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SAO PAULO, May 31 (Reuters) - A former Brazilian cabinet minister is offering prosecutors evidence of graft involving two prominent billionaires who allegedly sought help from politicians to undertake deals during the leftwing Workers Party administration, two newspapers reported on Wednesday.
Antônio Palocci has decided to cooperate with prosecutors in exchange for a lighter sentence related to his role in those crimes, according to the reports in Folha de S. Paulo and Valor Econômico. He has been under arrest since September 2016.
As part of his plea deal, Palocci is seeking house arrest for one year, Folha said. In exchange, he offered to give evidence on deals involving André Esteves, founder of Grupo BTG Pactual SA, and Abílio Diniz, whose family built a supermarket empire that he later sold to Casino Ghichard Perrachon SA .
In his testimony, Folha reported, Palocci will say the supermarket tycoon hired his consultancy firm to help win government support for Diniz's failed attempt to remain in control of retailer Companhia Brasileira de Distribuição . Diniz's move irked longtime partner Casino, which first invested in his family's company in 1999.
Casino became sole controller of Brazil's largest retailer in June 2012 after signing an agreement in 2005 with Diniz. The businessman's de facto departure from the retailer was in 2013.
Regarding Esteves, Palocci plans to say how he sought him out for support on several decrees favoring private banks, Folha reported.
Separately, Valor Econômico reported that Palocci will implicate Esteves's BTG Pactual, which allegedly obtained unfair advantage ahead of its acquisition of a stake in Banco Pan in 2011 after the target received an investment from Caixa Participações SA, owner of state-run lender Caixa Econômica Federal, in 2009.
Press representatives for Companhia Brasileira de Distribuição declined to comment. Abílio Diniz's investment vehicle Península Participações did not have an immediate comment. Palocci's legal advisor could not be reached for comment.
BTG Pactual said it did not have any involvement in the 2009 acquisition by CaixaPar of Banco Panamericano, as Banco Pan was formerly known.
The transaction involving BTG Pactual was made in 2011 with the target's controller at the time, Grupo Sílvio Santos, BTG Pactual said in a statement.
Palocci served as finance minister under President Luiz Inácio Lula da Silva and chief of staff in the administration of Dilma Rousseff, who was impeached last year for illegally using money from state banks to bankroll public spending, marking the end of 13 years of leftist Workers Party rule. ($1= 3.2570 reais) (Reporting by Ana Mano and Paula Arend Laier; Editing by Frances Kerry)