Acioli made large cash withdrawals on the eve of a 1990 bank freeze decreed the day after President Collor took office.

The unpopular freeze, which blocked pounds 115bn (pounds 61bn) in deposits, was part of an anti-inflationary 'shock' plan. Mr Collor said the entire country would have to sacrifice to bring about economic reform.

'The frightening thing is that the man who withdrew his money like a street thief . . . posed as a statesmen,' said Veja, Brazil's largest weekly, in its Sunday edition. 'Brazil elected and took seriously a trickster or a lunatic. In both cases, someone who was disqualified.'

Mr Collor's lawyer, Claudio Vieira, said the President's expenses are paid with a 1989 loan of pounds 5m from Uruguay. But investigators believe the loan never existed, and the secretary of a wealthy Sao Paulo businessman testified that the contract was forged in his office.

Two-thirds of the 503-seat lower house must vote to open impeachment hearings. If it does, the Senate will vote whether to remove Mr Collor permanently.

His replacement would be the Vice-President, Itamar Franco, who commands little regard.

Mr Collor, who says he will not step down before his term ends in 1995, has thrown open the public coffers in an effort to win votes in Congress. He recently released pounds 400m for low-cost housing and sanitation programmes and doled out radio and TV licences to 'friendly' lawmakers.

This appears to have given him enough support in Congress to remain in office, but opposition leaders say popular pressure could turn the tide. Pro-impeachment rallies are drawing thousands of people into the streets.

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