Brazil president lambastes testimony by JBS executives

CVM declined to give details on the probes but said they were opened on Wednesday and Thursday, after leaked details of the plea testimony accusing President Michel Temer of taking millions in bribes led to the biggest currency losses in almost two decades.

The attorney general's formal presentation of evidence is the latest revelation related to a secretly recorded audio that purportedly captured Temer endorsing the paying of hush money to an ex-lawmaker now serving a 15-year prison sentence for corruption.

Audio recordings, provided by Batista to police and publicly disclosed this week, implicated President Michel Temer in one of a string of corruption scandals that has engulfed vast swaths of Brazil's political class and business elites for more than three years. When asked by Batista about his relationship to Eduardo Cunha, some of the responses given by Michel Temer are unintelligible in the recordings.

If Temer is eventually forced to resign or is impeached, Brazil's constitution calls for the leader of the lower house to temporarily take over and for Congress to name a successor within 30 days. Opposition politicians including Sen.

The president's office denied he had done anything improper but investors are running scared. "I expect a thorough and quick investigation to clarify what happened before the Brazilian people", Temer said on May 18 in a televised address, after rejecting all allegations against him.

The Sao Paulo stock market reacted in panic Thursday to the specter of Brazil losing its second president in just over 12 months, with trading suspended briefly after the Bovespa index crashed more than 10 percent.

"All signs point to the end of the government: the opening of inquiry in the Supreme Court, allies abandoning the president, and critical media coverage", said Mauricio Santoro, a political scientist and professor of external relations at Rio de Janeiro State University.

A Batista's plea bargain, he also told authorities that he transferred 150 million to offshore bank accounts for campaigns of President Luiz Inacio Lula da Silva and his successor in the presidency, Dilma Rousseff.

He said the tape proved he had not approved bribing the witness, former lower house speaker Eduardo Cunha.

After the Globo report on Mr Temer, Brazil's highest court opened an investigation into the accusation late on Thursday and lifted the seal on the almost 39-minute recording, which is scratchy and often inaudible.

The release of the tapes has caused a political firestorm in Brazil, with one of the nation's leading newspapers calling in strongly-worded May 19 editorial for Temer to step down and mass protests around the country demanding the same. It has been interpreted as referring to bribes given to Cunha to make sure that he doesn't talk to prosecutors himself.

Temer, for his part, either murmurs apparent approval or simply listens without making any comment, behaviour that legal analysts have interpreted as explicit support for the unlawful actions.

The string of corruption scandals centres on political kickbacks in exchange for firms winning contracts at state-run enterprises, especially at oil company Petrobras. Queiroz said that after that denunciation, Temer is pressured by society - on the ethical side - and also by the market that was supporting the government, because he is no longer able to offer what he promised.

Even a former chief justice of the Supreme Court, Joaquim Barbosa, called for Temer's head. "Brazilians must mobilise, must take to the streets to forcefully demand the immediate resignation of Michel Temer", he said on Twitter.

Overall, the Car Wash probe has led to more than 90 convictions of businessmen and politicians and prompted the investigation of dozens of sitting Congress members and a third of Temer's cabinet.

Ironically, the legislature that now holds Temer's fate in its hands is itself riddled with corruption scandals uncovered by "Car Wash" investigators.

  • Joanne Flowers