Eduardo Cunha, the former speaker of Brazil's Chamber of Deputies, was removed from office Monday night by a landslide vote in the chamber of 450 votes to 10 with nine abstentions.

Lawmakers decided overwhelmingly that Cunha had lied during the investigation into corruption at Brazil's state-run oil company, Petrobras, and had hid millions of dollars in offshore accounts. On top of losing his seat as speaker, Cunha also loses all political privileges for eight years.

Cunha had resigned as speaker of the Chamber of Deputies in July, and was already suspended as speaker in May by the Supreme Court, at the request of the attorney general, who accused him of obstructing justice and hiding millions of dollars in bribes in Swiss bank accounts.

The corruption investigation has already brought down some of the country's top political and business leaders.

By being voted out, Cunha loses partial immunity from prosecution offered to members of Congress and high-ranking politicians. The Senate and the Chamber of Deputies make up the country's Congress. When announcing his resignation earlier in the summer, Cunha, who has been widely compared to the character Frank Underwood in the TV series "House of Cards," had said: "I will continue to defend my innocence and that I told the truth." In July, the congressional ethics committee voted to strip him of his congressional seat. Although resigning as speaker, he still hung on to the seat until Monday's denouement. Cunha had launched his bid to impeach Rousseff, the country's first female leader, in December 2015, accusing the then-leader of hiding a budgetary deficit to win re-election in 2014. Her opponents also blamed her for the worst recession in decades. At the end of August, Brazil's Senate voted 61-20 in favor of removing her from office. </s> RIO DE JANEIRO (AP) — Brazil’s lower house of Congress voted overwhelmingly late Monday to strip the legislative seat of its former speaker amid accusations of corruption and obstruction of justice.

The Chamber of Deputies voted 450 to 10 to remove Eduardo Cunha after hours of debate. Nine legislators abstained.

As speaker, Eduardo Cunha was the main driver behind the impeachment process that led to the Senate trying left-leaning President Dilma Rousseff and removing her from office last month. He has been a key ally of new President Michel Temer, who had been Rousseff’s vice president.

Cunha has been accused by Brazilian prosecutors of receiving millions of dollars in bribes linked to the sprawling corruption scandal at state-run oil giant Petrobras. But the issue before the Chamber of Deputies was only whether he lied about having secret banking accounts in Switzerland.

Cunha, who said the accounts belonged to a trust, was pressured into resigning as speaker after the accounts came to light, but he had refused to give up his post as a lawmaker.

With the loss of his congressional seat, Cunha also loses his partial immunity from prosecution. In Brazil, only the country’s top court can decide to charge and try federal lawmakers.

Cunha, who had been in his fourth term as a lawmaker, told his colleagues during the debate that the Rousseff impeachment effort was the reason for the drive to remove him.

“This is all because I opened the impeachment proceedings. The (governing) Worker’s Party wants a trophy to say this was a coup,” Cunha said. “This criminal of a government of yours is now gone thanks to me.” </s> Brazilians concerned with rampant corruption in their political system have reason to rejoice today: the man who many consider the most corrupt politician in Brazil – a title for which there is much competition, and who had been removed from office in May – finally had his mandate ended.

In May, a Brazilian Supreme Court justice determined that Eduardo Cunha, the former President of the Chamber of Deputies, a position equivalent to the Speaker of the House in the U.S., should have his term suspended.

Tonight, in a session that was at times nasty and personal and that lasted through the night, the Chamber voted to end Cunha's mandate. Cunha was most recently caught lying about having offshore (Swiss) bank accounts. (He argued, among other things, that the accounts were his wife's.)

At the end, 450 Congressmembers voted to end his mandate. Only 10 voted in favor of him. 10, a dramatically low number for the man who used to run Brazil's politics. It's a comment on how quickly the tides can turn in Brazil. And it might also signal a new era in Brazil's attempts to fight corruption.

