Reuters International

Brazil's President of the Chamber of Deputies Eduardo Cunha arrives to make his defense in an ethics committee of the lower house, in Brasilia, Brazil, May 19, 2016. REUTERS/Adriano Machado

(reuters_tickers)

By Lisandra Paraguassu

BRASILIA (Reuters) - Brazil's suspended House speaker, Eduardo Cunha, defended himself before an ethics committee on Thursday, a day after the appointment of his ally as leader of the government coalition in the chamber showed the veteran lawmaker's enduring political sway.

The Supreme Court indefinitely suspended Eduardo Cunha this month on charges of obstructing a corruption investigation, just weeks after he orchestrated the approval of impeachment proceedings against President Dilma Rousseff in the lower house. The Senate voted last week to suspend Rousseff and put her on trial for breaking budget rules.

Yet Cunha's continued support from an array of minor parties and his command of obscure parliamentary rules still make him a power broker in Brazil's fragmented Congress, and forced interim President Michel Temer to accept his ally as coalition leader.

Temer preferred a consensus candidate, but accepted Cunha ally Andre Moura on Wednesday when it became clear that 13 second-tier parties with 225 lawmakers had closed ranks behind him, according to two presidential aides who asked not to be named.

The compromise underscores the uphill battle facing Temer's market-friendly economic team as it tries to pass unpopular reforms in Congress aimed at closing a huge fiscal deficit and restoring investor confidence in Brazil's moribund economy.

Despite broad support in Congress, Moura is a controversial spokesman for the interim government, with six pending cases against him in the Supreme Court, ranging from embezzlement and criminal conspiracy to allegations of attempted murder.

Moura is also under investigation in a sweeping corruption probe of state-run oil company Petrobras. As an elected official, Moura, who has denied wrongdoing in any of the cases, can be tried only by the Supreme Court.

Moura's proximity to Cunha thrust the ousted speaker back into the spotlight as he returned to Congress on Thursday to testify before an ethics committee weighing whether to permanently strip his mandate as a lawmaker.

He is accused of lying to a congressional probe about undisclosed Swiss bank accounts.

Cunha reiterated before the ethics committee that he had no undeclared accounts overseas in his name, and that accounts revealed by Swiss authorities were run by trusts on his family's behalf.

Although Cunha has been suspended from office, he retains his congressional privileges and use of the speaker's residence, offices and plane, following a decision by his supporters in Congress. A spokesperson for the Supreme Court said there was no legal precedent for removing the speaker of the House.

Cunha has filed an appeal for the Supreme Court to reconsider his indefinite suspension.

A right-leaning legislator, José Carlos Aleluia, has introduced a motion in Congress to strip Cunha of his privileges and convene a vote to elect a new speaker.

(Reporting by Lisandra Paraguassu; Writing by Brad Haynes; Editing by Daniel Flynn and Frances Kerry)

reuters_tickers

 Reuters International