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Center for Latino and Latin American Studies

"The Fate of Brzil's President Hangs in the Balance" - The Economist

 
 
 
 

The fate of Brazil’s president hangs in the balance

Michel Temer is in serious trouble. But he has reserves of strength

 

 

 

 

 

 

 

 

 

 

 

 

 

| BOA VISTA

 

“IF THEY want, let them bring me down!” So declared Brazil’s president, Michel Temer, in a newspaper interview on May 22nd. He is the second president in the space of a year who is fighting to stay in office in the face of allegations of wrongdoing and dismal poll ratings. His predecessor, Dilma Rousseff, was impeached in 2016 on a technical violation of public-accounting law. The allegations against Mr Temer are far graver, but his chances of remaining president may be brighter. Whether he stays or goes, the accusations against him are momentous. The blow to his prestige and influence will delay, and might destroy, vital reforms to Brazil’s economy, which is only beginning to emerge from its worst-ever recession.

Mr Temer’s woes began on May 17th when O Globo, a newspaper, reported that, on a tape recorded by Joesley Batista, a billionaire businessman, he is heard endorsing payment of hush money to a politician jailed for his role in the Petrobras scandal. This originally centred on the state-run oil company but has expanded beyond it. In a related sting, police filmed Rodrigo Loures, a congressman from Mr Temer’s Party of the Brazilian Democratic Movement (PMDB) and formerly his right-hand man, accepting a bag with 500,000 reais ($153,000) in cash. Mr Temer solicited millions in irregular payments, claimed Mr Batista and a subordinate.

Mr Temer has protested his innocence in speeches and interviews. He portrays himself as the victim of a “perfect crime” committed by Mr Batista, who framed him in exchange for near-total immunity from prosecution (see article). Mr Temer’s fate is in the hands of the courts, his allies in congress and public opinion, any one of which could bring him down. The evidence against him is shocking but inconclusive. Mr Temer has strengths that his hapless predecessor did not.

Trashing the tape

Edson Fachin, a judge on the supreme court, which tries sitting politicians, has authorised the attorney-general to open a criminal investigation into Mr Temer, Mr Loures and Aécio Neves, a senator from the centre-right Party of Brazilian Social Democracy (PSDB), who was caught in another Batista-related sting. Formal charges may be filed soon. Mr Temer’s lawyers contend that the tape is “worthless”. Their study of it turned up 70 “discontinuities”, which may suggest tampering. Mr Fachin has ordered a forensic examination.

Lawyers will poke holes in other evidence, including the plea-bargain testimony by Mr Batista and his brother, Wesley, co-owners of JBS, a giant meat exporter. Some of the Batistas’ allegations refer to wrongdoing that took place before Mr Temer became president. In such cases, he has immunity. But legal niceties will not help if he cannot scrub off the mud he apparently spattered on himself. When Joesley Batista boasts on the tape of having two judges and a prosecutor in his pocket, Mr Temer merely murmurs, “great, great”.

The political calculus of his allies in congress could be as important as the weight of the evidence, and will partly depend on it. His most important friend is Rodrigo Maia, the speaker of the lower house, who has signalled that he will shelve the dozen impeachment motions that have been filed so far. Two medium-sized parties have quit the PMDB-led coalition, but their ministers have clung on to their cabinet posts. The PSDB, the biggest coalition partner, seems unsure what to do.

 

They are hesitant in part because Mr Temer has no clear successor (he was Ms Rousseff’s vice-president, but does not himself have a deputy). Mr Maia will take over temporarily if Mr Temer is impeached or indicted. If he leaves office definitively, congress will have 30 days to choose a successor to serve the rest of his term, which ends at the end of next year.

That person would carry the stigma of election by a congress mired in corruption. Any politician with the skill to pilot reforms through the legislature is, like Mr Maia, already under investigation, or soon could be. Other potential successors are Cármen Lúcia, the respected chief justice of the supreme court, and Henrique Meirelles, the finance minister, who has the nous to serve as president. But Ms Lúcia is not a politician and Mr Meirelles was chairman of J&F, the Batistas’ holding company. Nelson Jobim, a former minister, worked for BTG, a bank whose founder was arrested in the Petrobras affair.

Unlike Ms Rousseff, Mr Temer is not loathed by the elite. Bosses know they have a big stake in the continuation of his policies, especially an overhaul of pensions and a reform of rigid labour laws. These should encourage interest rates, already falling, to come down further, and lift employment. Mr Meirelles now concedes that the reforms will be delayed. The stockmarket plunged and trading was suspended after the disclosure of the Batista tape. On May 22nd S&P warned that it might downgrade Brazil’s credit rating.

Mr Temer also arouses less passion than Ms Rousseff did among middle-class voters. Protests in 2015 and 2016 by prosperous urbanites, galvanised by anger over the Petrobras scandal, helped drive her out of office. Those people are reluctant to join left-wingers in lambasting Mr Temer and his pro-market reforms. Turnout at anti-Temer protests on May 21st was low. Participation may wane after protesters set a ministry ablaze in Brasília on May 24th.

The final arbiter of Mr Temer’s future may turn out to be the electoral tribunal. Much of the money sloshing around from Petrobras, JBS and others may have financed the election of Ms Rousseff and Mr Temer in 2014. On June 6th the tribunal will begin deliberations on whether to annul the results. Until last week, analysts doubted that it would risk instability by doing that. But its politically savvy judges may now believe that Mr Temer’s continuation in office is the greater threat. The PSDB is reportedly trying to make its decision easier by brokering an agreement on a successor to Mr Temer. Speculation focuses on Mr Jobim and Tasso Jereissati, a sensible PSDB senator from the state of Ceará.

Mr Temer could slow things down by appealing against the tribunal’s ruling. But if his allies turn against him, his defiance could crumble.

This article appeared in the The Americas section of the print edition under the headline "Dangling man"

 

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