Brazil's President Michel Temer Clings to Power; Emerging Market Stocks Struggle

Modesto Morganelli
Mag 20, 2017

Joesley Batista, owner of Brazilian meat company JBS, confessed Friday that de-facto President Michel Temer had requested and received bribes from his company since 2010.

Temer is facing calls to resign after a secret recording was made public in which a JBS executive appears to get approval from Temer to pay hush money to the former speaker of the lower house. According to a report by newspaper O Globo, the Batista brothers have also hired a law firm to negotiate a deal with the U.S. Department of Justice.

The constant march of indictments and new scandals has led to near paralysis in Brasilia, the capital, and led to widespread calls among Brazilians for new elections. Opposition politicians including Sen. Nonetheless, Cunha is believed to have been threatening to strike a plea bargain of his own with prosecutors - one that would ostensibly be politically damaging to Temer, formerly a close ally of the jailed lawmaker.

Temer on Thursday, in a terse address to the nation, said he would not resign from the presidency.

An exchange-traded fund tracking Brazil's benchmark Bovespa stock index fell more than 8 percent in Tokyo, while American depositary receipts for Petrobras fell as much as 11 percent in after-hours NY trading as investors ditched Brazilian assets at the sight of more political turmoil. "It is necessary that Brazil find a way through direct election", one protester, Thiago Pereira, told RT's Ruptly video news agency.

The plea-bargain testimony indicates the illegal payments were made to facilitate the company's access to loans from BNDES that date back to 2005.

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.

Temer released a statement late Wednesday, denying all accusations.

Batista told Temer that he was paying money to make sure that Cunha - thought to have encyclopedic knowledge of Brazil's notoriously dirty political world - would keep quiet while serving his sentence for taking bribes.

After the Globo report on Temer, Brazil's highest court opened an investigation into the accusation late Thursday and lifted the seal on the almost 39-minute recording, which is scratchy and often inaudible.

On Thursday, Temer emphatically refused to step down after the Supreme Court authorized a probe against him.

The revelations are the latest fallout from the "Car Wash" investigation into a kickback scheme at state oil company Petrobras.

There is now a possibility Temer will have to leave office, either through impeachment or resignation.

Temer had been recorded encouraging the bribery of a key figure in the lava jato corruption scandal that has engulfed large sections of Brazil's business and political leadership. "Brazilians must mobilise, must take to the streets to forcefully demand the immediate resignation of Michel Temer", he said on Twitter.

In a video of his plea bargain testimony, Batista said Temer offered to personally intercede on JBS's behalf to influence Finance Minister Henrique Meirelles and BNDES President Maria Silvia Bastos.

The sprawling "Car Wash" probe that began three years ago has already put dozens of Brazil's top businessmen and politicians in prison. The conversation was secretly taped by Batista, who unbeknown to the president had been swept up in the corruption probe and agreed to cooperate with investigators.

Altre relazioniGrafFiotech

Discuti questo articolo

Segui i nostri GIORNALE