Brazilian shares tumble on fears president could be ousted

Carla Harmon
May 19, 2017

Globo also reported that Batista had recorded Temer endorsing a bribe to silence Cunha.

"I repeat: I will not resign", he said, speaking in Brazilian capital Brasília.

Temer's situation grew more perilous after the Supreme Court approved an investigation into allegations against him, according to a source with direct knowledge of the decision.

Brazil's Bovespa stock index lost 9 percent, its steepest fall since the 2008 financial crisis, on concerns the investigation could derail Temer's sweeping fiscal reforms. Brazil's currency the real lost over seven percent of its value against the USA dollar, wiping out all its gains so far this year and government bomb prices were hit.

(AP Photo/Silvia Izquierdo). Demonstrators confront police during a protest against Brazil's President Michel Temer in Rio de Janeiro, Brazil, Thursday, May 18, 2017.

Authorities released photos of Loures receiving 500,000 reais from a JBS employee, though Loures denied any wrongdoing. The country's supreme court says it's going to investigate. These corruption allegations are only the latest to hit people at the very top of Brazilian politics, if we look at the tenures of the previous two presidents, Luiz Inacio da Silva and Dilma Rousseff.

O Globo newspaper reported that Joesley Batista, chairman of meatpacking giant JBS SA, recorded a conversation with Mr. Temer in which the president indicated Mr. Batista should continue to pay the former legislator, Eduardo Cunha.

It remained unclear whether Temer's defiance will be enough, with cracks growing in the ruling coalition, which is centered on Temer's PMDB party and the PSDB Social Democrats, along with a coalition of smaller parties.

National news outlets like O Globo, Estadao and Valor Economico all reported that the investigation would move forward, though the court itself has refused thus far to comment.

Should Temer suffer the same fate as Rousseff, the South American powerhouse would be plunged ever deeper into political chaos.

If confirmed, the tape could prove devastating for Temer, whose administration has lurched from one crisis to another since he took office just over a year ago.

In the recording, offered as evidence in a plea bargain between Batista and his brother Wesley with prosecutors, Temer allegedly can be heard telling Batista: "You need to keep doing that, OK?" Aecio Neves, who almost won the presidency in 2014 and planned to run again next year.

At the same time, a massive corruption scandal involving the state oil company Petrobras was unfolding. Both chambers of Congress cancelled sessions and Temer's office canceled his planned activities.

Congressman Alessandro Molon, from the Rede party, filed a demand for impeachment with the speaker of the lower house, Rodrigo Maia.

Batista told Temer that he was paying money to make sure that Cunha - thought to have encyclopedic knowledge of Brazil's notoriously dirty political world - would keep quiet while serving his jail sentence for taking bribes. Rousseff had even appointed Lula as a cabinet minister in order to give him legal immunity from prosecution during the Petrobras scandal, but that was later blocked by a judge.

Globo's reports are the latest in numerous scandals that have plagued Temer, whose approval ratings are hovering around 10 percent.

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