SAO PAULO -- Brazil federal police believe a 2014 World Cup stadium in the city of Salvador was overpriced by more than $130 million, and those funds were diverted to political campaigns.
Former Bahia state governor Jaques Wagner was among the targets of the investigation, federal police said in a statement on Monday. Wagner is accused of receiving about $25m in illegal money.
Federal police requested Wagner's arrest, but a local court said no.
Wagner has not replied to a request for comment from The Associated Press.
Fonte Nova Stadium hosted six matches at the 2014 World Cup. The old stadium with the same name was demolished and a new modern arena was built on the same site.
Its cost is currently estimated at $250m. Fonte Nova's private administrators said in a statement they are "waiting for official notification" about the investigation, tagged Operation Red Card.
Federal police say public officials favored construction companies OAS and Odebrecht in the tender for the demolition and reconstruction of Fonte Nova Stadium.
Members of Wagner's Workers' Party believe he should run for president this year if former president Luiz Inacio Lula da Silva is jailed after a corruption conviction.