Temer insists on innocence (May 19, 2017)

Brazil's Supreme Court approved an investigation into allegations that President Michel Temer encouraged a business executive to pay a jailed-former ally hush money. Temer insisted yesterday that he was innocent and refused to resign. Opponents called for impeachment and financial markets plunged, reports the Wall Street Journal.

The authorization of a Supreme Court investigation comes a day after O Globo ran an explosive story that JBS executives presented plea-bargain testimony implicating Temer. (See yesterday's post.) The court released the audio of the recording, in which Temer allegedly pushes Joesley Batista to maintain payments to former House speaker Eduardo Cunha. The payments could be aimed at keeping Cunha from reaching a plea bargain himself and implicating Temer or close associates, according to speculation.

However some observers, including Folha de S. Paulo found the tape to be inconclusive, noting inaudible stretches in the recording and a lack of clarity in the part of the dialogue dedicated to Cunha. (The piece has a transcription of the auido.) The WSJ also says the recording doesn't really show Temer approving bribe payments, it does not that "Temer can be heard murmuring expressions of solidarity throughout the recording, even as Mr. Batista describes things like obtaining confidential information about the investigation from a federal prosecutor."

In a televised speech yesterday Temer was defiant and appeared under stress, according to the New York Times. He emphasized the risk to his economic platform, aimed at getting Brazil out of a long recession. He also demanded a rapid investigation, reports the Financial Times.

Politicians across the spectrum called for his resignation yesterday. This marks a whole new turning point in Brazilian politics -- which in recent years has been defined by corruption scandals, amid the ever-growing Operation Car Wash investigation into graft at state-owned oil company Petrobras that has implicated dozens of prominent politicians from all major parties.

Impeachment -- it would be the second in two years -- is unlikely for now as Temer's coalition enjoys a large congressional majority, according to the Guardian. But there is intense pressure on him to step down, and already one party -- with 13 deputies -- has announced it's withdrawal from the coalition.

If Temer is ousted, he would be succeeded by House speaker Rodrigo Maia, himself facing corruption inquiries. But Maia could only hold the post for a month, after which Congress would elect a new president to serve the remainder of Mr. Temer’s term, through 2018, explains the NYT. Analysts say Congress would likely lean towards another reform-minded leader, according to the WSJ.

So many lawmakers are implicated in the corruption scandal however, that some factions are pushing to elevate chief justice Carmém Lúcia to the presidency because a majority of congressmen are implicated in the corruption scandal, reports the Guardian.

However, there are also calls for simply having new elections -- though that would require Congress to pass a constitutional amendment. (Presidential elections are scheduled for October, 2018.)

In the meantime, the scandal will likely affect Temer's ability to push through unpopular reforms aimed at jumpstarting the economy. Already the Podemos Party, with 13 deputies, announced it would be leaving the governing coalition.

The reforms the Temer administration is focused on include a wildly unpopular pension reform bill -- aimed at reducing public debt -- and loosening labor regulations, in order to entice investment. Though they lack public backing, the proposals "have helped to restore confidence to an economy that remains mired in its worst-ever recession," argues the Economist. "The Globo revelations will delay the reforms, if they do not stop them altogether."

The plea bargain reached between prosecutors and seven executives of JBS and J&F Investments, involves paying fines of R$225m, reports the Financial Times. (The piece includes interesting background on the meatpacking giant "one of the most important Brazilian companies most people have never heard of.") Their revelations  this week have had other prominent targets: Senator Aécio Neves, runner-up in the 2014 presidential race, allegedly figures asking for about $600,000 in bribes to pay for legal fees. He was suspended from the Senate yesterday by a Supreme Court magistrate. Neves’s sister, who worked with him on the 2014 campaign, was detained yesterday.

Congressman Rocha Loures -- a Temer confidant -- was also removed from office yesterday following reports that he negotiated bribes worth 500,000 reais a week for 20 years from JBS, notes the Guardian.

The new focus on the inquiries on parties other than the Workers' Party could raise perceptions of the judiciary as impartial -- even as it finishes torpedoing most political parties' legitimacy, according to the Guardian.

The impact of the latest scandal has been such that satirical website Sencionalista said it followed the "Netflix model" of releasing an entire season of episodes at once. "The acclaimed series "Brasil", available in all media since June 2013, has been a time of doubt before the debut of the new season. ... What the fans did not expect was that the new season would be released so fast and with all the episodes at once. Focused on President Temer and Senator Aécio Neves, the season was released early yesterday with all the chapters."

News Briefs

• The U.S. government announced announced sanctions against eight members of Venezuela’s Supreme Court. The administration said the measures, which freeze any assets they hold in the U.S. as well as bar U.S. citizens from doing business with them, are intended to pressure the court to stop its efforts to obstruct the National Assembly, reports the New York Times.