Interestingly, Cunha's few supporters claimed that he was being judged not on the law but on public opinion. That is the same argument supporters of the impeached Brazilian President Dilma Rousseff have made.

In May, the justice explained the decision by citing the numerous and varied corruption proceedings that Cunha is currently caught up in. Some of those proceedings are related to graft charges in the massive Car Wash corruption investigation into Petrobras contacts that has washed over top-tier politicians of all political parties, including former president Luiz Ignacio da Silva. Some of those investigations are related to the good old-fashioned pay-to-play-politics that seem to dominate Brazilian governance.

The justice, Teori Zavascki, noted that Cunha's mandate as leader of the lower house, "is not an empty title authorizing expectations of power that are unlimited, irresponsible and meaningless." He noted that there was evidence that Cunha set up a "network of obstruction" to shield himself from anti-corruption investigations.

"I think this is a great sign," argued Rodrigo Fernandes, a São Paulo venture capitalist. "It's a sign that we are not going to tolerate corruption, no matter the [political] party."

While the arrival of Cunha in the crosshairs of Brazil's anti-corruption crusade is a watershed moment for the country, it is one that was not at all inevitable.

For decades – yes, decades – Eduardo Cunha has escaped prosecution on corruption charges, despite being implicated in case after case. For many Brazilians, he is the symbol of political malevolence, a bad guy who outsmarts the Brazilian public again and again.

Related: He also happens to be one of the most powerful politician in Brazil.

It is Cunha who ran the impeachment proceedings against President Dilma Rousseff before he was removed in May, which resulted in her impeachment by the lower house that he governs. During those proceedings he was the target of leftists' ire, as they pointed their fingers at him and called him a "scoundrel" and his proceeding a "coup". He was even called a "gangster" to his face by one Congressman. (Catch the word "gangster" in the beginning of the video below).

A full recap of the most outrageous moments from that proceeding can be found here.

Despite the hate aimed his way by his political enemies during the impeachment proceeding, Cunha found a way to grin as his political supporters approached the microphone that Sunday and voted to impeach the President.

The grin is likely gone tonight. Brazilian social media is currently exploding with reactions to the news that Brazil's most invincible politician is politically dead. Many Brazilians are adjusting the anti-Rousseff chant of "Tchau, querida" (Bye, sweetheart) into the masculine form to create an anti-Cunha mantra: "Tchau, querido." Others are taking liberties with the fact that Cunha's name begins with the letters for a vulgar Brazilian word for a certain body part.

"It would be very hard to find somebody that would be against the removal of Cunha at this point," notes Natalia Ribeiro, a graduate student in political science in Brasília. "Maybe there is, but I doubt someone would argue publicly against it."

Fernandes, like many Brazilians, was in favor of the impeachment of Rousseff. But that doesn't mean he is a Cunha supporter. "The fact that he helped pushed the impeachment forward is not going to give him a free pass, despite what he might have thought."

But, at the same time, Brazilians will have a hard time counting him out. Cunha, an evangelical Christian radio announcer, is Brazil's rubberman, a man who wriggles his way out of any net. Tonight, the net seems to have finally closed. </s> Brazilian President Michel Temer was allegedly caught in a secret audio recording authorizing the head of meatpacking giant JBS SA to pay bribes to buy the silence of disgraced political leader Eduardo Cunha, who is serving a 15-year prison sentence for corruption.

The recording was delivered to the Supreme Court on Wednesday as part of evidence in a plea-bargain deal that JBS’s Joesley Batista is seeking in relation to the mammoth Lava Jato graft investigation, according to a report in the newspaper O Globo.

The paper’s website crashed in the hour after the story broke.

The news roiled Brazil, as a nation that thought itself inured after three years of political turmoil confronted a dramatic ratcheting up of the level of chaos and uncertainty.

Television channels cut from regular programing to air scenes from Brasilia of top political leaders rushing red-faced and panic-stricken through the hallways of Congress, on their way to meet with Mr. Temer.

