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Published: Thursday March 13, 2014 MYT 9:10:02 AM
Updated: Thursday March 13, 2014 MYT 9:11:10 AM

Brazil's president faces revolt by coalition allies

BRASILIA (Reuters) - The rift between President Dilma Rousseff and her main political allies widened on Wednesday one day after they voted in Congress to look into bribery allegations levelled at Brazil's state-run oil company Petrobras.

Disgruntled congressmen from coalition parties summoned an array of Rousseff's cabinet members to appear before various congressional committees in a new display of discontent.

They also invited Maria das Graças Foster, the chief executive officer of state-controlled oil producer Petróleo Brasileiro SA, to answer questions about the allegations that a Dutch company paid bribes to company officials to win contracts for floating oil platforms.

The revolt in the ranks of the ruling coalition is led by Brazil's largest party, the centre-right PMDB, which is jockeying for a bigger role in Rousseff's government and more funds for its members' districts in an election year.

"The government has neglected the allied parties and their leaders," said PMDB lawmaker Danilo Forte, who proposed calling a party convention to decide whether to end the alliance with Rousseff's leftist Workers' Party (PT).

The rebellion comes at a bad time for Rousseff as she plans to run for re-election in a scenario complicated by economic downturn and rising inflation in Latin America's largest nation.

Government and foes were surprised by the extent of Tuesday's defeat that showed the strength of the disaffected bloc in Congress. The lower house voted 267-28 to set up a special committee to monitor investigations by the Netherlands and Petrobras into the bribery case involving Dutch ship leaser SBM Offshore NV.

The allegations by the unidentified former SBM employee suggest that Petrobras officials were paid $139 million in bribes through an intermediary.

The committee has no power to subpoena witnesses and its work is not expected to lead to any consequences for the government. But it can draw attention to a bribery case that would be fodder for Rousseff's opponents on the campaign trail.

Rousseff chaired the board of Petrobras as minister in the government of her predecessor and mentor Luis Inacio Lula da Silva when the bribes were allegedly paid. A scandal could also hurt then president of Petrobras, José Sérgio Gabrielli, who is running for governor of the northern state of Bahia this year.

Political analysts say the coalition crisis is of Rousseff's own making because she dislikes backroom politics and lacks the charisma and political skills that helped Lula forge today's ruling coalition.

Yet Rousseff is a strong favourite to win the October 5 election and no one believes her allies will break with her.

"They will bleed the government as much as they can, but at the end of the day they will join forces with Rousseff to avoid the risk of defeat at the polls," said André Cesar, a political analyst at Brasilia-based consultancy Prospectiva Consultoria.

PMDB Senator Romero Jucá said Rousseff has overlooked her government's relations with Congressional allies because, unlike Lula, she simply does not like speaking to politicians.

"The PMDB-PT alliance will end after these elections. Only one thing could change that: if Lula runs again in 2018." Jucá said in an interview.

(Additional reporting by Maria Carolina Marcello and Jeferson Ribeiro; Editing by Lisa Shumaker)

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