If Brazil President Manages to Remain in Office He’ll Be Too Crippled to Govern

Demonstrators marched across Brazil on Sunday calling for the resignation or ouster of President Michel Temer who is implicated in a widening corruption scandal that is undermining his government’s fragile efforts to end a historic recession.

Protests took place in cities including São Paulo and Rio de Janeiro, where hundreds of demonstrators marched along the shoreline, chanting and waving banners reading “Temer Out!”

The protests were relatively small compared with massive marches in recent years, including 2016 demonstrations that built support for the impeachment of Dilma Rousseff, Temer’s predecessor.

Brazilians were shocked by a recording disclosed last week that appeared to show Temer condoning the payment of hush money to a lawmaker jailed in a corruption probe that has ensnared dozens of politicians and executives in the last three years.

Late Saturday, the Brazilian Bar Association, known as the OAB, took a vote 25 to 1, saying it would join the ranks of those filing impeachment motions against Temer in Congress, arguing that the recording, if proven to be accurate, showed a dereliction of presidential duties to uphold the law.

The revelations have badly eroded political support for Temer’s measures to spur economic recovery, including overhauls to Brazil’s labor and social security regulations.

“This could keep costing Brazil the stability and reforms it needs to encourage investment and growth,” said Carlos Melo, a political scientist at Insper, a São Paulo business school, noting the massive selloff of Brazilian assets in stock and currency markets last week.

“Confidence comes with expectations of progress,” he added. “That is something that is quickly vanishing because Temer has lost at least the appearance of being beyond the scandals.”

Temer on Saturday sought to reassure Brazilians with a fierce denial that he had condoned or committed any crimes. Instead, he accused Joesley Batista, chairman of meatpacking giant JBS of manipulating a recorded conversation with Temer that is central to a plea agreement between prosecutors and JBS executives over illegal payments to politicians including the president and his two predecessors.

But few in Brazil appeared reassured, with one allied political party saying on Saturday that it would no longer support Temer’s conservative government and another saying it would consider doing the same.

However the Supreme Court did accept Temer’s appeal that the recordings be tested for doctoring. The president also described Joseley Batista as a “big mouth charlatan”.

“This clandestine recording was manipulated and tampered, clearly with devious intentions,” Temer charged.

The Supreme Court Justice with the case, Edson Fachin, who authorized the investigation of the president for active corruption, obstruction of justice and illicit association, did accept the “fraudulent” recordings appeal, which will be decided on Wednesday. This despite the fact that the Attorney General Rodrigo Janot objected arguing there are even more incriminating recordings.

“We are facing in Brazil a clash between the political world and the judicial world,” said Thiago de Aragão, director at the Brasília-based consultancy Arko Advice.

With tumbling approval ratings, the president’s support in Congress will be the decisive factor. The PSDB, Temer’s main ally in his administration’s coalition, called for an emergency meeting on Sunday to discuss whether the party would continue backing the struggling president, reports said.

Pressure is also growing on ministers to declare their hands. Some see Henrique Meirelles, the finance minister, as a possible successor to Temer. Other names are Raul Jungman, currently defense minister, and Nelson Jobim, ex minister of Justice, of Defense and ex Chief Justice, much respected by public opinion and with support from the main parties.

Carlos Melo, a São Paulo-based political scientist, thinks Temer is unlikely to survive the crisis but the reforms, including of the pension system, may. “The reforms are not irremediably lost because they are inevitable. Temer does not have credibility, so it will be up to the next political leadership to explain them properly to the people.”

Temer, who came to power a year ago after Ms Rousseff’s impeachment, has endured other scandals. But the latest one is proving an earthshaking development in a three-year-old corruption probe known as Lava Jato, which is upending politicians and businessmen.

Former president Lula da Silva, who is a suspect in a corruption case but who wants to make a comeback, said on Saturday: “What we want are direct elections. We want Temer to leave soon.”

A President in Disgrace

President Michel Temer is facing new pressure to resign, after Brazil’s supreme court said prosecutors are investigating him for obstruction of justice and corruption, and a government witness claimed his company paid US$ 1.5 million to Temer in bribes.

A day after the release of surreptitious audio recordings in which Temer seemed to condone a criminal cover up in the “Car Wash” investigation, the court released testimony accusing him of soliciting illegal payments from meatpacking firm JBS.

The court also put out new videotape accusations by the company’s chairman claiming former presidents Dilma Rousseff and Luiz Inácio Lula da Silva each received tens of millions of dollars in dirty money from the company. He claimed the illegal payments were destined for campaign slush funds.

Temer has told Brazilians he’s done nothing wrong, rejecting calls for his resignation Thursday in a defiant statement on national television. But the new charges have left his survival more imperiled than ever, and the country’s influential newspaper O Globo called on him to step down in an editorial Friday.

The two-day cascade of scandalous news has deepened Brazil’s misery, crashing financial markets and wiping out incipient signs of recovery from the country’s worst economic slump.

It is not the first time Temer, Lula and Rousseff have been accused of wrongdoing by witnesses cooperating with the Car Wash probe, which has jailed and disgraced dozens of business executives and politicians and uncovered billions in kickbacks. Many of the accused have turned to snitching on one another or wearing recording devices in hopes of ducking prison.

For three years Brazil has been gripped by the sprawling investigation, named for the humble carwash that first alerted authorities to extensive networks of graft. Crusading federal prosecutors say they must drain the swamp of kickbacks, bribery and cronyism that are swallowing the country’s political system.

The latest plea-bargain testimony to become public was provided by meat industry tycoon Joesley Batista and another company executive. They claim that their firm funneled around US$ 150 million to Lula and Rousseff. Both former presidents have long maintained their innocence.

Rousseff was impeached last year on a separate allegation of budget irregularities and was replaced with Temer. At the time, it seemed that Brazil had hit rock-bottom. But this week’s revelations have put the country right back in a hole.

The Temer allegations risk a new drawn-out legal fight and the undermining of his economic program – a combination of spending cuts and pension reforms that were Brazil’s best hope for luring back foreign investors.

By defying calls to step down, Temer appears to be betting he can muddle through the latest scandal and serve out the remaining 16 months of his term, analysts said. But with rumors circulating of additional recordings yet to be released and calls for his removal growing louder than ever, he may be too crippled to effectively govern, analysts said.

The latest scandal began on Wednesday, when O Globo newspaper said it had obtained an explosive recording in which Temer supported corruption. 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.

On the recording, Batista informs Temer that he’s been making payments to buy the silence of jailed former congressional leader Eduardo Cunha, who is serving a 15-year term for corruption. The Brazilian president is heard telling the business executive to “keep that up.”

On Friday, after the recording was released, analysts said it did not appear to be as damning to the president as initially thought. Temer’s defenders will probably assert that his words merely indicated a desire to provide moral support for Cunha. But while that may be enough for Temer to avoid a conviction, the episode has left him so damaged that he may be unable to regain the backing of the allies in congress he needs to pass his austerity measures.

Even top officials from Temer’s inner circle appear to be hedging against his survival. Economic minister Henrique Meirelles told investors Friday he believed Temer would be able to hold on to power, but that he was also willing to stay on under a different administration to limit the impact of the political turbulence on the market.

There are several ways Temer could fall. One immediate risk to his presidency may be Brazil’s electoral courts which are considering whether to annul the country’s 2014 election result over allegations of illegal campaign donations. Temer ran as vice president on Rousseff’s ticket that year, though the two are not from the same party



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