Brazilian president shrugs off corruption probe fallout

Eugenia LOGIURATTO with Damian WROCLAVSKY
Brazil's President Michel Temer came to power in 2016 after president Dilma Rousseff was impeached for illegally manipulating government accounts to mask the depth of economic problems

Brazil's president brushed off a growing corruption crisis Wednesday after the Supreme Court ordered scores of graft investigations, targeting at least eight ministers and a third of the Senate.

The scandal, likened by Brazilian commentators to a political earthquake or bomb, shook the core of President Michel Temer's already deeply unpopular government and his allies in Congress.

Close to 100 politicians are being targeted, according to a Supreme Court document.

However, Temer insisted that Brazilian politics would ride out the crisis.

"The government will not stop," he said in a speech. "The executive will make executive decisions, the legislature will legislate and the judiciary will judge."

All the politicians are suspected of involvement in a massive embezzlement and bribery conspiracy that fleeced state oil company Petrobras and funneled dirty money into leading political parties' election war chests.

The so-called Car Wash investigation has already been running three years. But the latest wave of allegations -- which are not formal charges -- stem from recent testimony in plea deals by 77 executives at Odebrecht, the construction company at the heart of the scandal.

About a third of Temer's cabinet is targeted. Eight ministers will be investigated and possibly a ninth, according to court documents.

The list includes the president's chief of staff Eliseu Padilha and the ministers of foreign affairs and agriculture, as well as the speakers of both the lower and upper houses of Congress.

More than 40 deputies in the lower house are on the list.

- Congress in upheaval -

Congress abruptly emptied late Tuesday when the news broke as lawmakers avoided the media.

The empty chambers symbolized the problems that Temer may now have in maintaining his close working relationship with the legislature as he tries to enact pension reform and other austerity measures aimed at dragging Brazil out of a historic recession.

The presidency insisted that it was not in any danger and that it had been warned via numerous media leaks that the deluge of probes was coming.

"There are no new facts and the names had already been mentioned. The government will keep working. Now it is a question of each individual minister defending himself," a source at the presidency, who asked not to be identified, told AFP.

However, political analyst David Fleischer at the University of Brasilia said Temer is in trouble.

"He will be even weaker and perhaps will lose control of his support base in Congress where many are desperate and are eying their chances of reelection in 2018," he said.

"This episode will delay and complicate approval of reforms," with investors backing off for a "wait and see" period, Fleischer said.

Cesar Carvalho at CAC consultants said Temer in his speech "was doing what the playbook says."

- Presidential casualties -

Very few big Brazilian politicians escape the list, including no less than four former presidents.

They are former leftist presidents Luiz Inacio Lula da Silva and Dilma Rousseff and two earlier presidents, Fernando Henrique Cardoso and Fernando Collor.

Also targeted is Aecio Neves, who heads the centrist PSDB party and narrowly lost Brazil's last presidential election to Rousseff, who was herself impeached last year and replaced by Temer.

Temer does not show up on the list but he has previously been named in testimony alleging illegal transfers of campaign funds from Odebrecht to his center-right PMDB party.

Lula already faces five separate Car Wash-related trials. He leads polls for possible reelection in Brazil's 2018 presidential vote but his legal troubles could bar the way.

On May 3 he will face Car Wash's chief judge, Sergio Moro, in the city of Curitiba where the graft investigation is based.

Another prominent name on the list is Eduardo Paes, who was mayor of Rio de Janeiro during last year's Olympics. He is alleged in plea bargain testimony to have taken some 15 million reais ($4.8 million) in bribes.

The former Odebrecht employees, including ex-CEO Marcelo Odebrecht, have confessed to systemic bribery of politicians in exchange for inflated contracts with Petrobras and favorable legislation in Congress. The money went either directly into politicians' pockets or into party campaign slush funds.