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Exclusive: Brazil prosecutor sees 350 new graft probes after Odebrecht testimony

By Brad Brooks

CURITIBA, Brazil (Reuters) - A top Brazilian prosecutor said more than 350 new investigations will spring from a trove of testimony by executives of construction firm Odebrecht, revealing how corruption cut across the political spectrum from the smallest cities to the highest levels of government.

Carlos Lima, the dean of a team of prosecutors in southern Brazil that is driving the three-year old "Car Wash" investigation, said the Odebrecht statements expanded the probe far beyond expectations and would ensnare top congressmen, senior members of the executive branch and other powerful figures.

On Tuesday, Brazil's Prosecutor General Rodrigo Janot asked the Supreme Court to open 83 new investigations into politicians based on the still-sealed testimony. He also requested another 211 potential cases be sent to lower courts.

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"Between the cases that will go to the Supreme Court and those that will land here with us in Curitiba, there will be upward of 350 new investigations that will begin," Lima told Reuters Tuesday in his office in the southern city of Curitiba.

The revelations could topple President Michel Temer's government, experts say, or derail the prospect of economic reforms that has lifted Brazilian financial markets and made its currency amongst the best performing in the world last year.

Odebrecht is one of several large construction firms that for years paid billions of dollars in bribes to Brazilian politicians and executives at state-controlled businesses, primarily oil company Petrobras.

The 'Car Wash' investigation started three years ago with a probe into a money launderer whose testimony revealed the vast scheme that has now enveloped top political and business leaders.

Since signing the world's largest leniency deal with Brazilian, U.S. and Swiss prosecutors late last year, Odebrecht has become the target of probes by several Latin American nations, where it admitted to paying bribes to win contracts.

Lima said the new investigations would bring in several other nations that are not yet investigating Odebrecht, without providing details.

Lima said the Odebrecht testimony would shock even graft-weary Brazilians. It would show how corruption was endemic at all levels of government, from municipal to federal, as construction firms shelled out billions in bribes in exchange for lucrative government contracts, he said.

"There will be no doubt left about the immense extent of corruption in the Brazilian political system, from top to bottom. It is going to be on view for the entire world to see," Lima said.

"Car Wash by itself will not change a thing, but it will reveal the extent of corruption. What has to change is our democracy itself," he said. "The Brazilian population has to decide now if it wants to continue to be cheated."

BRASILIA ON EDGE

Brazil's political class is agonizing about the over 950 depositions given by 77 Odebrecht executives, expected to be made public soon.

Janot has asked the Supreme Court for permission to investigate congressmen and ministers; the release of their names is imminent. Janot already obtained permission to investigate 54 politicians in 2015. It is not clear if some of those names will feature on the new list.

Congressmen have been working for months to undermine the Car Wash investigation, Lima said, trying to pass amnesty measures during the dead of night. So far those efforts have borne no fruit and Lima believes the moment has passed.

"Once it is known who is not involved, the mood of those not under investigation will be more positive, and I believe they will see that it's useless to try to pass amnesties or other measures to allow those who are corrupt to escape justice," he said.

He would not comment on whether he thinks the Odebrecht revelations would result in the fall of Temer, who took over as president last year following the impeachment of Dilma Rousseff.

Temer served as vice president to Rousseff but helped to lead the maneuverings that ended in her ouster.

Sergio Praça, a political scientist at the Getulio Vargas Foundation, a leading Brazilian University, said Temer's government is on the brink.

Temer has repeatedly said he is a caretaker president until the 2018 elections and that his main goal is to pass economic reforms to pull Brazil's economy from its worst recession on record.

Temer has pushed through austerity measures and is likely to get changes to the bloated pension system passed, Praça said.

"But once the Odebrecht testimony really hits, even if Temer's government survives, which it very well may not, it will have absolutely no political force," he said.

"There will be total paralysis. No more reforms will pass because this government is going to implode. Nothing will get done until a new president is elected."

(Reporting by Brad Brooks; Editing by Nick Zieminski and Daniel Flynn)