Brazil’s president Michel Temer has vowed to fight for his political life after the supreme court approved an investigation of allegations that he condoned hush money pay-offs to a witness in a sprawling corruption scandal.



“I will not resign. I repeat: I will not resign. I know what I did,” he said in a live TV broadcast, amid growing calls for him to stand down following the suspension of one of his closest confidants in Congress and most powerful coalition allies in the Senate.

The moves on Thursday followed explosive claims that he was secretly taped discussing hush-money payments to former House speaker Eduardo Cunha, who was jailed for his role in the massive Petrobras corruption scandal, prompting calls for him to step down or be impeached.

The Brazilian stock market plunged by 8.8% on the news and the real fell 8.5%.

Following last year’s dubious impeachment of Workers’ Party leader Dilma Rousseff and the ongoing trial of her predecessor Luiz Inácio Lula da Silva, Brazil has now been plunged even deeper into turmoil.



A string of prominent politicians across the political spectrum have been sucked into the burgeoning scandal – the latest offshoot of the Lava Jato (Car Wash) investigation – which has prompted fury across the nation and dismay on the stock markets. The Bovespa index plunged 10% at the opening and is on course for its worst day since the 2008 global financial crisis.

The latest to fall in the country’s seemingly never-ending turmoil was former presidential candidate Aecio Neves, who on Thursday was stripped of his seat in the Senate.

Neves, the candidate for the centre-right Brazilian Social Democratic Party (PSDB) in the 2014 presidential election, was secretly taped requesting 2m reais in bribes, from the country’s biggest meat-packing firm JBS, according to O Globo newspaper.

Federal police reportedly filmed the payment to the senator’s cousin and then tracked the money to a bank account of a company belonging to Zeze Perrella, who –like Neves – is a PSDB senator from the state of Minas Gerais.

One of Temer’s confidants, congressman Rocha Loures, was also removed from office following reports that he negotiated bribes worth 500,000 reais a week for 20 years from JBS in return for the president’s intervention with the fair trade office.

The suspensions follow leaks of the explosive contents of the deal struck between prosecutors and the two brothers who run JBS, Joesley and Wesley Batista. They are said to have provided testimony and covertly recorded conversations that incriminate the president, the former finance minister, and other senior figures.

Temer is said to have been taped discussing hush-money payments to Eduardo Cunha, whois in the same ruling Brazilian Democratic Movement Party as Temer and initiated the impeachment of Dilma Rousseff that allowed him to seize the presidency. He has often alluded to the many secrets he knows about his former colleagues.

In covert recordings made during two conversations in March, Joesley tells Temer he is paying Cunha to keep him quiet, to which the president allegedly replies, “You have to keep it going, ok?”

At a morning meeting with ministers and aides, Temer insisted he would not resign, but the subsequent decision by the supreme court to accept the tapes as evidence puts him in a difficult position.

Planalto, the presidential palace, earlier denied the accusation. “President Michel Temer never solicited payments to obtain the silence of former deputy Eduardo Cunha. He neither participated nor authorised any activity with the objective of preventing testimonies or cooperation with justice officials by the parliamentarian,” it read.

The supreme court has not commented, but its suspension of Neves and Lourdes appears to confirm the veracity of the leak, and the news has enraged Brazilians.



Protesters against Brazilian president Temer gather in Sao Paulo. Photograph: Fernando Bizerra Jr/EPA

Shouts and pot-banging (a traditional form of protest in Latin America) can be heard in Rio de Janeiro, Sao Paulo and other cities whenever new details or denials are aired on TV. Crowds gathered on Wednesday night outside the presidential palace chanting “Fora Temer” (Temer Out). At least two congressmen have submitted impeachment motions in the lower house.

The latest judicial clean-out of the country’s rotten political hierarchy has raised the possibility of Brazil unseating its second president in less than a year. Although Temer is shielded from impeachment by the ruling coalition’s large majority in Congress, there is intense pressure on him to step down.

Mara Telles, of the Federal University of Minas Gerais, said the president was fatally wounded. “The Temer government is over, there is no possibility of its survival.”

Even before the latest claims, Temer’s administration was in crisis. Three of his ministers have been forced to resign and eight others are implicated in the Lava Jato corruption investigation. The president’s approval ratings have fallen to single digits, the economy remains mired in recession and opponents recently organised a general strike in protest at his austerity policies and proposed changes to pension, labour and environmental laws. The electoral court is also due to rule on campaign violations in 2014 that could force a re-run.



What and who comes next is already under discussion.

If Temer were to step down or be removed, the next in line would be the leader of the lower house, Rodrigo Maia, though there are also moves to bypass the corruption-tainted legislature by elevating the chief justice, or holding fresh elections.

There are already back-door moves to elevate chief justice Carmém Lúcia to the presidency because a majority of congressmen are implicated in the corruption scandal.



But Telles said new elections would be preferable. “The best way to reduce the effects of the political crisis and reinvigorate the legitimacy of the political system would be to hold direct elections at all levels,” she said.

While the political world is discredited, the judiciary is in the ascendent. Nara Pavão, professor in the Political Science Department at the Federal University of Pernambuco, said she expects Temer to resign, Neves’ political career to be over, and for the Workers Party – which had previously been the chief target of corruption investigations – to accept that the judiciary is impartial.

“This has a symbolic importance because for the first time it is clear that the Lava Jato operation is not selective and that it also involves other members of government who are not Workers Party allies,” said the academic. “It will have a significant impact on public opinion, now more than ever. If it wasn’t already clear before that corruption is not just a problem of the Worker’s Party, it is definitely clear now.”