Brazil central banker under fire

BRASILIA, Brazil Brazil's central bank president, Henrique Meirelles, facing allegations that he evaded taxes and used black market money-changers to transfer personal funds, said Friday he had President Luiz Inácio Lula da Silva's support and vowed that he would not step down.

"I am giving no thought to the possibility of resignation," Meirelles said on the Globo TV network's morning news show. "I continue to enjoy the support of the president and of Finance Minister Antonio Palocci."

Brazil's benchmark stock index had its biggest drop in three months on Thursday on concern Meirelles may resign after Veja magazine cited documents from a congressional investigation alleging that he failed to disclose to tax authorities a U.S. bank account that was used for a $50,000 transfer to a money-changer based in São Paulo.

A congressional committee investigating money laundering is not investigating the allegations on Meirelles, said Senator Antero Paes de Barros, who heads the committee. In a televised speech, Barros, a member of the opposition Brazilian Social Democracy Party, called the Veja report "inaccurate."

Both Da Silva and Palocci issued strong endorsements of Meirelles this week after the allegations of possible tax and foreign-exchange irregularities.

In his interview Friday, Meirelles called the operation "perfectly within legal norms."

Meirelles told interviewers on the television show that he was "highly indignant" that details involving his overseas accounts had been made public. "I don't know who is leaking this information," he said. "But I do know that those who are leaking it are invading my privacy and committing an illegal act."

Before becoming president of the central bank in 2003, Meirelles lived in the United States, where he headed global banking for FleetBoston Financial.

"I am one of the few Brazilians to make a success of myself overseas," he said Friday. "I gave all that up to come back home to help Brazil."

The report by Veja magazine came after weeks of claims that Meirelles evaded Brazilian taxes during the six years he served as a banking executive in the United States. The reports said Meirelles failed to declare more than 50 million reals, or $16.3 million, in assets held overseas.

Similar charges were aired against the central bank's monetary policy director, Luiz Candiota, who resigned last week. Candiota denied the allegations but said the accusations were hurting his effectiveness on the job.

"Meirelles' comments on the scandal were pretty convincing," said Rodrigo Boulos, the head treasury desk trader at Banco Santos, Brazil's sixth-largest nongovernment bank. "He gave a good account of himself. The question now is when are these attacks going to stop and will his patience run out? I think he'll stick it out and stay."

Fuente: Bloomberg News