Brazil's President Temer faces key ruling in electoral court
Posted June 7
The future of Brazilian President Michel Temer hangs in the balance as the country's top electoral court resumes its look at accusations of illegal campaign finance.
Less than a year after Dilma Rousseff was impeached and replaced by her vice president, Temer, the seven-judge court is reviewing evidence that the 2014 electoral victory was funded with illegal donations and money from bribes.
The prospect of a second president being forced out of office in less than a year has unsettled markets and investors.
Initially, most observers expected Temer to survive this trial, thanks to his efforts to push through austerity measures aimed at pulling the economy back from its worst recession on record.
He had the support of much of Brazil's business elite and had forged key alliances in Congress willing to approve the reforms.
"Things were on the path to economic recovery," said Marcelo Neri, professor at the Getulio Vargas Foundation, which focuses on Brazil's economy.
A ballooning corruption scandal has changed that outlook.
"Very quickly, the emperor was left without any clothes," said Neri.
Last month, a secret recording surfaced between Temer and the president of JBS, a multinational food processing company. In the tapes, JBS' Joesley Batista can be heard talking about paying bribes.
In a plea deal, Batista said Temer condoned the payment of hush money to silence a jailed legislator.
Temer says the recording was doctored.
His office last month released a statement denying that he had authorized any bribes to be paid to imprisoned former house speaker Eduardo Cunha in exchange for his silence regarding a long-running corruption investigation.
Temer, 76, said he will fight to prove his innocence. "I know what I did, and I know my actions were right," he said.
But the scandal -- just the latest development in the long-running "Car Wash" corruption investigation that has implicated dozens of politicians from across the political spectrum -- prompted new street protests.
Temer's approval rating is in the single digits and separately from the electoral court, the Supreme Court has opened an investigation into alleged corruption and obstruction of justice.
In the current climate, observers say the chances of the Supreme Electoral Court annulling the Rousseff-Temer victory have increased. There could be a ruling later this week, although there could also be more delays.
Even if he survives this trial, there are other obstacles to Temer making it to the end of his term next year.
"If the court in fact rules this week to absolve Temer, he isn't out of the woods," the Eurasia Group said in a report, noting that the Supreme Court corruption investigation will likely heat up.
If Temer is ousted, power is handed to Congress, which will have up to 30 days to choose a caretaker president until new elections -- slated for October 2018.
In the meantime, the Car Wash investigation has already engulfed the major political players and business leaders -- leaving the electoral field wide open.