Brazil govt rejects accusations of illegal election funding

New accusations that President Dilma Rousseff's election was illegally funded with graft money was rejected by her government on Thursday while it expressed confidence it can block an attempt to impeach her.

According to a report by local newspaper, executives from Andrada Gutierrez, Brazil's second-largest engineering company, testified that Rousseff's 2014 re-election campaign was partly funded by kickbacks from large infrastructure projects.

The testimony, part of a plea bargain with 11 executives, would be the strongest link yet between Rousseff's campaign and a widening corruption investigation that has toppled her associates and dozens of other political and corporate officials.

The main opposition party PSDB, which announced the quitting of President Rousseff's coalition government last month, demanded that electoral authorities strike down Rousseff's 2014 victory and call for new elections later this year.

The effort is separate from ongoing impeachment proceedings in Congress over allegations that Rousseff manipulated budgetary accounts to boost her 2014 re-election campaign.

Risk consultancy Eurasia sees 75 percent odds Rousseff, Brazil's first female president, will not finish her term as she battles impeachment, a deep recession and a Zika virus outbreak as Brazil prepares to host the Olympic Games in August.

Rousseff's Workers' Party and her spokesman Edinho Silva, who was her campaign treasurer, rejected the new allegations as false and said that all campaign donations were legal and duly reported to electoral authorities. They also dismiss the alleged irregularities in the impeachment effort.

Rousseff slammed the deliberate leaks to the media as plea bargain testimony obtained by prosecutors and said the disclosures were politically motivated to oust her.

"The use of selective leaks is clearly aimed at creating the conditions for a coup," she said in a speech to a women's rights groups, once again using language that increasingly portrays efforts to oust her as unconstitutional. "The leaks have gone too far."

An impeachment committee is expected to recommend to the lower house of Congress next week that Rousseff be impeached for hiding overruns in the government budget to boost her re-election prospects. A vote in the full chamber is expected in 10 days.

The government is absolutely confident it can muster enough votes to prevent impeachment based on its conviction the president committed no impeachable crime, Brazil's Attorney General Jose Eduardo Cardozo told to foreign reporters on Thursday.

According to the executives, bribes were paid to win contracts in projects, including the Angra 3 nuclear power station, the Belo Monte hydroelectric dam and three stadiums built for the World Cup held in Brazil in 2014, Folha reported.

The alleged bribes are similar to those first uncovered in the far-reaching graft probe around state-oil company Petroleo Brasileiro SA, or Petrobras.

Plea bargain deals are strictly confidential in Brazil until the testimonies are accepted as evidence by a judge. Andrada Gutierrez declined to comment.