Brazilian authorities arrested a former finance minister Monday for his alleged role in a massive kickback scheme, the latest high-level politician to be snared in a corruption probe roiling Latin America's largest nation.

Antonio Palocci, who was both a finance minister and chief of staff in the 2003-2010 government of former President Luiz Inacio Lula da Silva, was detained in Sao Paulo in the morning. Palocci's lawyer said his client was innocent and called the arrest a "spectacle."

Investigators said Palocci exerted great influence with officials at Brazilian constructor Odebrecht, a principal participant in a kickback scheme at state oil company Petrobras that authorities say resulted in more than $2 billion in bribes over more than a decade.

Palocci allegedly negotiated deals on behalf of Silva's Workers' Party and received bribes himself, according to police. Seized documents showed 128 million Brazilian reals ($40 million) were paid to people connected to the Workers' Party, including Palocci, between 2008 and 2013, authorities said.

"The flow of money was constant," prosecutor Laura Goncalves Tessler said at a news conference in the southern city of Curitiba.

Police also accuse Palocci of participating in conversations with Odebrecht officials that led to the purchase of a plot of land allegedly for the construction of an institute named after Silva, whom Brazilians refer to as Lula.

However the Lula Institute was not built on that plot of land and it no longer belongs to anybody in the Workers' Party, authorities said.

"This seems like a spectacle," Jose Roberto Batochio, Palocci's lawyer, told reporters outside a police station in Sao Paulo. "The show goes on. The circus goes on."

Over the last two years, dozens of politicians and businesspeople have been jailed in the Petrobras investigation.

Palocci, who was also briefly chief of staff under former President Dilma Rousseff, is the second ex-minister from Silva's government to be arrested in recent days in connection with the probe.

Guido Mantega, also a finance minister under Silva and Rousseff, was detained last week on accusations of asking tycoon Eike Batista for bribes on behalf of the Workers' Party in 2012 in exchange for government approval for two oil platform contracts.

Silva is facing several charges related to the Petrobras scandal. Earlier this month prosecutors called him the "maximum commander" of the scheme, though the charges were much more limited in scope: corruption and money laundering. He also faces trial for alleged obstruction of justice.

Silva has repeatedly proclaimed his innocence and argued that he and his party are being persecuted to keep him from running for president again in 2018.


Associated Press photographer Andre Penner in Sao Paulo contributed to this report.