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Last Updated: Saturday, 10 September 2005, 22:18 GMT 23:18 UK
Brazil 'laundering' ex-mayor held
By Steve Kingstone
BBC News, Sao Paulo

Paulo Maluf, former mayor of Sao Paulo, Brazil
Maluf is accused of skimming money off from public contracts
The former mayor of South America's biggest city, Sao Paulo, has turned himself in to the police following accusations of money laundering.

Brazilian prosecutors say Paulo Maluf illegally transferred $161m (£87m) to the US and then tried to intimidate a key witness in the case.

Mr Maluf, one of the country's best known politicians, denies the claims.

It is the latest in a string of high profile corruption cases involving Brazilian politicians.

Tax haven

The son of Lebanese immigrants, Mr Maluf was mayor of Sao Paulo in the early 1990s and twice a candidate for the Brazilian presidency.

The 74-year-old turned himself in to the police in the early hours of Saturday morning, soon after a judge ordered his arrest.

The immediate charge is that he tried to intimidate a key witness in the investigation into his finances.

The witness is a black market currency trader who told the police he transferred a $161m (£87m) to the US on behalf of Mr Maluf.

Prosecutors say it was part of a much larger fortune, totalling nearly half a billion dollars, much of which was moved to offshore tax havens.

The police suspect the money was skimmed off from public work contracts during Mr Maluf's time in the mayor's office.

The former mayor denies any wrongdoing and says he never had bank accounts abroad.

His arrest follows another high profile corruption case involving the governing Worker's Party which has admitted raising millions of dollars in illegal campaign funds.

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