Brazil’s embattled president is still not in the clear

Businessman Joesley Batista implicated Brazil's President Michel Temer
A taped conversation with businessman Joesley Batista (L) may have scuttled Brazilian President Michel Temer’s prospects for pushing through fiscal reforms (source: dpa)

Brazil’s President Michel Temer survived in office earlier this month against all odds, when the lower house of Congress voted 263-227 to reject a corruption indictment filed against him by the country’s top prosecutor.

The charges were based on the results of a police sting operation that planted a recording device on Joesley Batista, co-owner of the world’s largest meatpacker JBS S.A., to register a conversation with President Temer late in the evening of May 17. Portions of the recording leaked to the press and were broadcast on national television, rattling the government like a bomb blast.

The aftershocks were still rumbling three weeks later, when the Superior Electoral Court, in a 4-3 vote, cleared Mr. Temer of charges that he had engaged in illegal campaign financing during the 2016 presidential election. He was then the running mate of President Dilma Rousseff (2011-2016), whom he succeeded as president in August 2016 after she was impeached and removed from office by the Senate.

Smooth operator

President Temer has never been popular, but his approval ratings have plunged since the recorded conversation with Mr. Batista was released. According to the latest national poll, only 5 percent of Brazilians say he is doing a good job.

However, Mr. Temer has not lost his sure touch in Congress, where he spent three decades collecting a formidable array of allies and contacts. After talking personally to almost every lawmaker in the house and freeing up large amounts of federal funding for their pet projects, he easily secured far more than the one-third of Congress (or 157 votes) needed to reject the indictment.

Even so, support for the president was well below what he had been receiving in key votes to pass the reform legislation that had given his government a measure of credibility – at least among the business community.

The public spending President Temer promised lawmakers to quash the indictment could imperil the fiscal adjustment that was his main asset

Most of those reforms involve amendments to Brazil’s constitution, which automatically require a two-thirds majority to pass. The most crucial of these reforms – on pensions – had been scheduled for passage in May, before it was derailed by the eavesdropping scandal.

If the president does not deliver on his legislative package, his already slender ability to govern will be much diminished. Most likely, Mr. Temer will end up serving as a lame duck for the rest of his term, which expires in December 2018.

The public spending President Temer has already promised lawmakers in exchange for their votes to quash the indictment, on top of additional outlays calculated to appease public opinion and improve his image, could very well imperil the fiscal adjustment that has been his single biggest asset with Brazil’s business community.

And Mr. Temer is not out of the woods yet. A further threat comes from the country’s outgoing Attorney General, Rodrigo Janot, who is expected to file at least one more indictment against the president for obstruction of justice, and perhaps another one for racketeering as well, before his term expires on September 17. Each indictment would require the president to collect another 157 votes in the House to survive.

The next few weeks and months promise to be tough for Mr. Temer and the prospects for fiscal reform in Brazil.

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