The President’s office released a statement confirming he met with Mr. Batista in March but denying the allegations: “President Michel Temer never solicited payments to obtain the silence of former [Congress] deputy Eduardo Cunha. He never participated and never authorized any action with the objective of avoiding testimony or co-operation with the justice system by the former member.”

The Lava Jato investigation has involved a succession of stunning revelations but never anything like this: all previous plea bargains have related to the recounting of bribery and other illegal actions committed in the past. But Mr. Batista, and his brother Wesley, with whom he runs JBS, appear to have been working together with police to entrap political figures in criminal activity.

O Globo reports that in recent weeks trusted Batista staffers delivered sacks of cash containing $1.3-million (Canadian) in numbered bills, tagged with traceable chips, as bribes to politicians, while police filmed.

Mr. Batista allegedly told Lava Jato prosecutors that he has paid $2.2-million to Mr. Cunha just since last October. The tape reportedly records the President saying, “You need to keep this up, got it?”

Mr. Cunha, an evangelical preacher, was the Speaker of the lower house of Congress and the most powerful man in the country until his ignominious downfall. He spearheaded the impeachment of former president Dilma Rousseff last year. Mr. Temer recently told an interviewer that Mr. Cunha told him he would make sure she was ousted after she refused to shut down an investigation into his actions. In March, Mr. Cunha was sentenced to 15 years for corruption and money-laundering, for taking bribes to ensure the awarding of lucrative state contracts – and then funnelling the money to Swiss bank accounts.

As he was forced out of office, Mr. Cunha warned that he had damaging information on virtually all of his political colleagues – and the O Globo story suggests that Mr. Temer and others have been keen to ensure he didn’t share that information.

Also named in the JBS plea bargain is Aecio Neves, the head of the Brazil Social Democratic Party (PSDB), who narrowly lost the last presidential race to Ms. Rousseff and was considered a contender for president in the next election. He was allegedly recorded asking Mr. Batista for $870,000 on March 24 to pay for expenses related to Lava Jato; he is under investigation for a range of financial crimes.

The Batista brothers have been charged with “crimes against the national finance system,” including misuse of loans from a national development bank.

The Lava Jato investigation has revealed an entrenched and widespread symbiotic relationship between Brazil’s largest businesses, particularly construction firms such as Odebrecht SA and agribusiness heavyweights like JBS. For decades, politicians have accepted off-the-books campaign funding and personal bribes from these companies in exchange for awarding enormous state infrastructure and procurement contracts and writing friendly legislation. A giant swath of the political class, including a third of senators and nearly a third of cabinet ministers, are under investigation or indictment in connection with Lava Jato.

Mr. Temer, alone, has been safe – until now. He has been named in a number of other plea bargains, relating to bribes he allegedly authorized before he took over as President with Ms. Rousseff’s ouster last August. But Brazilian law says he cannot be prosecuted for those crimes while he holds the office of President. However, the incidents in the reported recordings would seem to lead Brazil into new legal territory: these alleged crimes were committed just weeks ago.

“The owners of JBS made a joint plea bargain [to Supreme Court Justice] Edson Fachin, with recordings that link the President Michel Temer to Eduardo Cunha – something that is an atomic bomb,” Chico Alencar, an opposition member of Congress, said in the lower house when the news broke in the late evening. “It just keeps coming, in this country, because we have a corrupt and degenerate political caste.”

The tapes are theoretically part of a sealed deposition, but Brazil’s political crisis over the past two years has played out in a series of leaks to media. If the tapes prove to show what O Globo columnist Lauro Jardim has reported in his explosive story, it raises serious questions about Mr. Temer’s ability to hold the office until his term ends in late 2018.

In other countries, a president might see no option but to resign over news such as this, but this is less likely in Brazil, where Mr. Temer will likely hunker down and take refuge in a blizzard of court processes and bureaucracy.

Within an hour of the story being published, a member from Congress from an opposition party filed an impeachment request. Opposition members of Congress were reported to be negotiating the wording of a proposed constitutional amendment to try to force Mr. Temer out.

