SAO PAULO/BRASILIA (Reuters) - Brazil’s top court released plea-bargain testimony on Friday accusing President Michel Temer and his two predecessors of receiving millions of dollars in bribes, the most damaging development yet in a historic political corruption probe.

Brazil's President Michel Temer reacts as he speaks at the Planalto Palace in Brasilia, Brazil, May 18, 2017. REUTERS/Ueslei Marcelino

The testimony made public by the Supreme Court is from executives of the world’s largest meatpacking company, and raises serious doubts about whether Temer can maintain his grip on the presidency.

The scandals that have engulfed Brazil’s political class and many business elites reduce the chances that Temer, a conservative who took office after leftist former President Dilma Rousseff was impeached last year, can push through economic reforms crucial for Latin America’s biggest country to recover from its worst recession on record.

The Supreme Court on Thursday said it approved an investigation of Temer for corruption and obstruction of justice. Calls for his resignation intensified, including an editorial in the O Globo newspaper, which is normally criticized by leftists for backing conservative politicians.

“This is easily the worst moment in Brazil since we returned to democracy,” said Claudio Couto, a political scientist at the Getulio Vargas Foundation, a top university, calling the claims “the mother of all plea bargains.”

“This testimony is hitting everyone, all the major political players and, most importantly, a sitting president,” he added.

The revelations came from testimony given by executives at JBS SA (JBSS3.SA). Once a small meat producer, JBS grew exponentially during 13 years of government by former President Luiz Inacio Lula da Silva and Rousseff’s Workers Party, primarily through acquisitions funded by low-cost loans from Brazil’s development bank.

The JBS executives said they made about 500 million reais ($154 million) in illegal payments to politicians and bureaucrats in recent years in exchange for winning contracts, getting easy credit from state-run banks and resolving tax and other disputes with the government.

Temer’s office denied in a statement that he obstructed justice by interfering in the probe and also denied accusations he took bribes. Lawyers for Lula said he was innocent. Rousseff denied any wrongdoing in a statement.

In addition to the three presidents, congressmen, ministers and several governors and mayors of major cities were named in the testimony. It implicates ruling and opposition parties alike.

According to the testimony, JBS paid Temer 15 million reais ($4.6 million) in bribes. It also alleges that Lula, who is already facing five corruption trials, received $50 million in bribes in offshore accounts from JBS, while Rousseff took $30 million in bribes, also in offshore accounts.

The corruption scandals that have polarized Brazil center on political kickbacks in exchange for firms winning contracts at state-run enterprises, especially at oil company Petrobras (PETR4.SA).

Related Coverage Brazil watchdog opens new probes into JBS-related insider trading

They have led to over 90 convictions of businessmen and politicians and prompted the investigation of dozens of sitting congressmen and a third of Temer’s cabinet.

Supreme Court Justice Edson Fachin wrote this week that an immediate investigation into Temer was required because the alleged criminal practices “are underway or about to occur.”

Temer on Thursday, in a terse address, said he would not resign from the presidency.

His defiance came as the Supreme Court released an audio tape of him speaking with JBS Chairman Joesley Batista.

In the recording, secretly made by Batista in a March visit to Temer, the president appeared to condone the payment of hush money to former lower house speaker Eduardo Cunha, who last year orchestrated Rousseff’s impeachment and was later convicted for corruption.

Many politicians fear that if Cunha should turn state’s witness, his testimony could implicate scores of congressmen and members of the executive branch.

The constant march of indictments and new scandals has led to near paralysis in Brasilia, the capital, and led to widespread calls among Brazilians for new elections.

But new elections would require a constitutional amendment.

If Temer resigns or is forced from office, the constitution at present says Congress must choose a caretaker president and vice president to govern until the next election, scheduled for late next year.

The JBS testimony also tainted one other prominent politician - Aecio Neves, a senator. Suspended from the chamber in the wake of the allegations, Neves led the chief opposition to Workers Party governments and placed a close second behind Rousseff in 2014 presidential elections.

Executives said JBS had paid Neves 80 million reais in illegal funding for that campaign as well as 2 million recently to support a new “abuse of authority” law that seeks to make it easier for suspects and defendants to sue investigators, prosecutors and judges.

The measure, which passed the Senate last month, must still be approved by the lower house. It has been sharply criticized by those leading Brazil’s crackdown on corruption.

Slideshow (8 Images)

Prosecutors wrote in the document released on Friday that they had proof Neves collaborated with Temer in attempts to slow or halt anti-corruption investigations.

