Published: Fri, May 19, 2017
Global Media | By Meredith Barber

Brazil's president may lead a 'walking dead administration'

The Brazilian real plunged against the dollar Thursday and stocks plummeted as the country's Supreme Court approved an investigation of President Michel Temer following a report he encouraged a businessman to continue bribing a jailed former congressman to buy the lawmaker's silence, putting the future of his government and the approval of key economic overhauls by Congress at risk. He says he won't resign, and he wants a full and fair investigation.

"At no time did I authorize the paying of anyone", Temer said, raising his voice and pounding his index finger against the lectern.

Temer's office issued a statement saying: "President Michel Temer never solicited payments to obtain the silence of former deputy Eduardo Cunha". Rousseff was not directly implicated; Temer, however, was accused of participating in the graft.

If he resigned or was pushed out in impeachment proceedings, lower house speaker Rodrigo Maia-one of the many legislators being investigated in the "Operation Car Wash" probe - would initially take over.

The hush money allegations left Temer teetering barely a year after he took power in controversial circumstances, replacing his impeached predecessor, leftist president Dilma Rousseff. The recording is now part of evidence being examined by investigators, the report said. On Thursday, the Supreme Federal Tribunal, the country's highest court, suspended Neves from office indefinitely. The paper says that this tape is in the hands of prosecutors who have, for the last few years, been carrying out the so-called auto wash investigation.

Temer took over a year ago after the impeachment of president Dilma Rousseff, a political quake to a large extent engineered by the then-powerful Cunha.

The president was secretly recorded in March meeting Joesley Batista, known as the "slaughterhouse billionaire", according to O Globo.

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.

Brazil's stocks and currency tumbled throughout the day.

There is also a political ingredient, not only because of the Batista brothers generous handouts to the political system in exchange for different favors, but under ex president Lula da Silva, JBS turned into a world business player with the political and financial support from the government to become the huge world's leading company in its sector.

Ironically, the legislature that now holds Temer's fate in its hands is itself riddled with corruption scandals.

Brazil's Petrobras corruption and embezzlement scandal has enveloped the country's political elite - across party lines.

Temer replied: "You need to keep doing that, OK?"

"Resignation is the easiest way to resolve this", said Senator Ana Amelia, from the PP, who had supported Rousseff's impeachment previous year. He also told allied lawmakers that he would not be driven from office. Their aim is to channel the rising anger against the entire capitalist setup in Brazil back behind the discredited Workers Party (PT) and, in particular, the candidacy of Luiz Inacio Lula da Silva, the former metalworkers union leader who occupied the presidency from 2003 to 2010. The mission of another Lula government would be to contain the growing militancy of the Brazilian working class and keep it subordinated to capitalist interests.

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