BRASILIA, Sept 11 (Reuters) - Brazilian SenatorFlavio Bolsonaro, the leading right-wing challenger to President Luiz Inacio Lula da Silva in next month's election, is under investigation for alleged corruption and money laundering tied to failed lender Banco Master, according to court documents unsealed on Friday.
The probe into the senator, the eldest son of former right-wing President Jair Bolsonaro, was opened in July by Supreme Court Justice Andre Mendonca, a Bolsonaro appointee who has recently been hailed as a hero by many on Brazil's right, including Flavio Bolsonaro himself.
The development could further shake an already volatile presidential race, with multiple opinion polls showing Flavio Bolsonaro and Lula statistically tied in a simulated second-round runoff.
The judge opened the probe at the request of federal police as part of a broader investigation into the failed bank. But details of the investigation only became public afterChief Justice Edson Fachin ordered the proceedings related to the Banco Master case unsealed late on Thursday.
"Investigate everything and everyone with transparency; show it to the press, show it to the people. Let's see who is right," Senator Bolsonaro said during a campaign event on Friday.
Further details and the broader implications of the newly unsealed documents were not immediately clear, as parts of the case, including details of the investigation into Senator Bolsonaro, remained under secrecy as police actively investigate.
Brazil's institutions have been shaken by the fallout from the expanding probe into alleged ties between disgraced banker Daniel Vorcaro, the owner of Banco Master,and central bank officials, senior government members, opposition politicians and Supreme Court justices.
PROBE STEMS FROM FILM FINANCING
The investigation into Flavio Bolsonaro stems from questions over an investment he allegedly solicited fromVorcaro, owner of Banco Master, to help finance "Dark Horse," a film about his father that stars U.S. actor Jim Caviezel.
Questions about the film's financing emerged in May, prompting the senator to acknowledge seeking financial backing fromVorcaro, while denying wrongdoing. The disclosures cost him support in opinion polls at the time.
The unsealed documents show the federal police then requested an investigation, authorized by JusticeMendonca, to examine whether Senator Bolsonaro committed money laundering, illicit foreign exchange and corruption.
The fresh revelations will again cast a shadow over Bolsonaro's campaign, but now the candidate will have less time to recover, said Marco Antonio Teixeira, a political scientist at Fundacao Getulio Vargas, in Sao Paulo.
"Polling has shown there is a segment of voters that fluctuates depending on events that is small, but decides the outcome of the election," he said.
The unsealed police report confirms much of a report by news website Intercept Brasil from May that first detailed communications between the senator andVorcaro up until the banker's first arrest in November 2025.
"Brother, I am and always will be with you," Bolsonaro told the disgraced banker in an audio message at the time, according to the report.
Police said data extracted from Vorcaro's cellphone showed he transferred about $12 million in 2025 to a U.S.-based fund linked to former lawmaker Eduardo Bolsonaro, the senator's brother, who now lives in Texas and is his campaign adviser, as part of efforts to finance the film.
One screenshot included in the documents suggests Eduardo Bolsonaro advised Vorcaro's team on the management of the funds in the United States.
Flavio and Eduardo Bolsonaro denied on Friday any wrongdoing.
Eduardo Bolsonaro told Reuters on Friday that the transfers to a U.S.-based fund were intended to prevent interference from Justice Alexandre de Moraes, who convicted his father over a coup plot and later oversaw a separate case that resulted in Eduardo Bolsonaro's own conviction.
"They want to frame this as bribe money, which it isn't," said the candidate's brother. "That's a lie."
'DISCLOSE EVERYTHING,' SAYS LULA
The release of the new files came asFachin sought to resolve a public clash between justices Mendonca andMoraes that last week thrust the court into one of itsmost severe internal crises in decades.
Mendonca made public documents from the investigation earlier this month, including dozens of messages that police say Vorcaro sent toMoraes. The disclosures prompted calls for an unprecedented investigation into a sitting Supreme Court justice over allegations that Moraes acted as an adviser to the banker.
Moraes, in response, accused Mendonca of abusing his authority.
Senator Bolsonaro's supporters then used the crisis to attempt to link Lula to Moraes, dragging thousands of supporters to a rally in Sao Paulo on Monday, where a giant inflatable balloon depictingMendonca towered over crowds.
Seeking to distance himself from the crisis at the court, Lula publicly supported unsealing the investigation hours beforeFachin's decision.
"Whenever there is an allegation involving the judiciary or politics, it should be made public so everyone knows what is happening," he said in an interview with SBT TV on Thursday. "Investigate everything, disclose everything, regardless of who it hurts."
On Friday, people close to Lula's campaign and his administration told Reuters that they were cautiously celebrating the new developments, though they were unsure about how they would impact the campaign.
(Reporting by Ricardo Brito and Lisandra Paraguassu in Brasilia, Luciana Magalhaes in Sao Paulo; Writing by Gabriel Araujo and Fabio Teixeira; Editing by Manuela Andreoni, Alex Richardson, Rod Nickel and Aurora Ellis)
