Brazil's leader mounts defense to save his presidency

Brazil's top court released plea-bargain testimony on Friday accusing President Michel Temer and his two predecessors of receiving millions of dollars in bribes, the most damaging development yet in a historic political corruption probe.

The accusations by Attorney General Rodrigo Janot relate to the release this week of an audio recording that allegedly shows the president tried to derail a massive corruption investigation known as "Car Wash".

Temer spoke in a national address after Globo newspaper reported Wednesday night that Temer was recorded saying he supports payments to former Lower House Speaker Eduardo Cunha.

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 sentence for taking bribes.

Many believe that Cunha, who was widely viewed as Brazil's most powerful politician before being ensnared in several corruption cases, could provide damaging testimony about dozens of others if he reaches a plea bargain with investigators.

The scandals that have engulfed Brazil's political class and many business elites reduce the chances that Temer, a conservative who took office after leftist former President Dilma Rousseff was impeached previous year, can push through economic reforms crucial for Latin America's biggest country to recover from its worst recession on record.

The ongoing scandal deepened at dawn on Thursday as police searched the Rio de Janeiro home and Brasilia office of Senator Aecio Neves, who almost won the presidency in 2014 and planned to run again next year. More anti-Temer protests were planned this weekend.

Temer has until now enjoyed a solid majority in congress through his centre-right PMDB party, the PSDB social democrats and a string of smaller parties.

Joesley Batista also tells Temer that he was "holding back" judges and was trying to "change" a prosecutor who was investigating the president.

Temer's administration has been embroiled in corruption scandals since it came into power a year ago after ousting Rousseff in what many both in Brazil and internationally have labelled a parliamentary coup.

The scandal is the latest shockwave from the wider "Car Wash" graft probe ripping through Brazilian politics. The presidency also didn't immediately respond to queries seeking comment about the latest revelations.

In the supreme court I will demonstrate I had no involvement at all with these facts.

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.

The Federal Supreme Court has approved a probe into the possible obstruction of justice by the president.

JBS company owner Joesley Batista says in a plea bargain testimony released Friday that former Finance Minister Guido Mantega was the middleman in the operation to channel illegal funds for both politicians.

Temer has denied any wrongdoing and said he has no plans to step down from office.

Stock losses were led by state-controlled petroleum company Petrobras and Banco do Brasil, which fell around 20% and 25%, respectively. Batista also didn't state for which campaigns the money was transferred.

A bombshell report reveals recorded telephone calls that implicate Brazilian President Michel Temer and others in a long-running corruption scandal.

Valor cited an unnamed source saying that Brazilian regulators CVM had become aware that the Batistas' group of companies acquired a USA dollar position that could have exceeded $1 billion in the local currency market hours before the plea deal news broke.

  • Zachary Reyes