($1 = 3.2560 reais) </s> SÃO PAULO, BRAZIL – The top federal prosecutor in Brazil, Rodrigo Janot, filed corruption charges against President Michel Temer with the country’s Supreme Court (STF) on Monday. This is the first time in history a sitting President has been charged with a crime in Brazil.

The charges are based on investigations linked to information given to officials by businessman Joesley Batista in his plea bargaining agreement. Also charged was President Temer’s close ally, Rodrigo Santos da Rocha Loures, who supposedly accepted R$500,000 in bribes from Batista in the name of President Temer.

“Between March and April 2017, with 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, through Rodrigo Santos da Rocha Loures, an undue advantage of R$500,000 offered by Joesley Batista, president of the company J & F Investimentos SA, whose payment was made by the executive of J & F Ricardo Saud,” says the charges presented by Janot.

The charges will now be sent to the Chamber of Deputies to be analyzed by the Lower House. If accusations are accepted by lawmakers, the process will return to the Supreme Court and President Temer will be suspended from office for up to 180 days, while the Court judges the case.

On Monday morning, before the charges were filed, President Temer gave a statement where he focused on reforms, stating that his administration’s proposed agenda is the most ambitious” of recent times. “There is no plan B. We have to move on, so nothing will destroy us, neither me nor my ministers,” he said.

Hours after the charges were filed, Brazil’s Federal Police sent the Supreme Court a final report on its investigations into the JBS allegations. In the document, the federal police say that President Michel Temer and former minister Geddel Vieira Lima tried to hinder investigations. </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 (Reuters) - Brazil’s top prosecutor on Friday charged six lawmakers from President Michel Temer’s Brazilian Democracy Movement Party (PMDB) with forming a criminal organization, the latest in a barrage of charges in the country’s sprawling corruption scandal.

FILE PHOTO - Brazil's President Michel Temer attends the 'Dialogue of Emerging Market and Developing Countries' on the sideline of the 2017 BRICS Summit in Xiamen, Fujian province, China, 05 September 2017.REUTERS/Wu Hong/Pool

Those accused by prosecutor Rodrigo Janot in a filing with the Supreme Court include former senator and president Jose Sarney, the government’s leader in the Senate Romero Juca and four other current senators.

A corruption scandal involving cartels of companies bribing officials for public contracts has enveloped most of Brazil’s political elite with Janot expected to issue another charge against Temer in coming weeks.

Temer defeated a first corruption charge from Janot, when the lower house of Congress voted not to allow it to proceed to trial.

Separately on Friday, the Supreme Court said it would consider next week requests from Temer that would block Janot from issuing further charges.

In the charges against the senators, Janot alleges the group unduly received 864 million reais ($279.84 million) and generated related losses of 5.5 billion reais for state-controlled oil firm Petrobras and 113 million reais for its subsidiary Transpetro.

Transpetro’s former president, Sergio Machado, was also charged.

The PMDB said in a statement that the prosecutor lacked evidence and that it trusted the Supreme Court would set the charges aside.

Juca said in a statement he believes the Supreme Court will seriously analyze the charges and he hopes for a speedy investigation.

A representative for Machado said he continues to collaborate with authorities, providing evidence of crimes involving politicians and Transpetro suppliers that resulted in several cases being filed.

Janot’s latest charges echo those against former presidents Luiz Inacio Lula da Silva, Dilma Rousseff and six other members of the Workers Party for criminal organization earlier this week. Lula and Rousseff deny the charges.

($1 = 3.0875 reais) </s> BRASILIA, May 20 (Reuters) - Brazilian President Michel Temer on Saturday angrily challenged a recorded conversation implicating him in a corruption probe, saying he would continue as president and ask the Supreme Court to verify the integrity of the recording.

"Brazil will not be derailed," he said during a speech at the presidential palace, reiterating that he would not resign despite an ongoing investigation by the Supreme Court into allegations he took bribes and condoned the payment of hush money to a jailed congressman.

Temer, visibly defiant, said he would ask the court to suspend an investigation against him until it could determine whether the recording, made by the chairman of meatpacker JBS SA during a March conversation, was edited afterwards.

The recording, which some local media have said shows signs of editing, is part of plea-bargain testimony by JBS executives that was disclosed this week.

The disclosure rattled Brazilian financial markets, cost Temer key congressional allies and led to widespread calls for his resignation. It also undermined efforts by Temer to pass economic reforms considered crucial to revive Brazil's economy after its worst recession on record.

