After listening to tape Temer says probe should be shelved

Remigio Civitarese
Mag 19, 2017

The O Globo newspaper reported on Wednesday night that Temer met in March with Joesley Batista, Chairman of meat company JBS SA (JBSS3.SA), which grew rapidly under 13 years of leftist Workers Party rule due largely to low-cost loans from Brazil's national development bank.

Analysts said Temer is unlikely to receive support from a significant share of his coalition, who were afraid of attaching themselves to an administration already being regarded as doomed.

The center-right president insisted on Brazilian television Thursday that he "will not step down" and "did not buy the silence of anyone".

Protests were planned in the main cities across Brazil on Thursday night, many actually beginning shortly after Temer's refusal to resign was reported, with protesters calling for his ouster and direct elections.

"I can't see how Temer survives this", said David Fleischer, a political science professor at the University of Brasilia.

Brazil's political crisis deepened on Thursday as government allies began openly discussing scenarios for the replacement of Mr. Temer after federal police carried out search and arrest warrants throughout the capital, Brasilia.

Investigators mounting what's called the "Car Wash" probe have uncovered huge corruption from Petrobras, with scores of politicians accused of taking bribes from executives in exchange for sweetheart contracts with the state-owned oil company.

Mr. Temer has denied wrongdoing.

Brazil's stock market, Bovespa, plunged more than 10% immediately after opening Thursday, wiping out almost all of its gains for the year. Brazil's currency, the real, lost 8 percent of its value against the USA dollar.

People protest after listening to a national address by Brazil’s President Michel Temer
People protest after listening to a national address by Brazil’s President Michel Temer

Government officials, lawmakers and economists told Reuters the crisis surrounding Temer, 76, could slow the pace of interest rate cuts and diminish consumer and business confidence enough to extend the recession into a third year.

The scandal started with the revelation in O Globo newspaper on Wednesday that Temer had been been secretly recorded while talking to Joesley Batista, an executive from the meatpacking giant JBS, on March 7.

A year ago, Temer took over Brazil's top office promising to restore Brazil's stability after Dilma Rousseff was impeached and removed as president.

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 previous year.

Brazil's securities regulator has launched a probe into currency and stock trades made by executives at meatpacker JBS SA after they made plea bargain testimony that suggested Brazil's president had condoned bribery, Valor Econômico newspaper reported on Thursday, citing unnamed sources. The recording is now part of evidence being examined by investigators, the report said.

Both JBS and its holding company, J&F, declined to comment.

The Workers' Party named five other parties in a statement that called for Temer's resignation and snap elections.

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.

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.

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