Brazilian President Says He Won't Resign Over Hush Money Allegations

Gladys Abbott
May 19, 2017

Ironically, Temer has used the positive economic indicators during his 1-year tenure as Brazil's President to defend himself.

It was, however, just one piece of evidence Batista has offered prosecutors, with more to be released soon.

Globo reported late on Wednesday that Mr Neves had been recorded asking JBS meat-packing company executive Joesley Batista for 700,000 United States dollars (£540,000) to pay for his "Car Wash" defence.

Trader Thiago Castellan at São Paulo-based Renascença brokerage said: "For the market, it's not a question of whether Temer will be ousted or not".

Even when a third of his own cabinet was placed under investigation, he was unscathed, protected by presidential immunity for alleged acts prior to his mandate.

Brazilian stocks tumbled at the news, both chambers of Congress canceled their sessions and Temer reportedly cleared his schedule. Brazil's currency the real lost over seven percent of its value against the United States dollar, wiping out all its gains so far this year and government bomb prices were hit.

Brazil's Treasury and central bank said they stood ready to keep markets liquid before acting to smooth volatility in local currency and bond markets.

"I can't see how Temer survives this", said David Fleischer, a political science professor at the University of Brasilia. "He will likely lose all political support".

Officers in the southern city of Curitiba searched the home of federal deputy Rodrido Rocha Loures, a longtime confidant of Temer and a member of the president's party.

In a memo to the Wall Street Journal, Temer's administration denied that it ordered the payments be made.

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According to the Globo report, Batista secretly recorded the conversations with Temer and Neves and gave them to justice officials as part of plea bargain negotiations. Cunha is now in jail due to his involvement in the corruption scandal that rocked the nation in recent years.

"Wal-Mart's commitment to value pricing is driving traffic and growth in grocery and aggressive online strides are impacting comparable sales", Cowen & Co's senior research analyst Oliver Chen said in a note, Reuters reported.

"Our entrepreneurial spirit and huge will to work in the face of a Brazilian system that presented us with several difficulties to sell our products, led us to make the choice to make inappropriate payments to public agents", he said in a statement Thursday.

"The reform agenda is back to zero, everything is up in the air because it was being coordinated by the government and its coalition is losing backers", the aide said.

The report immediately sparked calls from leftist opponents of Temer for his impeachment.

While many in the country are undoubtedly yearning for more stability, revelations of such widespread corruption throughout the vast majority of the political elite is hoped to bring cultural and legal changes to end the worst of these abuses.

Activist groups from across the political spectrum took to social media, calling for protests this weekend. Because of this, risk to the downside has increased, and there is a large amount of uncertainty that Temer may not finish his term.

Also on Thursday, federal prosecutor Rodrigo Janot asked the Supreme Court's permission to arrest Senator Aecio Neves on allegations he asked Batista for bribes.

Local newspaper O Globo alleged on Wednesday that President Michel Temer, who had been beset by accusations of corruption since he took over from Dilma Rousseff a year ago, had been recorded talking about making payments to former House of Representatives (Chamber of Deputies) Speaker Eduardo Cunha.

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