Deja Vu
Another Impeachment Scandal in Brazil?

Talk of impeachment is sweeping Brazil once more, as an explosive bribery allegation threatens to bring down President Michel Temer. The Wall Street Journal has the background:

A leading newspaper, O Globo, reported Wednesday that prosecutors had recordings of Mr. Temer purportedly encouraging payments allegedly intended to silence former speaker of the House Eduardo Cunha, who was jailed in October awaiting trial on charges of corruption and money laundering.

The recordings were made by Joesley Batista, the chairman of meatpacker JBS SA, as part of a plea deal with prosecutors, according to O Globo. […]

The alleged payments supposedly made by Mr. Batista were meant to keep Mr. Cunha from cutting a plea deal in which he potentially could reveal incriminating information about Mr. Temer, according to O Globo. […]

An official impeachment request was filed Wednesday in the Lower House by opposition party Rede after the news broke. Opposition politicians including Sen. Lindbergh Farias and Sen. Vanessa Grazziotin have called for Mr. Temer’s resignation or impeachment, and Podemos, a party formerly allied to Mr. Temer, announced its break with the government.

So far, Temer has denied the allegations that he paid hush money to his former ally, and is rejecting widespread calls for his resignation. But the markets have been much less sanguine about his future: the Ibovespa stock index dropped 10 percent in morning trading, and the Brazilian real has declined by 7 percent against the dollar since the Globo‘s report dropped. With allies abandoning the president, protesters taking to the streets, and a potential leadership crisis looming, Temer’s already unpopular economic reform agenda is almost surely dead in the water.

Sadly, this kind of thing has become par for the course in Brazil. Temer, after all, only attained office after last year’s impeachment of his leftist rival Dilma Rousseff, and fallout from the “Car Wash” corruption scandal that led to her downfall has continued to plague many in Temer’s own government. Nor does the immediate future hold much hope that Brazil’s political rot can be speedily cleaned up: if Temer goes, the next in the line of succession is the speaker of the lower house of Congress, Rodrigo Maia, who is himself under investigation for graft.

With both Brazil and Venezuela mired in political and economic crisis, Latin America is in a sorry state these days—and the turmoil shows no signs of abating any time soon.

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