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Thursday, July 6, 2017

Unrest may follow Brazilian president Temer's bribery charges

Brazil's chief prosecutor delivered a series of charges against President Temer to a Supreme Court judge. The judge must decide if the case can be sent to the lower house of the Brazilian parliament.

The charges follow upon the release of an audio tape in which Temer appears to encourage the payment of hush money to a jailed politician. The lower house would be required to vote on whether Temer can be tried. Temer denies any wrongdoing and claims he can prove his innocence. Opposition parties have long been demanding snap elections.
The charges are just the first among what are expected to be a series of graft charges in the coming weeks. This is the first time the Prosecutor-General Rodrigo Janot has presented charges against a sitting Brazilian president. Temer just replaced leftist former president Dilma Rousseff last year. Temer's ruling coalition are confident they have the votes to block the two-thirds majority necessary for there to be a trial. However, Temer's approval rating is in the single digits. If the coalition members have to vote several times to protect Temer some members may decide not to support him.
The details of the charges are outlined in a Globe and Mail article:Temer was charged in connection with a graft scheme involving the world’s largest meatpacker, JBS SA. Executives said in plea-bargain testimony the president took nearly $5 million in bribes for resolving tax matters, freeing up loans from state-run banks and other matters. Joesley Batista, one of the brothers who control JBS, recorded a conversation with Temer in which the president appears to condone bribing a potential witness. Batista also accused Temer and aides of negotiating millions of dollars in illegal donations for his Brazilian Democratic Movement Party (PMDB).This case is just one of many that investigators in Brazil have uncovered over three years. Companies have allegedly been paying billions of dollars in bribes to politicians and to executives of state-run companies to gain contracts.
Temer is not alone. One third of his cabinet is under investigation and four former presidents plus dozens of politicians. The scandals may make it difficult if not impossible to follow through with the unpopular labor "reforms" that are supposed to help the Brazilian economy to rebound from a recession. Some key members of Temer's coalition say they will stop work on labor reforms if they are required to vote on charges against the president.
The document delivered to the Supreme Court said in part: "from March to April, 2017, with a free and conscious will, the President of the Republic Michel Miguel Temer Lulia, taking advantage of his position as head of the Executive Power and national political leadership, received for himself… an undue advantage of 500,000 Brazilian reals." Temer is also accused of being promised another 38 million reals.according to Brazilian media reports. A Brazilian real is worth a little over 30 cents US. On June 24th Temer's approval rating was 7 percent the lowest ever recorded in the last 28 years.
Temer is a conservative and has been introducing market reforms that are very unpopular. A series of charges and votes to support Temer will no doubt create a political backlash that could lead to large demonstrations and demands for elections that could force the government out of office or lead to violence and unrest. The government will be unable to deliver on its pro-business program. There have already been large demonstrations against Temer's reforms including changes to pensions as discussed on the appended video. The government would be wise to call elections before social unrest becomes violent.

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