• Venezuelan opposition leader Henrique Capriles said he was barred from leaving the country yesterday. Authorities seized his passport while en route to the United Nations to denounce government rights abuses, reports the Wall Street Journal. He said he would return to street protests in Caracas. U.N. High Commissionerfor Human Rights Zeid Ra’ad Al Hussein said he hoped the passport revocation was not a "reprisal" linked to his scheduled meeting with Capriles today, reports the Miami Herald.

• Colombian President Juan Manuel Santos met with Trump yesterday in Washington. The Colombian leader was seeking assurances that millions of dollars of aid for the peace process will continue, reports the Los Angeles Times. But Trump did not publicly commit, though he praised Santos' efforts to make peace. Instead Trump focused on fighting drug trafficking and on potential trade deals, as well as the wall he has promised to build along the border with Mexico, according to the LA Times. Santos spoke of Colombia's post-war reconstruction needs. The meeting shows that the relationship between the two countries has changed significantly under Trump and indicates a more difficult situation for the peace agreements, according to la Silla Vacía. U.S. funding is likely to hinge on Colombia focusing on combatting illicit coca cultivation, cracking down on transnational crime and creating a credible transitional justice system, according to experts cited in the piece.

• "The agreement sets out to bridge the historic divide between the Colombia of developed urban centers and that of the vast, impoverished interior, where historically there has been little or no government presence and, as a result, limited security, weak rule of law and deficient health care and education," writes Santos in a New York Times op-ed. "To close this gap, my government has committed itself to a far-reaching program of rural development for the largely low-income population, including land, titles, credit, roads and crop substitution programs."

• A key deadline for the implementation of Colombia's peace plan with the FARC is fast approaching: D-180 at the end of May. It's the six-month mark at which the approximately 7,000 demobilized FARC fighters should be disarmed and certified as civilians, that is to say, free to leave the camps they've concentrated in as part of the process. This is unlikely to happen in time -- FARC guerrillas are reluctant to hand over their weapons until the government follows through with certain provisions of the agreement. Nonetheless, both sides appear committed to continuing the process and to not allow delays to impact the implementation, reports the Economist.

• Silla Vacía reviews how Congress is passing the laws that enact various parts of the agreements, noting that many have scraped through.

• On the issue of U.S. aid -- WOLA launched the "Central America Monitor," aimed at following U.S funded assistance programs that aim to reduce violence, strengthen law enforcement and the rule of law, combat corruption; and evaluating the progress that Central America is making in the fields of transparency, corruption, violence reduction, and justice and security reform through the use of a series of indicators. "In 2015, the U.S. Congress approved a US$750 million aid package to implement a new multi-year strategy of engagement with Central America designed to help address the underlying conditions driving Central Americans to leave their countries. While former assistance to the region focuses primarily on strengthening security, the aid package recognizes, in principle, the need to reduce violence, strengthen institutions, combat corruption, and expand economic opportunities. The aid package includes a set of requirements for recipient countries concerning improvements in accountability and transparency, reforms of public institutions, anti-corruption, human rights, and participation, which the countries must meet in order to obtain the aid. The requirements are important and reflect a belief that international assistance will not make a difference unless these countries demonstrate a firm commitment to strengthening the rule of law, tackling corruption, and to addressing poverty and inequality. The majority of the assistance began to make its way to the region in early 2017, and in May the U.S. Congress approved another $655 million."

• The White House formally notified Congress that it will aims to renegotiate the NAFTA, but gave no details of what sort of changes it will seek, reports the New York Times. On the campaign trail last year Trump threatened to tear up the deal altogether, but in April agreed with his Mexican and Canadian counterparts to a renegotiation instead. (See April 27's briefs and April 28's post.) The short letter sent to Congress yesterday by Robert Lighthizer, the newly confirmed United States trade representative, differs drastically from an eight-page draft that circulated in March, which would have allowed for tariffs if a flood of imports threaten a local industry and changed the agreement’s rules of origin, notes the NYT. (See March 27's post.)

• A growing number of U.S. companies are avoiding ad-campaigns targeting latino consumers, for fear of angering Trump followers, reports the Financial Times.

• Most aggressions against journalists in Mexico come from public servants, according to government statistics, reports Animal Político. (See Tuesday's post.)

• The only way to save the critically endangered vaquita porpoise in Mexico is a total ban on gillnet fishing in the Gulf of California, enforcement against illegal fishing, and the development of alternate fishing techniques, according to a new World Wildlife Fund report. The porpoise could be extinct by next year if not, reports Animal Político.

• More people have died attempting to illegally cross the Mexico-U.S. border in the past 16 years than the total victims of the Sept. 11 terrorist attacks. According to Border Patrol, the number is 6,023 deaths. The time has come to honor them with a cenotaph on the Washington Mall, argues Ilan Stavans in a New York Times op-ed. A way of "immortalizing the fornteir victims through which we not only return their lost identity, but also the place they deserve in our national mythology. Along with them are the Cuban balseros who died in the Florida Straights. Or the Puerto Ricans who succumbed during the odyssey from the Caribbean island to Manhattan during the 'great migration' of the 50s."