Published: Fri, May 19, 2017
Money | By Armando Alvarado

Brazilian President Michel Temer, accused of bribery, says he will not resign

"But I believe that even if he resigns, the reforms, which are already before Congress, still have a good chance of passing in the medium term".

Ahead of Temer's address just after 4:00 p.m. local time, four members of his Cabinet - Minister of Defense Raul Jungmann, Minister of Culture Roberto Freire, Minister of Cities Bruno Araujo and Foreign Minister Aloysio Nunes - said they planned to step down if Temer did not resign, Brazil's Estadao reported.

In a terse five-minute speech broadcast nationwide, Temer said he had done nothing wrong, that his presidency was helping turn around Brazil's stalled economy and he welcomed an investigation so that he could prove his innocence.

Temer's administration has been embroiled in corruption scandals since being installed in power past year, but the Batista tape is perhaps the strongest blow to the stability of the unelected government yet, plunging the already highly unpopular executive deeper into crisis.

What is he accused of?

Cunha, the former speaker of the lower house, the chief mastermind behind the parliamentary coup against former President Dilma Rousseff and an ally of the unelected president, was sentenced to 15 years in jail in March for corruption, money laundering and tax evasion.

The recording is of a conversation between the president and Chairman Joesley Batista of meat giant JBS, made by Mr Batista using a hidden device, O Globo says.

It did not say how it obtained the information, or what Mr Cunha was being asked to keep quiet about. "I never authorized any payments for someone to be silent".

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It is not yet clear why Temer would want to buy Cunha's silence, since the tape itself will not be made public until the Brazilian Supreme Court approves its release. "I fear no accusations".

What remains to be seen is whether popular discontent with establishment politicians - and Brazilians at this point clearly have plenty to be discontent about - will translate into a genuinely populist, burn-down-the-barn movement, as has happened in the United States and in some European countries.

Senator Randolfe Rodrigues from the opposition Rede party promised demonstrations until Temer quits.

Of more concern to Mr Temer may be signs of dissent within his administration, with a leader of his coalition allies, the social democrat PSDB, saying they were considering leaving the government.

The main Sao Paulo share index closed down 9% and the Brazilian currency suffered its worst day in 14 years.

Investigators have uncovered a massive scheme in which politicians took bribes in exchange for getting big businesses over-inflated contracts with state oil company Petrobras.

Because he is so unpopular with ordinary Brazilians, Temer's legitimacy has rested on his ability to unite the country's three dozen political parties. A former president, Luiz Inacio Lula da Silva, faces several corruption trials related to the probe. Many have accused him of playing a role in engineering his predecessor's downfall for his own gain. She denies all the charges.

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