The testimony, part of an ongoing string of major probes into corruption at the highest levels of Brazilian government and business, also claimed JBS paid millions in illegal campaign financing to Temer and his predecessors, leftists Dilma Rousseff and Luiz Inácio Lula da Silva.

In his speech Saturday, Temer lashed out at Joesley Batista, the JBS chairman, and other company executives, saying they were angry with his conservative government's austerity plans and efforts to curb the generous public financing of private companies that typified the administrations of his predecessors.

JBS, now the world's largest meat processor, grew rapidly through acquisitions during the Rousseff and Lula governments, mostly because of large, low-cost loans by the national development bank.

Calling their testimony "riddled with lies," Temer said there were inconsistencies in the JBS executives' statements to prosecutors. He also seized upon ongoing investigations by Brazil's securities regulator, known as the CVM, to question their motivations.

On Friday, the CVM said it was probing recent trades in stock and currency markets that earned JBS' controlling shareholders windfalls, even as they were giving plea testimony that would eventually affect the value of JBS stock and Brazil's currency, the real.

Joesley Batista, who was allowed to leave Brazil and return to a Manhattan apartment after his testimony, "speculated against the national currency," Temer said, yet was now "loose and free to walk the streets of New York." (Reporting by Lisandra Paraguassu; Writing by Paulo Prada; Editing by Mary Milliken) </s> In a fresh blow to the political stability in Brazil, which is going through its worst financial crisis, President Michel Temer has been charged over an alleged multi-million bribery scandal by the country's chief prosecutor.

Temer was elected to the office about a year ago to replace former president Dilma Rousseff, who was impeached after being indicted in the country's biggest graft scam centring around the Petrobras oil company.

On Monday (26 June), top federal prosecutor Rodrigo Janot charged the president for receiving a total of 38m Brazilian reais (£9m, $11.5m) as bribe from meatpacking company JBS SA. He allegedly took the bribes for resolving tax matters, freeing up loans from state-run banks and other matters.

Janot, while submitting the documents to the Supreme Court, accused Temer of fooling the citizens by accepting the bribes.

Temer's office and his attorney, Antonio Mariz, reportedly declined to comment on the charges. The president, however, has maintained that he is innocent, Reuters reported.

Brazil's federal police released a separate document on Monday containing a conversation between Temer and Joesley Batista, one of the brothers who control JBS. The audio recording from March reportedly showed the president discussing bribing a potential witness.

In another part of the recording, Temer is heard telling Batista that it was mainly because of his influence that he appointed Henrique Meirelles as finance minister in his cabinet.

Apart from Temer, one-third of his cabinet and four former presidents in the country have already been indicted or charged in different graft cases. Lawmakers from other parties are also accused of involvement, with over 90 high-profile people already convicted in the past few years.

Temer's popularity in the country has been on the decline since graft allegations began surfacing against him soon after he took over the president's office in August 2016.

Meanwhile, in accordance with Brazilian law, the lower house of Congress will now vote on whether to allow the Supreme Court to try Temer in the graft case.

His supporters from the coalition government are confident they have the two-third majority required in the parliament to block a trial. However, if voting is conducted several times as the president is expected to soon face charges of racketeering and obstruction of justice that require separate voting, support may wane out, they warned. </s> Brazil's top federal prosecutor charged President Michel Temer on Monday with accepting bribes, the first of what is expected to be a series of graft allegations against the deeply unpopular leader in the coming weeks.

BRASILIA: Brazil's top federal prosecutor charged President Michel Temer on Monday with accepting bribes, the first of what is expected to be a series of formal graft charges against the deeply unpopular leader in the coming weeks.

Prosecutor-General Rodrigo Janot delivered the charges to the Supreme Court, marking a stinging blow to Temer and the first time the public prosecutor has presented charges against a sitting Brazilian president.

Under Brazilian law, the lower house of Congress must now vote on whether to allow the tribunal to try the conservative leader, who replaced impeached leftist President Dilma Rousseff just last year.

Lawmakers within Temer's coalition are confident they have the votes to block the two-third majority required to proceed with a trial. But they warn that support may wane if congressmen are forced to vote several times to protect Temer - whose popularity is languishing in single-digits - from trial.

Temer's office and his attorney, Antonio Mariz, did not respond to requests for comment. Temer has repeatedly said he is innocent of any wrongdoing.

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 US$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).

For more than three years, investigators in Brazil have uncovered stunning levels of corruption enveloping the political class and business elites. Much of it centred on companies paying billions of dollars in bribes to politicians and executives at state-run enterprises for lucrative contracts.

