By Jeffrey T. Lewis
SÃO PAULO -- The fledgling administration of Brazil's acting
President Michel Temer was rocked by fresh corruption allegations
on Wednesday following the release of plea-bargain testimony
implicating him in a sprawling graft scandal centered on the
country's state oil company.
Mr. Temer, who replaced Dilma Rousseff in May when she stepped
aside to face an impeachment trial, allegedly asked the then-head
of the transportation unit of Petróleo Brasileiro SA in 2012 to
arrange illegal campaign contributions to Mr. Temer's party,
according to a plea agreement released Wednesday by Brazil's
Supreme Court.
It was the first time Mr. Temer has been directly implicated in
the blockbuster corruption investigation known as Operation Car
Wash, which has ensnared dozens of high-profile business and
political figures, including leading members of Mr. Temer's
Brazilian Democratic Movement Party, or PMDB.
Mr. Temer on Wednesday denied ever asking for illegal campaign
contributions and called the allegations "absolutely untrue."
The developments are the latest corruption allegations leveled
at the administration of Mr. Temer, who has been Brazil's acting
president for barely a month.
Two of his cabinet members -- including the former minister of
transparency -- resigned from their posts last month in response to
allegations that they sought to subvert the probe into massive
graft at Petrobras, as the state oil company is known.
"This deepens his government's crisis," said Pedro Fassoni
Arruda, a political science professor at the Pontifical Catholic
University of São Paulo. "But a plea bargain doesn't prove
anything, it's just the start of the investigation."
Sergio Machado, the former head of Petrobras Transporte SA, said
in the newly released plea agreement that he organized, at Mr.
Temer's request, a donation of 1.5 million reais ($434,000) from a
construction firm to Mr. Temer's party. In exchange, according to
the testimony, the builder was to be given a leg up on winning
contracts.
Mr. Temer, who was Brazil's vice president at the time, told Mr.
Machado he was worried that his party's candidate for mayor of São
Paulo, Gabriel Chalita, needed more financing, Mr. Machado said in
the document.
Petrobras had no immediate comment. Mr. Chalita, who lost his
2012 mayoral bid, said all his campaign contributions were
legal.
Some analysts played down the significance of the
developments.
"There's nothing illegal about asking for donations," said
Pierre Moreau, a São Paulo-based lawyer, adding that it would be a
problem "if Temer knew there was something illegal," such as that
benefits were being offered in return for campaign donations.
Mr. Machado sought out prosecutors in the Petrobras corruption
investigation and offered to negotiate a plea agreement after other
people accused in the case said he participated in the bid-rigging
and bribery scheme, according to a spokeswoman for the probe.
Brazilian news media have reported leaked portions of Mr.
Machado's plea testimony in recent weeks, including the allegation
about Mr. Temerand others that resulted in two of Mr. Temer's
cabinet ministers stepping down.
It could be difficult for Mr. Temer, whose government received
an 11.3% approval rating in a recent poll, to sink much more in the
polls, said Carlos Melo, a political science professor at São Paulo
business school Insper.
"It's not a surprise for public opinion because everyone knows
Temer has been in politics for a long time," Mr. Melo said.
In his plea deal, Mr. Machado also alleged that other prominent
members of Mr. Temer's party accepted millions of reais in bribes,
including Senate President Renan Calheiros, former Brazilian
President José Sarney and the acting president's former planning
minister, Senator Romero Jucá.
Mr. Machado accused Senator Aecio Neves, who was the Brazilian
Social Democracy Party's candidate for president in 2016, of
accepting illegal payments.
All four men have denied the allegations.
Mr. Machado also said he had heard from various senators that
Brazilian company JBS SA, the world's biggest meat packer, would
make a donation of 40 million reais to the PMDB.
The money was to be distributed among the party's senators, for
the 2014 elections, said Mr. Machado. Mr. Machado told prosecutors
he didn't know if JBS got anything in return.
JBS said all its campaign donations were legal. The company's
shares fell 3.2% on Thursday, to 9.76 reais.
Luciana Magalhaes and Rogerio Jelmayer contributed to this
article.
(END) Dow Jones Newswires
June 16, 2016 02:48 ET (06:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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