Published: Fri, May 19, 2017
Worldwide | By Gretchen Simon

Brazil president vows to stay on amid corruption probe

Brazil president vows to stay on amid corruption probe

The situation of Brazilian President Michel Temer became delicate on Thursday following a newspaper report that he is accused of taking bribes and endorsing bribes to silence a witness in a corruption case.

"I can't see how Temer survives this", said David Fletcher of the University of Brasilia.

There had been speculation that Temer would use his televised address to resign.

The presidential palace released a statement saying that Temer "never requested payments to obtain the silence of ex-deputy Eduardo Cunha".

If Temer resigns, his term will be completed by the next in line, Rodrigo Maia, speaker of the Lower House, who is facing his own federal graft investigation.

The allegations come just over a year after Mr Temer assumed the presidency, following the start of impeachment proceedings against Ms Rousseff.

A major newspaper in Brazil, O Globo, is reporting that Temer was caught on tape discussing bribery payments.

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.

JBS, which grew rapidly under 13 years of leftist Workers Party rule due largely to low-priced loans from Brazil's national development bank, on Thursday said in a statement that seven of its executives, including Batista, had reached plea bargain deals with prosecutors. But the impact of their plea bargain and the 38 recorded minutes of the March 7 meeting at the president's residence are likely to reverberate for a long time to come.

Optimists, including Temer himself, had been heralding a recovery following small signs of a return to growth recorded earlier in the week, gains that are now in jeopardy.

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Temer was re-elected vice president in 2014 on a ticket with President Dilma Rousseff, and he moved into the top office when she was impeached and removed from as president past year.

Brazil's share and currency markets plunged Thursday. Temer has lost whatever political support he had.

Ironically, the legislature that now holds Temer's fate in its hands is itself riddled with corruption scandals. The allegations are the latest twist in a sprawling corruption scandal that has reached the top levels of the country's financial and political elite.

On the tape, which was finally made public Thursday, Batista told Temer that he was paying money every month to Cunha "to keep things under control".

Temer responded that "You've got to keep on doing that".

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

Recorded the conversation: Joesley Batista, chairman of JBS.

Temer and Cunha are members of the same party and were previously allies.

On Wednesday, the World Wildlife Fund for Nature (WWF) said law changes intended by Temer's government endangered a giant swathe of rain forest and opened up indigenous reservations to mining. The leftist Workers' Party of Rousseff scents the chance for revenge.

"It is very worrisome for Brazil. this is a very serious thing", said Alejo Czerwonko, director of emerging markets investment strategy at UBS, though he added that the potential for contagion for other emerging markets was limited.

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