epa05326984 The interim president of Brazil, Michel Temer, said that if he is in charge its 'a result of Brazilian Constitution', during a meeting with ministers at Planalto Palace in Brasilia, Brasil, 24 May 2016. Temer added further that 'I want to refute those who say that there was a constitutional breakdown in Brazil, because that is not true, I am a result of the Constitution'. EPA/FERNANDO BIZERRA JR
Interim president of Brazil, Michel Temer © EPA

Michel Temer, Brazil’s interim president, went on the offensive on Thursday against allegations he solicited bribes, vowing he would not allow the claims to derail the reform agenda of his fledgling government.

The accusations that Mr Temer sought illicit funds for the election campaign of a political ally, Gabriel Chalita, for São Paulo mayor in 2012, were contained in a plea bargain by Sérgio Machado, the former head of Transpetro, a subsidiary of state-owned oil company Petrobras, released by the Supreme Court on Wednesday.

“Nothing will prevent us from continuing our work for Brazil and the Brazilian people,” Mr Temer told a press conference called to challenge the allegations. “When claims of this nature emerge, I will publicly contest them in the interests of maintaining harmony in our nation.”

The accusations come as Mr Temer and his centrist Brazilian Democratic Movement party, or PMDB, are seeking to consolidate support for the impeachment of Brazil’s elected president Dilma Rousseff. The leftist leader has been suspended for up to six months while the senate decides whether she is guilty of accusations of manipulating the budget.

Mr Temer, Ms Rousseff’s former vice-president who assumed power after the start of the impeachment procedure in mid-May, has been dogged by persistent corruption allegations against the PMDB, most of them stemming from Mr Machado’s plea bargain, which has only now officially been made public.

The allegations distracted domestic media coverage this week from what was arguably one of the government’s most important initiatives yet — the launch of a proposed constitutional amendment in congress to freeze public spending in real terms. Designed to deal with a ballooning budget deficit under Ms Rousseff, the amendment is aimed at rescuing the Brazilian state from the threat of eventual insolvency.

Mr Machado’s claims are the most direct yet against Mr Temer in a wider investigation into corruption at Petrobras, which prosecutors allege was used by politicians as a source of illegal campaign funding for elections.

The investigation at first targeted Ms Rousseff’s Workers’ party, or PT, but has inexorably moved to other parties, including the PMDB and increasingly, the centrist opposition party, the PSDB.

Under the allegations, which were reported in Brazilian media citing the legal documents released from the Supreme Court, Mr Temer directly requested R$1.5m from Mr Machado, then head of Transpetro, in a conversation that allegedly took place in an air force base.

The money was allegedly paid in the form of a legal donation from a construction company, which had contracts with Transpetro.

Mr Machado allegedly made clear to Mr Temer that while the money would be transferred in the form of a legal donation, it would come from illegal sources.

However, Mr Temer on Thursday denied ever receiving illicit donations and pointed to his government’s achievements in its first month in office, slashing government ministries and jobs and launching the budget reform.

Analysts at Eurasia Group, a risk consultancy, said the allegations were sufficiently vague as to avoid posing a serious threat to Mr Temer.

Seeking a campaign donation was not necessarily illegal and it seemed Mr Machado did not have proof this money had come from bribes or other illicit sources, Eurasia Group said.

“We remain sceptical that his plea bargain proves very damaging to Temer,” Eurasia Group said, adding that it seemed Mr Machado did not have a “smoking gun”.

Responding to allegations from Mr Machado in the same document that it also received bribes, the opposition PSDB said the claims were made by someone “desperate to free himself of responsibility for the crimes he committed”.

The allegations also provoked a rebuttal from the head of the senate, Renan Calheiros, one of the most senior politicians named by Mr Machado, who said all of his campaign donations had been legal.

Get alerts on Brazilian economy when a new story is published

Copyright The Financial Times Limited 2022. All rights reserved.
Reuse this content (opens in new window) CommentsJump to comments section

Follow the topics in this article