Brazilian federal police on Tuesday arrested businessman and rancher José Carlos Bumlai, a friend of former President Luíz Inácio Lula da Silva, for suspected fraud in a drillship contract with state-run oil firm Petrobras.
Prosecutors said they were also investigating Bumlai with the help of Brazil's tax collection agency for his role as the intermediary in a series of questionable loans made to politicians and to Lula's and President Dilma Rousseff's Workers' Party (PT).
Rousseff was chairwoman of Petrobras' board from 2003 to 2010, but she has denied any knowledge of graft.
The loans began in 2004 when Lula was president and Bumlai, referred to by one prosecutor as "one of the largest ranchers in Mato Grosso do Sul state," had ready access to the presidential palace, police said.
Prosecutors believe Bumlai used his connections with Lula to obtain loans for businessmen in the sugar and ethanol industry.
Public prosecutor, Diogo Matos, said Petrobras hired engineering firm Schahin to help in the transaction.