By Ricardo Brito
BRASILIA, Sept 11 (Reuters) - Brazilian Senator Flavio Bolsonaro, the leading right-wing challenger to President Luiz Inacio Lula da Silva in next month's election, is under investigation for alleged corruption and money laundering tied to failed lender Banco Master, according to court documents unsealed on Friday.
The probe into the senator, the eldest son of former President Jair Bolsonaro, was opened in July by Supreme Court Justice Andre Mendonca, a Bolsonaro appointee who has
recently been hailed as a hero by many on Brazil's right, including Flavio Bolsonaro himself.
The development could further shake an already volatile presidential race, with multiple opinion polls showing Flavio Bolsonaro and Lula statistically tied in a simulated second-round runoff.
The judge opened the probe at the request of federal police as part of a broader investigation into the failed bank. But details of the investigation only became public after Chief Justice Edson Fachin ordered the proceedings related to the Banco Master case unsealed late on Thursday.
Mendonca complied with Fachin's request, releasing thousands of pages of court records.
Further details and the broader implications of the newly unsealed documents were not immediately clear, as parts of the case, including details of the investigation into Senator Bolsonaro, remained under secrecy as police actively investigate.
Brazil's institutions have been shaken by the fallout from the expanding probe and alleged ties between banker Daniel Vorcaro and central bank officials, senior government members, opposition politicians and Supreme Court justices.
PROBE STEMS FROM FILM FINANCING
The investigation into Flavio Bolsonaro stems from questions over an investment he allegedly solicited from Vorcaro, owner of Banco Master, to help finance "Dark Horse," a film about his father that stars U.S. actor Jim Caviezel.
Questions about the film's financing emerged in May, prompting the senator to acknowledge seeking financial backing from Vorcaro, while denying wrongdoing. The disclosures cost him support in opinion polls at the time.
The unsealed documents show the federal police then requested an investigation, authorized by Justice Mendonca, to examine whether Senator Bolsonaro committed money laundering, illicit foreign exchange and corruption.
Police cited donations made by Vorcaro, who was arrested in March, to the film as grounds for seeking the probe.
The senator has repeatedly said his dealings with the banker were strictly private and unrelated to the matters under investigation by the federal police.
SUPREME COURT CRISIS
The new developments intensify a crisis rattling Brazil as voters head into an unusually tight election campaign in which any major development could tip the balance in favor of either left-wing Lula or Bolsonaro.
Fachin has sought to resolve a public clash between justices Mendonca and Alexandre de Moraes, who has also been mentioned in the Banco Master probe, that thrust the court into one of its most severe internal crises in decades.
Mendonca made public documents from the investigation earlier this month, including dozens of messages that police say Vorcaro sent to Moraes. The disclosures prompted calls for an unprecedented investigation into a sitting Supreme Court justice over allegations that Moraes acted as an adviser to the banker.
Moraes, in response, accused Mendonca of abusing his authority.
Fachin scheduled a full-court session for Tuesday, when the court's 10-member bench is expected to discuss allegations regarding Moraes' relationship with Vorcaro.
'DISCLOSE EVERYTHING,' SAYS LULA
Senator Bolsonaro's supporters have attempted to link Lula to Moraes, who pursued former President Bolsonaro over a 2023 coup plot and secured his conviction last year.
During Independence Day rallies in Sao Paulo on Monday, a giant inflatable balloon depicting Mendonca towered over crowds gathered to support Bolsonaro's campaign.
Seeking to distance himself from the crisis at the court, Lula publicly supported unsealing the investigation hours before Fachin's decision.
"Whenever there is an allegation involving the judiciary or politics, it should be made public so everyone knows what is happening," he said in an interview with SBT TV on Thursday. "Investigate everything, disclose everything, regardless of who it hurts."
(Reporting by Ricardo Brito and Lisandra Paraguassu in Brasilia, Luciana Magalhaes in Sao Paulo; Writing by Gabriel Araujo; Editing by Alex Richardson and Rod Nickel)