Many Brazilians also read into the fact that it was O Globo, a media conglomerate whose wealthy owners were viewed as backers of the Rousseff impeachment and supporters of Mr. Temer, that broke this story – a sign that he has lost their protection, which could complicate his efforts to see out his term. </s> BRASILIA, BRAZIL—Brazil’s government plunged into crisis on Thursday, after a newspaper report alleged that President Michel Temer had condoned a bribe to a politician to keep him from testifying on corruption. The news stunned South America’s biggest country, coming less than a year after its last leader was impeached. Temer denied guilt, but both his rivals and some of his supporters called for him to step down. Opposition senators formally requested his impeachment, citing obstruction of justice, and the Supreme Court launched an investigation into the president’s actions. Temer said he would not resign. If he did, a new president would be elected through a secret vote in Congress to serve out the rest of Temer’s term, through 2018. This could take several months because of the complex legislative process and the likelihood of extensive political wheeling and dealing. The speaker of the house would step in temporarily, until a new leader was elected. Read more: Millions in bribes paid to Brazil president’s party, former exec says The political storm erupted late Wednesday, when the Brazilian newspaper O Globo reported that Temer had been the target of a police sting operation in which he was recorded condoning a payment by a Brazilian businessman to the jailed speaker of the house aimed at ensuring that the politician stayed silent on corruption.

When the executive told Temer that he was paying the former politician a monthly stipend to keep him quiet, the president said, “You need to keep that up, OK?” the newspaper reported, citing the recording. The recording was not made public. While Temer acknowledged having met with the businessman, Joesley Batista, a meat-packing executive, he denied any attempt to silence the former speaker, Eduardo Cunha, who is serving 15 years in prison for corruption. Cunha had been one of the country’s most powerful men and is believed to have compromising information on several top politicians. The presidential palace released a statement saying that Temer “never requested payments to obtain the silence of ex-deputy Eduardo Cunha.” It added that the president “defends a deep and wide investigation to get to the bottom of the claims put forward in the media.”

The police operation was part of a massive investigation into corruption known as Lava Jato, or Operation Car Wash, that has implicated scores of politicians and business executives. Through plea bargains, in which defendants provided prosecutors with information in exchange for more lenient sentences, authorities have been able to trace a major kickback scheme from a Brasilia car wash to the highest echelons of the government. Temer had managed to avoid being tainted by the scandal, going so far as to fire ministers who tried to interfere in the investigation. The news report late Wednesday, however, put in jeopardy the measures Temer had championed to rescue the ailing economy — and raised questions about how long he could stay in power. Scattered protests erupted across the country with both Temer’s rivals and supporters urging him to step down. “The president’s resignation has become imperative to prevent the crisis from worsening,” Carlos Siqueira, president of the Brazilian Socialist Party, a small member of the government coalition, told O Globo. “The Temer government ended today.” Temer, who called an emergency meeting of his supporters after the news broke late Wednesday, was determined not to resign, according to local media. But he may not have a choice. An unpopular president who ascended to the job after Dilma Rousseff was impeached, Temer’s legitimacy rested on his ability to unite Brazil’s three dozen political parties. With his political base divided, many questioned his ability to govern. “Given the gravity of the situation and the responsibility to keep Brazil from plunging into the imponderable, the only option is for President Michel Temer to resign,” said Sen. Ronaldo Caiado, another member of Temer’s coalition in the legislature. Temer’s opponents may have another route to kick him out of office. Rousseff and Temer are on trial in a case separate from the car wash investigation, for allegedly accepting illegal donations as part of their 2014 campaign. If convicted, the pair could see their victory invalidated, forcing Temer to step down. While this possibility was seen as remote when the trial began a few weeks ago, it is now seen as more likely, since Brazilian courts often take their cues from public opinion. </s> BRASILIA (Reuters) - One of Brazilian President Michel Temer’s closest aides resigned on Friday following allegations he pressured the culture minister to approve a property development, unsettling investors with the prospect of renewed political turmoil in Latin America’s largest economy.

