Brazil Plunges Into Fresh Political Crisis After Temer "Hush Money" Recordings Emerge; Market Crashes

Tyler Durden's picture

The presidency of Brazil's Michel Temer, who replaced disgraced and impeached predecessor Dilma Rouseff last summer, lasted about one year without a major corruption scandal.

That changed tonight, when Brazil's O Globo newspaper which was instrumental in exposing the Carwash scandal which ultimately led to Rouseff's downfall and the arrest and incarceration of countless politicians, reported that the chairman of meatpacking giant JBS secretly recorded his discussion with Temer about "hush money" payments to jailed former House Speaker Eduardo Cunha in return for his silence.

Brazil's President Michel Temer

The allegations are the latest development in Operation Carwash, a sprawling corruption probe that has implicated many of Brazil’s business and political elite, including some in the president’s own party. Temer has repeatedly denied any wrongdoing.

Readers may recall that in a delightfully ironic case study of political irony and power vacuum, Eduardo Cunha, the conservative Brazilian political leader who led the push in 2016 to oust Dilma Rousseff, was sentenced in March to more than 15 years in prison himself, when a Brazil judge found him guilty of corruption, money laundering and illegally sending money abroad, all in connection with the sprawling graft investigation involving the state-run oil company Petrobras, and which Cunha himself used as a pretext to dispose of Rouseff.

The tragically ironic Cunha was the highest-profile politician to be sentenced as a result of the Operation Car Wash investigation into corruption at Petrobras, which has shaken Brazil’s political and business establishments to their core. Ultimately, he was convicted of charges that included receiving bribes during Petrobras’ acquisition of a Benin oil field for $35.5 million in 2011, and of money laundering crimes between 2011 and 2014. Yet somehow he was the man tasked with bringing justice to Rouseff.

Furthermore, Cunha, once a powerful member of Temer's ruling party, has previously said he had compromising information about a host of senior politicians linked to a vast political bribery scandal at state oil firm Petrobras. And yet he never spokeup.

Now, not only do we know why Cunha kept silent, but there is finally proof of a corruption link between Cunha and Temer himself.

According to the O Globo report, JBS Chairman Joseley Batista recorded the discussion with Temer about hush money the executive paid to Cunha, according to the newspaper. The report did not say what Cunha was asked to keep quiet about. When Batista told Temer he was paying Cunha to remain silent, the president was recorded saying, "You need to keep that up, okay?"

Batista and Temer

Temer on Wednesday acknowledged he had met with the JBS Chairman in March but denied any part in alleged efforts to keep jailed former House Speaker Eduardo Cunha from testifying.

According to O Globo, executives from JBS submitted a tape to the Supreme Court of a secret recording of Temer approving a payment to the abovementioned Cunha. Batista and his brother, JBS Chief Executive Wesley Batista, presented the recording to prosecutors as part of plea bargain negotiations underway since March.

Reuters adds that  JBS also hired a law firm to discuss a leniency deal with the U.S. Department of Justice. JBS declined to comment immediately.

To be sure, the presidential press office immediately issued a statement vehemently denying the allegations. "President Michel Temer never requested payments to obtain the silence of ex-deputy Eduardo Cunha," it said. "The president defends a deep and wide investigation to get to the bottom of the claims put forward in the media."

Unfortunately for Temer, Brazil appears to no longer believe politician lies, especially of Temer, whose approval rating is in the single digits. As a result, as Bloomberg writes, "Brazil has plunged back into political crisis, reminiscent of the chaos surrounding last year’s impeachment process."

Bloomberg adds that O Globo’s report caused an immediate stir in Congress, where opposition congressmen started to shout anti-government slogans. The session was subsequently suspended. Legislators from five opposition parties called for Temer’s resignation and early elections, according to a statement sent by the opposition leader in the lower house. Temer went to his official residence after an emergency meeting with some of his closest aides.