Temer and one-third of his cabinet, as well as four former presidents and dozens of lawmakers are under investigation or already charged in the schemes.

The scandals reduce the chances that Temer can push through reforms crucial for Latin America's biggest economy to rebound from its worst recession on record.

Key lawmakers in Temer's alliance told Reuters, on condition of anonymity, they will halt work on proposed labour reforms if forced to vote on charges against the president.

Temer's supporters say they have between 250 and 300 votes in the 513 seat lower house to block a trial. But the president is expected to soon face charges of racketeering and obstruction of justice, each requiring a separate vote.

On Monday, the federal police recommended charging Temer with obstruction of justice - the first step towards a new round of charges. </s> BRASILIA: Brazil's top prosecutor on Friday charged six lawmakers from President Michel Temer's Brazilian Democracy Movement Party (PMDB) with forming a criminal organization, the latest in a barrage of charges in Brazil's sprawling corruption scandal.

Those accused by Rodrigo Janot in a filing with the Supreme Court include former senator and president Jose Sarney, the government's leader in the senate Romero Juca and four other current senators.

A corruption scandal involving cartels of companies bribing officials for public contracts has enveloped most of Brazil's political elite with Janot expected to issue another charge against Temer in coming weeks.

Temer defeated a first corruption charge from Janot, when the lower house of Congress voted not to allow it to proceed to trial.

Separately on Friday, the Supreme Court said it would consider next week requests from Temer that would block Janot from issuing further charges.

In the charges against the senators, Janot alleges the group unduly received 864 million reais (US$279.84 million) and generated related losses of 5.5 billion reais for state-controlled oil firm Petrobras and 113 million reais for its subsidiary Transpetro.

Transpetro's former president, Sergio Machado, was also charged.

The PMDB said in a statement that the prosecutor lacked evidence and that it trusted the Supreme Court would set the charges aside.

Juca said in a statement he believes the Supreme Court will seriously analyze the charges and he hopes for a speedy investigation.

Janot's latest charges echo those against former presidents Luiz Inacio Lula da Silva, Dilma Rousseff and six other members of the Workers Party for criminal organization earlier this week. Lula and Rousseff deny the charges. </s> A Brazilian Supreme Court justice sent a corruption charge against President Michel Temer to Congress on Wednesday, advancing the process under which the center-right leader could be removed from office to face trial for graft.

The justice, Edson Fachin, rejected an argument made by Brazil’s top federal prosecutor that the Supreme Court should hear preliminary arguments on the charge and its merits for 15 days, before deciding whether to send it to the lower house of Congress.

Under Brazilian law, it is now up to the House of Deputies to decide whether to allow the Supreme Court to try Temer, who replaced impeached leftist President Dilma Rousseff last year. Two-thirds of the lower house must vote against Temer for his trial to occur.

The president was charged this week with arranging to receive 38 million reais ($11.55-million) in bribes from executives at JBS SA, the world’s largest meat processor.

Temer branded the charge a “fiction” in a nationally televised address on Tuesday, even as he acknowledged that it could hurt the economy and hamper his government’s plans for far-reaching reforms to help lift Latin America’s biggest country out of a historic recession.

The Brazilian leader has repeatedly said he is innocent of any wrongdoing and has rejected calls from the opposition to resign.. He is caught up in a three-year anti-graft push by investigators that has revealed stunning levels of corruption in Latin America’s largest country.

The schemes involve businesses paying billions of dollars in bribes to politicians and executives at state-run companies in return for winning contracts and various political favors.

Temer, one-third of his cabinet, four past presidents and dozens of lawmakers are either on trial, facing charges or under investigation for corruption. Over 90 people have been found guilty so far.

More corruption charges are expected to be made against Temer by Prosecutor General Rodrigo Janot in the coming weeks. Each of those charges will require a vote by the full lower house on whether or not the president should face trial.

A vote on the first charge against Temer is expected to take place in three to four weeks.

If less than two-thirds of the house were to vote against the charge, it would be shelved. If two-thirds approved it, it would then go back to the Supreme Court, to decide whether it will take up the case.

Temer would immediately be suspended from office for 180 days if the court accepts the case, during which time House Speaker Rodrigo Maia would take the presidency.

Were Temer to be found guilty, Congress would appoint a caretaker president to serve out his term, which ends on Jan. 1, 2019.
The Brazilian Supreme Federal Court releases a plea bargain testimony from JBS S.A., revealing that the company paid 500 million reais in bribes to politicians, including current President Michel Temer and his predecessors Dilma and Lula.