Brazil's Minister Chief of the Secretary Office of Government Geddel Vieira Lima looks on during a meeting with deputies and government leaders of the Chamber of Deputies, in his office at the Planalto Palace in Brasilia, Brazil, November 22, 2016. REUTERS/Ueslei Marcelino

The resignation of Geddel Vieira Lima from the key post of minister in charge of relations with Congress - along with accusations that Temer himself also lobbied Culture Minister Marcelo Calero to approve the luxury development - sent Brazil’s currency and stocks lower.

An announcement by the public prosecutor’s office that it was considering whether to open an investigation also stoked concern that the fallout from the scandal could derail efforts by Temer’s center-right government to tackle’s Brazil massive budget deficit and restore economic growth.

“It’s time to go,” Vieira Lima said in his emailed resignation letter made public by Temer’s office.

Vieira Lima’s departure deprives Temer of his point man in negotiations with Congress, a crucial post as the administration strives to enact unpopular austerity measures and spur recovery in an economy suffering its worst recession since the 1930s.

Temer’s six-month-old government has lost five Cabinet ministers. Calero resigned last week saying he refused to bow to Vieira Lima’s pressure.

Previously, three Cabinet ministers stepped down over graft allegations related to a sprawling bribery and kickback scandal at state-controlled oil company Petroleo Brasileiro.

Temer played down the incident in an interview with O Estado de S.Paulo newspaper in which he lamented that a “minor episode” had caused a political storm and said he doubted it would lose him vital support in Congress for his fiscal belt-tightening agenda.

Leftist opponents have called for a congressional inquiry into Temer’s role in the matter, with some even calling for his impeachment.

While that is unlikely to happen, the new scandal will further undermine the reputation of an unpopular president and fuel political uncertainty that could delay a recovery that is already taking longer than expected.

“The problem for Temer is that this happened at a difficult time when the economy is not reacting and Brazilians are angry with politicians trying to escape prosecution for corruption,” said political analyst Ricardo Ribeiro with consultancy MCM Consultores Associados.

“It creates doubts about the future of this government next year,” he said.

Brazil’s political establishment is bracing for more turmoil from a leniency deal to be signed by engineering conglomerate Odebrecht SA in the Petrobras case that could incriminate as many as 200 lawmakers.

The Brazilian real slumped as much as 2.2 percent to 3.4679 reais to the dollar, the biggest intraday drop since a day after U.S. President-elect Donald Trump’s unexpected victory. It recovered to close 0.3 percent lower.

Brazil’s main stock market index, the Bovespa, fell 1.3 percent before cutting losses to close 0.27 percent lower.

LUXURY APARTMENT

The latest corruption crisis came to a head following news reports late on Thursday that Calero told federal police that Temer pressured him to resolve a dispute with Vieira Lima.

The standoff involved a permit for construction of a luxury oceanfront building in which Vieira Lima had purchased an apartment and that needed approval by a culture ministry agency because it would be built in a historical preservation district in Vieira Lima’s hometown of Salvador.

After Brazil’s public prosecutor’s office said it was studying a possible investigation into the case, a presidential aide told Reuters early Friday that Vieira Lima’s situation had become untenable.

Adding fuel to the crisis, the Estado de S. Paulo newspaper reported on Friday that Calero secretly recorded his conversations with Temer and Vieira Lima to back his case.

Slideshow (5 Images)

A presidential ethics panel decided on Monday to investigate whether Vieira Lima pressured Calero over the building.

The 30-story building project had already been denied a permit on historical preservation grounds.

A federal police source with knowledge of the statements said Calero told police that Temer had said to him last week that the permit refusal had created “operational difficulties for his government” and told him to find a solution with government lawyers. </s> RIO DE JANEIRO (AP) — Brazil’s political crisis deepened sharply on Thursday with corruption allegations that threatened to topple the president, undermine reforms aimed at pulling the economy from recession and leave Latin America’s largest nation rudderless.