According to further press reports, legislators from 5 opposition parties have demanded Temer's resignation and call for new elections, according to statement from lower house opposition leader’s press office. And while the US spent much of the day talking about impeachment, in Brazil they actually did it: Rede party deputy Alessandro Molon filed an impeachment request against Temer, according to his press office.

The local authorities already know what's coming: amid growing protests in Brasilia on Wednesday evening, military police have moved into position around the presidential palace and one of the judges on Brazil’s Supreme Court has called for calm. "It’s a moment for calm, moderation and watching the institutions work," said Marco Aurelio Mello.

"We still need more information, but on the face of it there’s enough to say that it weakens substantially the government," said Andre Cesar, an independent political analyst. "I see a huge increase in the difficulties in approving reforms. Pension reform could take a step back."

The head of the Brazilian Bar Association, Claudio Lamachia, said in a statement that society needs immediate answers and that the alleged recordings need to be made public as soon as possible. "Brazilians can no longer live with doubts regarding their representatives," Lamachia said.

On Wednesday evening, people were already lining up on the streets of Sao Paolo, preparing to protest against Temer:

Meanwhile, the same market which soared last year after the Rouseff impeachment, for some still unknown reason, is now plunging on the news. A Brazilian ETF trading in Tokyo, tumbled more than 8% on the O Globo news, its biggest drop since September 2015.

At this point it is unclear if there is any politician left in Brazil who has not been tainted by the Carwash scandal; it is also not clear who could possibly replace Temer when he too is kicked out of office, in light of the unprecedented power vacuum on all sides that currently exists in the Latin American country.

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peddling-fiction's picture

Payback is a bitch...

Manthong's picture

The CIA is about to lose another asset.

AltRight Girl's picture

Just legalize marijuana and the plebs will forget about it

That's how DemocRATs states hide corruption here in US.

Beggars Overrun Colorado Town, Residents Blame Legalized Marijuana

zhandax's picture

Dipshit may have a point here...first banana republic stooge that didn't have a finger in the Carwash Pie to also promise to legalize weed will have all the favelas sewed up...if such a stooge exists.

meta-trader's picture

she was a waitress in a cocktail bar now she owns a jet...

peopledontwanttruth's picture

A house divided against itself will fall. The whole world is coming apart. All these puppeticians have dirt on them and it's only a matter of time until it gets turned on them.

Soon every man/woman for themselves as the animalistic traits will be exposed.

Blood is thicker than water

Dilluminati's picture

oh those crooked motherfuckers, imagine politicians crooked cocksuckers in brazil no less

Dun_Dulind's picture

Brazil's only good for /r/watchpeopledie videos, Miss Bum Bum competitions, and epic stories of political corruption.

What a shithole.

MK13's picture

Hey Brazil is just preview of future US - except US is a lot more boring. Get ready zerohedgies...

Cosmic Energy's picture

This is not an exclusive Brazilian shithole, it is a worldwide shithole with Washington, London and Tel Aviv in the lead and pole position.

SeuMadruga's picture

Forget about it, man ! You guys'll never catch-up with us braz-ill-ians on this race-to-the-bottom(less) sewer pits... :-(

Ilmarinen's picture

Ofc the corruption itself is a goddamn disgrace, but I think this exists everywhere. What's cool is to see corruption being brought to light and actually resulting in high level officials getting meaningful jail time.  Wish we could have some of that around here...

Cosmic Energy's picture

The people around the world has to give up the idea that these criminal, corrupt puppets are here for the people. They do all right, they just serve their sinistre masters, thats all. Stop voting, ignore elections, do not feed this evil system against humanity.

If you want to see changes - take your life in your own hands!

SeuMadruga's picture

We brazilians have no doubts about our politicians.

