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Brazil's President Michel Temer gestures during a inauguration ceremony of the new Minister of Justice, Torquato Jardim, at the Planalto Palace, in Brasilia, Brazil May 31, 2017. REUTERS/Ueslei Marcelino


By Anthony Boadle and Ricardo Brito

BRASILIA (Reuters) - Judges on Brazil's top electoral court will start deciding on Wednesday whether President Michel Temer received illegal campaign funding in 2014, which could lead to his removal from office.

Temer's opponents see a ruling by the court, called TSE, as a way out of the political crisis set off by corruption allegations levelled against the centre-right leader, but a decision could take weeks if not months and can be appealed by Temer.

The case was postponed in April to allow for new evidence arising from Brazil's biggest ever corruption scandal involving billions of dollars in kickbacks paid by companies to scores of politicians and government officials.

The court's decision is key to deciding the political future of Brazil where the prospect of having a second president ousted in one year has generated uncertainty and weakened the Brazilian currency, stocks and bonds in recent days.

Temer, who was the running mate of leftist President Dilma Rousseff and replaced her when she was impeached last year, has said his campaign accounts received no illegal money.

If Temer is removed from office, lower house Speaker Rodrigo Maia would take over and Congress would have 30 days to pick a caretaker to lead the country until elections in late 2018.

If Temer is found guilty, he is expected to appeal, which could delay the process for months.

The main ally in Temer's governing coalition, the Brazilian Social Democracy Party (PSDB), is waiting for the court ruling to decide whether to abandon Temer's government, which would sink his fiscal reform agenda.

The case was filed in 2014 by the PSDB after it lost the election to Rousseff. In final arguments, lawyers for the PSDB called for Rousseff to be condemned but that Temer be absolved.

The electoral court had been expected to blame Rousseff and let off Temer, but that is now unlikely due to recent plea-bargain testimony by executives of giant meatpacker JBS SA and engineering group Odebrecht who alleged they gave illegal funds to his campaign.

Federal prosecutor Nicolao Dino said Odebrecht paid 35 million reais (8.3 million pounds) in illegal contributions to the Rousseff-Temer campaign and called on the court to annul the ticket.

Temer's lawyers argued that plea bargain testimonies where insufficient evidence and the case could not be extended to target the current president.

Temer has refused to resign since the Supreme Court late last month authorized an investigation against him for alleged corruption, racketeering and obstruction of justice.

The investigation is based in part on a secret recording of a conversation with a JBS executive in which Temer appeared to agree to the payment of hush money to silence a key witness in a massive graft scandal. Temer has denied any wrongdoing.

The political crisis engulfing Temer's government deepened on Saturday with the arrest of a close aide, former lawmaker Rocha Loures, who was seen in a police video receiving a bag filled with 500,000 reais in cash.

The Supreme Court has given Temer until Friday to answers questions by federal police on his conversation with the JBS executive and whether Loures was a middleman.

Temer's political standing took another blow on Tuesday with the arrest of his former minister of tourism, Henrique Eduardo Alves, for suspected graft in the building of a soccer stadium in northeastern Brazil for the 2014 World Cup.

(Reporting by Ricardo Brito and Anthony Boadle; Editing by Leslie Adler and Lisa Shumaker)

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