Stocks plunged, both chambers of Congress cancelled sessions and President Michel Temer’s office canceled his planned activities Thursday in the wake of a Globo newspaper report that he had been taped endorsing bribery of a former lawmaker.

Protests were planned in several cities and opposition politicians took to Twitter and local news channels to call for Temer to resign or be impeached, arguing his government no longer had legitimacy

“I can’t see how Temer survives this,” said David Fleischer, a political science professor at the University of Brasilia. “There are just too many people against him now.”

The country’s main Ibovespa stock index dropped 10 percent within 90 minutes of opening and trading was stopped for 30 minutes. Analysts predicted the Brazilian real would fall sharply against the U.S. dollar.

The scandal deepened at dawn Thursday as police searched the Rio de Janeiro home and Brasilia office of Sen. Aecio Neves, who nearly won the presidency in 2014 and planned to run again next year.

Neves is being investigated in several corruption cases related to the “Car Wash” probe into kickbacks to politicians. He has denied wrongdoing.

Late Wednesday, Globo reported that Neves had been recorded asking JBS meat-packing company executive Joesley Batista for $700,000 to pay for his “Car Wash” defense.

Neves’ whereabouts Thursday were not known. Attempts to reach him for comment were not successful.

Globo also reported that Batista had recorded Temer endorsing a bribe to silence former Speaker of the House Eduardo Cunha. In a statement late Wednesday, the president’s office said Temer did not participate or authorize any attempt to keep Cunha from reaching a plea bargain with Justice (officials).”

If confirmed, the tape could prove devastating for Temer, whose administration has lurched from one crisis to another since he took office just over a year ago.

Cunha led the impeachment fight that removed Dilma Rousseff from the presidency last year and put Temer, then the vice president, into power. Cunha was later imprisoned on a 15-year sentence for corruption.

The statement from Temer’s office confirmed that the president did meet with Batista in March. According to the Globo report, Batista secretly recorded the conversations with Temer and Neves and gave them to justice officials as part of plea bargain negotiations.

The report said that when Temer was told Cunha was being paid to keep silent, the president responded: “You have to keep that up, all right?”

Globo did not release the recordings or say how they were obtained.

JBS representatives did not respond to emails sent by The Associated Press seeking comment.

Temer and Cunha are members of the same party and were previously allies. However, they appear to have had a falling out amid a growing investigation into corruption involving the state oil giant Petrobras. Since launching three years ago, the “Car Wash” probe into billions of dollars in kickbacks has put several top businessmen and politicians in jail.

Many believe that Cunha, who was widely viewed as Brazil’s most powerful politician before being ensnared in several corruption cases, could provide damaging testimony about dozens of others if he reaches a plea bargain with investigators.

Soon after Wednesday’s report, both the Senate and Chamber of Deputies stopped sessions that included work on legislation that Temer’s administration is pushing in hopes of pulling Latin America’s largest economy out of its worst recession in decades.

“This climate isn’t one in which to work,” Rodrigo Maia, president of the lower chamber, told Globo News.

Globo’s reports are the latest in numerous scandals that have plagued Temer, whose approval ratings are hovering around 10 percent. In April, it came to light that eight of his Cabinet ministers were being investigated in cases related to bribery or accepting campaign donations from Brazilian constructor Odebrecht, one of the central companies in the kickback scheme at Petrobras.

The Eurasia risk consultancy said the new allegation threatens Temer.

If the allegations are proven true, “President Temer is unlikely to finish his term,” Eurasia wrote, adding that at the very least the matter will delay major reforms Temer is proposing. </s> Brasilia — Brazil’s Michel Temer hoped to save his presidency on Friday by persuading the corruption-riddled congress to back him, despite growing calls for his head in the country’s explosive new graft scandal.

