Published: Fri, May 19, 2017
Life&Culture | By Rose Hansen

Brazil's Temer Defies Calls to Step Down over Wiretap Scandal

Brazil's Temer Defies Calls to Step Down over Wiretap Scandal

Brazil's political crisis deepened sharply on Thursday with corruption allegations that threatened to topple the president, undermine reforms aimed at pulling the economy from recession, and leave Latin America's largest nation rudderless.

If Temer eventually resigns or is impeached, Brazil's constitution calls for the leader of the lower house to temporarily take over and for Congress to name a successor within 30 days.

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

The Sao Paulo stock market reacted in panic Thursday to the specter of Brazil losing its second president in just over 12 months, with trading suspended briefly after the Bovespa index crashed more than 10 percent.

The exchange's benchmark Ibovespa index ended the day down 8.8 per cent, while the value of the Brazilian real against the dollar plunged by almost 9 per cent. Claims surrounding a complex web of bribery and hush money, known as the "Car Wash" scandal, have snowballed over the years to engulf numerous country's top politicians and companies.

The president has denied any wrongdoing, and his office has petitioned the Supreme Court to release the contents of the secret recording.

Late Wednesday, Globo reported that JBS meat-packing company executive Joesley Batista had recorded Temer endorsing a bribe to silence Cunha, who was previously an ally of Temer, though the two appear to have had a falling out. Brazilian federal police are searching the office and homes of Neves, a top senator and presidential contender.

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Brazil's President Michel Temer on Thursday defiantly said he would not resign after the Supreme Court authorized an investigation into allegations he condoned bribes to a potential witness in a major corruption probe. Instead, the veteran center-right politician - who took over past year with a promise to restore Brazil's stability after the impeachment of leftist president Dilma Rousseff - came out swinging.

The Podemos party said Thursday that its 13 members in the lower house have left the governing coalition.

Around 24 hours after an explosive report in O Globo newspaper that said Temer had been caught on tape agreeing to bribe the jailed politician, he faced eight formal requests for his impeachment.

Temer then allegedly told Batista: "You need to keep that up, okay?"

He has completed one year in office without any relevant proposals to tackle the systemic causes of corruption in the country, and also shown little concern for even minimal ethical standards, nominating and maintaining in key positions people tainted by serious allegations of corruption or under formal investigation. If it indicts Temer, he would have to step down.

That would also greatly complicate the situation, because if Temer lost that case, he could appeal to Brazil's Supreme Court. EARLY ELECTIONS Temer's opponents, led by Rousseff's Workers Party which was ousted with her impeachment after 13 years in power, are calling for early elections to replace Temer, whom they accuse of conspiring to replace Rousseff when he was her vice president. Consequently the shares of banks and state-controlled oil company Petrobras slumped. Since launching three years ago, the "Car Wash" probe into billions of dollars in kickbacks has put several top businessmen and politicians in jail.

The Eurasia risk consultancy said the new allegation threatens Temer.

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