February 23, 2018

Crisis in Brazil deepens with probe of president, top senator

19 May 2017, 07:01 | Rodolfo Wallace

Crisis in Brazil deepens with probe of president, top senator

Demonstrators protest against Brazilian President Michel Temer behind a banner reading

Temer did not seem to have any opinion about the case either.

"I repeat: I will not resign", he said, speaking in Brazilian capital Brasília.

Government officials also said they worry the crisis could hamper investors' interest in multi-million dollars auctions of oil rights, hydroelectric plants and infrastructure projects later this year. And remember, a third of his cabinet before this were already under investigation from those auto wash investigators that I mentioned.

Cunha led the impeachment fight that removed Dilma Rousseff from the presidency a year ago and put Temer, then the vice-president, into power.

Cunha was jailed for 15 years in March for corruption.

The recording was presented to prosecutors as part of a plea bargain from a grafting investigation involving Petroleo Brasileiro SA Petrobras (ADR) (NYSE: PBR).

Temer said he would not resign.

Under Brazil's constitution, Temer's resignation or removal would require Congress to choose someone to serve the balance of ousted President Dilma Rousseff's 2015-2019 term.

Mr. Temer denied the allegations Thursday afternoon, and said he would not resign.

Globo also reported that Batista had recorded Temer endorsing a bribe to silence former speaker of the House Eduardo Cunha. Batista has been under investigation for his company's alleged involvement in a corruption scheme aimed at getting special financial favors from the country's state-owned national development bank, BNDES.

Rousseff and her leftist allies accuse him of having engineered her impeachment and his own rise to power past year in what they say amounted to a coup d'etat. Opposition politicians called for his impeachment. They are preparing for protests against President Michel Temer. Rodrigo Maia, the right-wing chairman of the lower house of Congress and next in the line of succession after Temer, the former vice president, is accused of soliciting campaign donations from the construction firm OAS, a major Petrobras contractor, in return for political favors.

Earlier, a PSDB leader, Ricardo Tripoli, told AFP that "if the evidence is confirmed, then we will ask our (ministers) to leave the government".

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The police operation was part of a massive investigation into corruption known as Operation Car Wash that has implicated scores of politicians and business executives.

Already a Who's Who of the elite has been imprisoned or placed under investigation.

Despite the whiff of scandal, JBS has been a Brazilian success story. The recordings were allegedly made by Joesley Batista, the owner of JBS - Brazil's largest producer and exporter of meat. He claimed to have "nothing to hide" and demanded a "full investigation and a rapid clarification of matters for the Brazilian people".

Temer's office has denied the allegations that he endorsed paying off a witness.

But in his statement Thursday, Temer angrily responded: "I never bought anyone's silence".

Temer replied: "You need to keep doing that, OK?"

Last year, Temer took over as president after the impeachment of Dilma Rousseff in a ruction attributed to the then-powerful Cunha.

Valor cited an unnamed source saying that Brazilian regulators CVM had become aware that the Batistas' group of companies acquired a USA dollar position that could have exceeded $1 billion in the local currency market hours before the plea deal news broke.

President Temer called the media to reaffirm his innocence and vehemently reject calls for his resignation.

REEVES: Oh, well, all day there was absolute speculation, nonstop speculation, that this could be the end of Temer's government.

Allies of the president in Parliament, however, say the evidence against Temer is sketchy. He will have to struggle to maintain support in Brazil's Congress.

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