Brazil's president resists calls to resign amid new bribery allegations
By Gong Rong

2017-05-20 09:08 GMT+8

Brazil's top court released plea-bargain testimony on Friday accusing President Michel Temer and his two predecessors of receiving millions of dollars in bribes, the most damaging development yet in a historic political corruption probe.

The testimony made public by the Supreme Court is from executives of the world's largest meatpacking company, and raises serious doubts about whether Temer can maintain his grip on the presidency.

The scandals that have engulfed Brazil's political class and many business elites reduce the chances that Temer, a conservative who took office after leftist former President Dilma Rousseff was impeached last year, can push through economic reforms crucial for Latin America's biggest country to recover from its worst recession on record.

Brazilian President Michel Temer (R) leaves the Jaburu Palace official residence towards Planalto Palace in Brasilia, on May 19, 2017./VCG Photo

The Supreme Court on Thursday said it approved an investigation of Temer for corruption and obstruction of justice. Calls for his resignation intensified, including an editorial in the O Globo newspaper, which is normally criticized by leftists for backing conservative politicians.

"This is easily the worst moment in Brazil since we returned to democracy," said Claudio Couto, a political scientist at the Getulio Vargas Foundation, a top university, calling the claims "the mother of all plea bargains."

"This testimony is hitting everyone, all the major political players and, most importantly, a sitting president," he added.

The revelations came from testimony given by executives at JBS SA. Once a small meat producer, JBS grew exponentially during 13 years of government by former President Luiz Inacio Lula da Silva and Rousseff's Workers Party, primarily through acquisitions funded by low-cost loans from Brazil's development bank.

Protests against Michel Temer at Paulista avenue in Sao Paulo on May 18. /VCG Photo

The JBS executives said they made about 500 million reais (154 million US dollars) in illegal payments to politicians and bureaucrats in recent years in exchange for winning contracts, getting easy credit from state-run banks and resolving tax and other disputes with the government.

In addition to the three presidents, congressmen, ministers and several governors and mayors of major cities were named in the testimony. It implicates ruling and opposition parties alike.

According to the testimony, JBS paid Temer 15 million reais (4.6 million dollars) in bribes. It also alleges that Lula, who is already facing five corruption trials, received 50 million dollars in bribes in offshore accounts from JBS, while Rousseff took 30 million dollars in bribes, also in offshore accounts.

President Michel Temer delivers a statement on May 18, 2017, in Brasilia, Brazil. The statement followed the release of a recording of Temer allegedly condoning bribery payments to Eduardo Cunha, the former president of the Chamber of Deputies. /VCG Photo

Lawyers for Lula said he was innocent. Rousseff denied any wrongdoing in a statement.

The corruption scandals that have polarized Brazil center on political kickbacks in exchange for firms winning contracts at state-run enterprises, especially at oil company Petrobras.

Supreme Court Justice Edson Fachin wrote this week that an immediate investigation into Temer was required because the alleged criminal practices "are underway or about to occur."

They have led to over 90 convictions of businessmen and politicians and prompted the investigation of dozens of sitting congressmen and a third of Temer's cabinet.

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

(Source: Reuters)