Special aide to Brazil's Temer arrested in corruption probe

The scandal has threatened to tear apart Temer's coalition in Congress and leave Latin America's largest economy adrift as the president fights for his political survival, just a year after the impeachment of his predecessor.

The Supreme Court had been due to rule this Wednesday on a request by Temer for the investigation to be suspended pending analysis of what the president claims was the doctoring of the recording at the center of the case.

That politician - former lower house speaker Eduardo Cunha - is in prison after being convicted of bribe-taking in a sprawling anti-corruption drive named operation "Car Wash".

"If they want to, then they have to force me out, because if I resign, that is an admission of guilt", he said in an interview with Folha newspaper.

Filippelli, of the ruling party of the Brazilian Democratic Movement (PMDB), was arrested along with former governors Agnelo Queiroz and José Roberto Arruda and seven others, all of them alleged beneficiaries of a corruption scheme that facilitated over-invoicing of the works of the National Stadium Mane Garrincha.

Mr Temer also questioned the motives of the man who made the recording, JBS meatpacking company executive Joesley Batista.

Temer says his administration will petition the Supreme Federal Tribunal to suspend the investigation against him until the audio is verified.

Other cases of fraud linked to the 2014 World Cup are also under investigation, as testimony as part of corruption probes from executives of Brazil's largest construction conglomerate, Odebrecht, revealed suspected overcharge schemes in another five of the 12 soccer stadiums built or renovated in the lead up to the high-profile global soccer event.

Still, Temer maintained a confident outlook, telling Folha he was "absolutely" sure he was capable of finishing his term through the end of 2018 without giving up on his legislative agenda, which includes an ambitious overhaul of the country's labour and social security regulations.

That investigation is related to a sprawling probe into bribery and kickbacks at state oil company Petrobras that helped topple former President Dilma Rousseff a year ago and has sent dozens of senior politicians and business to jail.

S&P Global Ratings has said on Monday that it could cut Brazil's rating further into junk territory.

JBS shares on May 22 plunged R$2.73 reals, or 31%, to R$5.98 reals ($1.83) in trading on Brazil's stock market.

"I will demonstrate political strength in coming weeks precisely by putting important bills to vote (in Congress)", Temer told Folha.

However, Temer's lawyers said that they no longer are asking for a suspension because they are satisfied that the court is making analysis of the disputed recording a priority.

On Monday, senior PSDB member and former president Fernando Henrique Cardoso said that the party's initial impulse to abandon Temer immediately should be rethought.

Batista secretly recorded the conversation with the president, and used it to negotiate a plea bargain.

  • Zachary Reyes