Brazil's President Michel Temer Refuses To Resign Over Corruption Probe

Pauline Gross
May 19, 2017

The allegations are the latest development in Operation Carwash, a sprawling corruption probe that has implicated many of Brazil's business and political elite, including some in the President's own party.

Embattled Brazilian President Michel Temer says he will fight allegations that he endorsed the paying of hush money to an ex-lawmaker jailed for corruption. In less than five minutes, he praised the economic accomplishments of his administration and said that he won't resign as Brazil's President.

The scandal comes at a crucial time for Brazil, which is mired in its worst recession in decades, the economy having shrunk almost 8 percent in the last two years with more than 14 million people unemployed.

Brazil's stock market, Bovespa, plunged more than 10% immediately after opening Thursday, wiping out almost all of its gains for the year.

Brazilian stocks are down 9.7 percent so far for the week, after falling 8.7 percent on Thursday - their biggest one-day drop since the 2008 financial crisis.

On Thursday, police searched Neves' Rio de Janeiro home and Brasilia office. He is being investigated in several corruption cases related to the "Car Wash" probe into kickbacks to politicians.

Mr. Temer has denied wrongdoing. Globo's report said they are Temer and JBS meat-packing company executive Joesley Batista.

If confirmed, the allegations could prove devastating for Temer, whose administration has lurched from one crisis to another since he took office just over a year ago after Dilma Rousseff was impeached and removed as president.

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He is accused of having given his blessing to payments meant to keep the former speaker of the lower house, Eduardo Cunha, from spilling secrets while he is in prison for taking millions of dollars in bribes.

Temer's office issued a statement saying: "President Michel Temer never solicited payments to obtain the silence of former deputy Eduardo Cunha".

He had served three times as speaker of the lower house of Congress and been president of the PMDB for 15 years. Some members of his base are already hinting they're ready to abandon the government and, among opposition lawmakers, there are strong and direct calls for Temer to go. The recording is now part of evidence being examined by investigators, the report said.

Batista's tape has earned him and his brother Wesley, JBS's CEO, immunity from prosecution.

Despite these increasingly desperate conditions for the masses of Brazilian workers, the corporate and financial media and big business politicians have hailed a supposed turnaround in the country's economy, based in large measure on the enthusiastic response of the stock markets and global finance capital to the apparent progress made by Temer in pushing through his attacks on pensions and labor laws.

Risks that labor and pension reforms could stall will likely prompt the central bank to slow the pace of interest rate cuts, limiting a source of relief for businesses battered by the recession, economists said.

O Globo claimed that Batista told Temer that he was paying money to Cunha to buy his silence.

Even before the latest revelations, Temer's approval rating stood at barely 9 percent, with large sections of the population seeing his presidency as wholly illegitimate.

Other reports by GizPress

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