In a move that will surely light the proverbial lightbulb over Donald Trump's head, Brazilian President Michel Temer, having been officially dragged into Brazil's massive corruption scandal after a record emerged in which he urged the payment of "hush money", said on Saturday he would ask the Supreme Court to suspend its investigation into allegations he was also involved in the carwash corruption scheme, vowing to remain in power.
Speaking during a televised address on Saturday afternoon, Brazil’s deeply unpopular president, who replaced a just as deeply unpopular president last year when Dilma Rouseff was impeached, claimed the recording that implicated him in the scandal was doctored and said he would file a petition with the Supreme Court to suspend the investigation until it could be verified, the WSJ reported.
In the recording cited by Temer, which unleashed a historic crash of the Brazilian stock market and currency on Thursday when news of Temer's involvement broke, the president can be heard chatting with Joesley Batista, chairman and heir of the beef-and-chicken JBS empire, apparently him his approval to pay the jailed former speaker of the House Eduardo Cunha - the man responsible for Dilma Rouseff's ouster last year - to buy his silence. Batista, who made the recording and gave it to prosecutors in hopes for prosecutorial leniency against JBS, said the recording wasn’t edited.
“Our country will not go off the rails—I will continue at the front of the government,” Mr. Temer said in his latest defiant speech about the allegations.
To simplify: Brazil's president just told Brazil's Supreme Court to suspend its probe of Brazil's president which would most likely result in Brazil's president being impeached. Again.
Temer’s statement comes the day after it was revealed that the executives at Brazil’s meatpacking giant JBS told prosecutors they had paid millions of dollars in bribes to the president and his predecessors, Dilma Rousseff and Luiz Inácio Lula da Silva. In documents released by the country’s Supreme Court Friday, JBS executives told prosecutors the company had paid a total of $123 million in bribes to the country’s politicians over recent years, including payments of $4.6 million to the president.
In his speech on Saturday, Temer immeiately attacked JBS, accusing its executives of “damaging Brazil.” Ironically, in a attempt to drag down JBS with him, Temer also highlighted reports that JBS made money from the latest scandal by buying large amounts of dollars before the news broke. The Brazilian real plunged in value against the dollar on Thursday, the first day of trading after a report about the recording was published.
On at least one thing Temer may be right: the alleged incident involving JBS insider trading is perhaps just as amusing as Temer telling the court to stop probing him. On Friday, Brazil's regulator said it launched probes against JBS - i.e., the company at the heart of the latest and greatest Brazilian scandal - and other companies controlled by J&F Investimentos to investigate suspicious trades made before Brazil's markets crashed after the revelation of a plea deal by the company's top executives. In a statement late on Friday, the regulator CVM said it is investigating "signs of possible insider trading" of foreign exchange futures, derivatives and JBS stock ordered by meatpacker JBS SA, Banco Original SA and FB Participacoes SA, Reuters reported. The regulator is also examining the sale of shares in the company by its controlling shareholders and subsequent acquisitions by the company´s treasury.
The probe emerged after Brazil's Valor Economico reported on the same day that JBS and other companies owned by the Batista brothers bought over $1 billion in U.S. dollar contracts in the local market hours before the plea deal news broke.
In other words, the Batistas are accused of going long the dollar in Soros-sized amount, and shorting their own stock, in frontrunning the market turmoil that they themselves would unleash just hours later after news of the plea bargain and Temer's involvement emerged!
Not even Brazilian telenovellas have this much drama and intrigue, let alone hubris...
Predictably, JBS said denied everything and on Friday said any trades made this week were consistent with the company's strategy of hedging its large dollar-denominated debt. Amusingly, the company said the recent currency swings could have caused more than 1 billion reais in losses. It has yet to be discloed what gains the "currency swings" generated instead as a result of the corrupt company's insider trading, pardon hedging. The real fell 8 percent against the U.S. currency on Thursday, sustaining the largest losses since the country devalued its currency in 1999.
Meanwhile, taking a page out of the Venezuela playbook, protests are planned across Brazil’s major cities on Sunday against Temer, whose popularity rating was less than 9% before the latest scandal broke.
Somewhere, Donald Trump is furiously taking notes.