His office said he would start the day by meeting his defence minister, Raul Jungmann, and military commanders at the presidential complex.

The agenda appeared to be designed to underline the centre-right president’s insistence on maintaining authority.

On Thursday, Temer emphatically refused to step down after the Supreme Court authorised an investigation against him.

He is accused of having given his blessing to payments meant to keep the former speaker of the lower house, Eduardo Cunha, from spilling secrets while he is in prison for taking millions of dollars in bribes.

The hush money allegations left Temer teetering barely a year after he took power in controversial circumstances, replacing his impeached predecessor, leftist president Dilma Rousseff.

He now faces eight impeachment demands filed in congress and a battle to maintain his ruling coalition. There were protests by several thousand people in Rio de Janeiro and the capital Brasilia that ended in clashes with riot police.

More anti-Temer protests were planned this weekend.

The Supreme Court, which deals with sitting politicians, rarely moves quickly on investigations and suspects often manage to string out their cases.

That leaves impeachment proceedings as the most likely avenue to remove Temer from power, just like a year ago when Rousseff was stripped of her office and Temer, her vice-president, automatically got the top job.

But for that to happen, Temer’s powerful ruling coalition in congress would have to turn on him.

"That’s why today the main question is to know whether the parties that form the government’s base will leave," said Thomaz Pereira, constitutional law professor at the Getulio Vargas Foundation in Rio.

The culture minister, Roberto Freire, resigned on Thursday and Brazil’s media was rife with reports of other ministers threatening to exit. Temer will try to stem the flow, especially with his PMDB party’s main partners, the PSDB.

Ironically, the legislature that now holds Temer’s fate in its hands is itself riddled with corruption scandals.

About two-thirds of legislators have had brushes with the law at some point. And a third of the senate is currently being investigated in the "Operation Car Wash" investigation that has uncovered massive bribery and embezzlement in Brazil’s elite — with Temer’s investigation being just the latest offshoot.

The scandal started with the revelation in O Globo newspaper on Wednesday that Temer had been secretly recorded while talking to Joesley Batista, an executive from the meatpacking giant JBS, on March 7.

On the tape, which was finally made public on Thursday, Batista told Temer that he was paying money every month to Cunha "to keep things under control". Temer replied: "You need to keep doing that, OK?" The conversation, which was provided to prosecutors as part of a plea bargain with Batista, is now in evidence with the Supreme Court. It has been interpreted as referring to bribes given to Cunha to make sure that he does not talk to prosecutors himself.

But in his statement on Thursday, Temer angrily responded: "I never bought anyone’s silence." He also told the nation that his work to push unpopular austerity reforms through congress was just starting to show positive results.

Temer highlighted signs this week that Brazil’s two-year recession was coming to an end and claimed that "optimism was returning". Now "those efforts may come to nothing", he warned.

Investors, who have been betting on Temer achieving his makeover of the battered economy, will be watching for more mayhem on the markets on Friday.

The Sao Paulo stock market reacted in panic on Thursday to the spectre of Brazil losing its second president in just more than 12 months, with trading suspended briefly after the Bovespa index crashed more than 10%. </s> CURITIBA, Brazil (Reuters) - Brazilian prosecutors charged ex-President Luiz Inacio Lula da Silva on Wednesday with being the “boss” of a vast corruption scheme at state oil company Petrobras, in a major blow to the leftist hero’s hopes of a political comeback.

Brazil's President Luiz Inacio Lula da Silva talks with his wife Marisa Leticia during a ceremony at Planalto Palace in Brasilia, June 26, 2007. REUTERS/Jamil Bittar/File Photo

It was the first time that Lula, still Brazil’s most popular politician despite corruption accusations against him and his Workers Party, was charged by federal prosecutors for involvement in the political kickbacks scheme at Petroleo Brasileiro (PETR4.SA), as the company is officially known.

