Brazil’s president Michel Temer . Picture: REUTERS/ADRIANO MACHADO
Brazil’s president Michel Temer . Picture: REUTERS/ADRIANO MACHADO

Brasilia — Brazil’s President Michel Temer has been hit with a second set of criminal charges, as corruption allegations continue to plague his scandal-tainted administration.

On Thursday, in an e-mail, the office of the chief public prosecutor, Rodrigo Janot, formally accused Temer of obstruction of justice and criminal conspiracy, saying he and several of his closest aides took kickbacks worth 587-million reais ($188m) from government contracts.

In a statement, the presidential press office said that Janot had "accepted false and lying testimony" and that his team ought to be investigated. It added that the president was "certain that, at the end of all this process, the truth will prevail".

The highly anticipated charges ends a week in which the CEO of the world’s largest meat packer and a former governor were arrested, the agriculture minister’s apartment was raided, and former President Luiz Inácio Lula da Silva testified in court on corruption charges.

Temer, who has repeatedly denied any wrongdoing, needs the support of just more than a third of congress to block the case from going to trial at the supreme court, a move that would force him to stand down from the presidency. Barring further unexpected developments, most congressional leaders and analysts say he is likely to survive the vote, as he did on separate charges of bribe-taking in August.

"The consistency and the robustness isn’t the same as the first charge against President Temer," said senator Ronaldo Caiado, a fierce government critic from the DEM party. "But the fragility of his coalition is worth watching. There’s unhappiness among those who support Temer which could cause him problems in Congress."

The iShares MSCI Brazil exchange-traded fund trading was virtually unchanged from the previous day in after-hours trading. Recent indicators suggested that Brazil was emerging from its worst recession on record.

What is not clear is whether the process of mustering the necessary backing will distract the ruling coalition from Temer’s pledge to pass key economic reforms, including a bill to cut pension outlays and another to simplify taxes. While finance minister Henrique Meirelles said he still expects a controversial pension reform to go for a vote in October, lower house speaker Rodrigo Maia said lawmakers will have to first focus on the charges.

While Temer and his allies in congress have expressed confidence in beating the charges, securing the votes to block a trial of the president for a second time may not come cheap, according to Thomaz Favaro, from the consultancy Control Risks. "Definitely there’s a cost associated with his defence," he said. "It doesn’t rule out reforms, but it will certainly delay things."

Janot’s charges are based largely on testimony by a broker who says he moved funds for Temer and his aides in the ruling PMDB party, and by meat-packing mogul Joesley Batista, who claims Temer authorised him to pay hush money. Batista has been imprisoned and his plea bargain has been suspended over alleged irregularities.

This week’s headlines show that the three-year, anti-corruption purge and resulting political uncertainty is far from over and will likely dog the Temer administration through the end of its term in December 2018. On Tuesday, the Supreme Court authorised an investigation into yet further allegations of corruption against Temer involving a presidential decree relating to Brazil’s ports. Temer has repeatedly denied wrongdoing.

All the probes, arrests, and charges have numbed many Brazilians, reinforcing the wide-spread perception that the country’s entire political class is self-serving and corrupt. That may fuel the rhetoric of tough-talking outsiders, such as former army captain Jair Bolsonaro, who is placed second in voter intention polls for next year’s general election.

Bloomberg

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