Only certainties.

peddling-fiction's picture

Once I read that Temer was scared by "ghosts" in the Presidential residence, and moved to the VP's residence, I knew it did not look good for him. Someone put him in his place, so to speak.

essence's picture

I recall just a couple years ago it was all the rage to say that Temer was the elite's replacement for Dilma
(sort of a Brazilian Mike Pence)
Pepe Escobar had a few kanipshit articles espousing how Brazilian democracy was subverted by the U.S. deep state rousting a duly elected leader.... hmmm, now that I think about it, it feels vaguely applicable to other, more timely settings. Give me a moment, I'll think of what that is exactly :)

But even then, there were reports the vice pres Temer was also corrupt.
I suspected it only a matter of time before corruption probes honed in on Temer.
Sure enough, here it comes.

HowdyDoody's picture

There was an investigation into Temer's corrupton before Dilma's impeachment. The key judge died in a mysterious air crash (seems awfully Corrupt Imperialist Asshole-ish) which halted the investigation long enough.

ebworthen's picture

Look, things are fine in South America, North America, everywhere.

Economy on fire, no problems, no inflation, no corruption, no lack of career employment.

Catch that next Skittle shitting Unicorn riding over the rainbow, and pay no attention to that man behind the curtain!

mctimm's picture

What do you expect from a nation of thieves and murderers?


Great Deceivah's picture

another (((deep state puppet))) bites the dust. but don't worry... Goldman Sachs probably has a replacement already 

Yars Revenge's picture

Get rid of politicians and replace them with robots.

Corruption problem solved.

el buitre's picture

I am sure Eric Schmidt, Ray Kurzweil, and DARPA will program these robots to act in humanity's best interests.

jmack's picture

I am jealous of Brazil's justice system.   Our corrupt politiicans get off scot free.

Wahooo's picture

This is just more than I ever want to know about Brazil and its politics. Please make it stop.

onmail1's picture

Thriving on CIA money
Brazil in Dustbin

ds's picture

BRICS - Even when the alphabets were in the soup bowl, the combined GDP of BRIS was not equal to C. Now where is B ? Enjoy the snake oil of Goldman Sachs. Plenty more variants with their Muppets.


Privyet_Jet's picture


smacker's picture

We need an independent body to produce a comparison between the Brazilian and American political/corporate systems, to determine which is most corrupt.

I'd say that both suffer from systemic corruption but the sums of lucre involved are probably higher in the US and the corruption is more sophisticated.


And don't mention the even more highly sophisticated corruption in Britain's political system.

Offthebeach's picture

Were Americans.  No fkn way are we going to let Brazilians out corrupted us.  We're No 1.  USA!USA!USA!..  Fk yeah. 

smacker's picture

There was a time when most social crime in Brazil was centered around the big metropolis cities like Rio and São Paulo.

Well, no longer because Brazil is sliding into a state of lawlessness.

Here's a true personal story:

In João Pessoa/PB - the sleepy state capital of Paraíba, I was held up at gunpoint two weeks ago. Two guys pulled up on a motorbike and the passenger got off and walked over to me pointing a gun in my face. He demanded I hand over the gold ring on my right hand. To cut a long story short, they got nothing from me and the bike driver ended up on the ground with his bike on top of him. I got away without being shot in the back. Next time maybe not so lucky.

Last night on TV Globo News, they showed another rising crime where large trucks are hijacked and the goods stolen but also every single wheel/tyre was removed. The trucks are simply left in the countryside with large components/parts removed for resale.

ATMs are being ripped out of the walls by gangs with 4x4s and heavy chains.

The recent big bank robbery in Paraguay was carried out by three Brazilian gangs: one from Rio, one from SP and one from Paraná.

mary mary's picture

<  Brazil is more corrupt.

<  Venezuela is more corrupt.

<  ALL Latin American countries are, 500 years after Columbus, still slaves of Rome, and therefore inescapably corrupt.

Offthebeach's picture

Can't these $40,000/year guys just plead guilty to a single count and write a personal check for 5 million.  Kind like the banks do every other month.