Public Prosecutor Deltan Dallagnol told a news conference that Lula will be charged with corruption and money laundering for leading a kickback scheme that caused an estimated 42 billion reais ($12.6 billion) in losses to Petrobras shareholders and tax payers.

“He was the conductor of this criminal orchestra,” Dallagnol said during a detailed presentation of the investigation. “The Petrobras graft scheme aimed at keeping the Workers Party in power by criminal means.”

Lula’s lawyers said prosecutors lacked evidence to back up their accusations which were part of political persecution to stop him running in the 2018 election.

“This Lula-centered farce was trumped up as an affront to the democratic state and intelligence of Brazilian citizens,” one of Lula’s lawyers, Cristiano Zanin, told reporters in Sao Paulo.

Dallagnol stopped short of saying investigators would seek an arrest order for Lula, who became a hero to many poor Brazilians during his 2003-2010 government.

The two-year-old Operation Carwash anti-corruption investigation, based in the southern Brazilian city of Curitiba, has uncovered how political appointees named by Lula’s Workers Party and its allies handed overpriced contracts to engineering firms in return for illicit party funding and bribes.

The scandal helped topple the Workers Party from power last month by crushing the popularity of Lula’s chosen successor, Dilma Rousseff. She was impeached by Congress on unrelated charges of breaking budget rules, amid rising anger over her handling of Brazil’s worst recession since the 1930s.

Dallagnol said that Lula, because of his control of the machinery of the Workers Party and the Brazilian government, was the central figure in the scheme.

Prosecutors allege that the charismatic former union leader had personally received some 3.7 million reais ($1.11 million) in bribes, including a luxury apartment on the coast of Sao Paulo from one of the engineering and construction firms at the center of the bribery scandal, OAS.

Lula has denied ownership of the three-floor condo in Guarujá.

Related Coverage Brazil prosecutors say Lula was 'general' of vast Petrobras graft scheme

Lula’s case will go before crusading anti-corruption Judge Sergio Moro, who has jailed dozens of executives and others involved in the scheme.

Former first lady, Marisa Leticia Lula da Silva, has also been charged.

Lula has separately been indicted by a court in Brasilia for obstruction of justice in a case related to an attempt to persuade a defendant in the Petrobras scandal not to turn state’s witness.

BLOW TO LULA MYTH

Lula, 70, has not ruled out running again for president in 2018, but a criminal conviction would bar him from being a candidate for the next eight years.

His fall, as well as that of the leftist party he founded in 1980, has been dramatic.

A one-time shoeshine boy and union leader who led massive strikes against Brazil’s military dictatorship, contributing to its downfall, he was elected the nation’s first working class president in 2002 after three failed campaigns.

Wildly popular with Brazil’s poor, Lula’s social policies helped yank millions out of poverty and into the middle class, and he left office in 2010 with an 83-percent approval rating and an economy that grew at a blistering 7.5 percent.

But two years ago, as the Petrobras probe became public, prosecutors began to slowly put Lula in their crosshairs.

Many prosecutors and investigators say they cannot imagine such a powerful figure was unaware of the institutionalized corruption and political kickbacks taking place at Petrobras and other state-run companies.

Marcos Troyjo, a former Brazilian diplomat and co-director of Columbia University’s BRICLab in Rio de Janeiro, said he thinks Wednesday’s charges are the first of many Lula will be facing in the coming months.

“That means the Workers Party, which may have thought it would move comfortably into the opposition after Dilma’s impeachment, will confront extreme challenges,” said Troyjo. “It’s certainly the beginning of the end to Lula’s presidential aspirations for 2018.”

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Recent polls have shown that despite the investigations targeting Lula and the Workers Party, he would be a favorite to win the next presidential election.

“But these charges are likely too big a blow to the political myth of Lula, to the candidate Lula and to the Workers Party as a whole for that to happen,” Troyjo said.
Eduardo Cunha, former President of the Brazilian Chamber of Deputies loses his position as a Deputy following a vote of the Chamber as a result of a series of corruption scandals.