Brazil’s Temer Urges Business as Usual After Massive Bribery Probe

Brazil’s President Michel Temer urged lawmakers to carry on with business as usual on Wednesday, a day after a Supreme Court justice ordered corruption probes into nearly 100 politicians, including leading lawmakers and a third of his cabinet.

Temer avoided commenting directly on the unprecedented wave of investigations triggered by plea bargain testimony from executives at engineering group Odebrecht, but he made clear the government was committed to passing its ambitious reform agenda.

“We can never paralyze the government,” Temer said at an event in the capital Brasilia. “If we aren’t careful, it will seem Brazil’s institutions don’t work, which is not the case.”

The investigation of eight government ministers, the heads of both chambers of Congress and dozens of senior lawmakers is the greatest challenge to date for Temer, an unpopular president struggling to stabilize Brazil’s debt and end a deep recession.

Yet analysts at political consultancy Eurasia Group said on Wednesday that the probes were likely to delay rather than derail Temer’s pension reform, a cornerstone of the program he is pushing through Congress to shore up government accounts.

Brazil’s benchmark Bovespa stock index slipped just 0.5 percent in Wednesday trading, while the local currency was little changed against the U.S. dollar after the Supreme Court released the long-awaited list of new cases.

After more than three years of mounting corruption probes into political kickbacks for contracts at state-run companies, police and prosecutors have jailed dozens of business leaders and convinced many to provide evidence against elected allies.

The probes threaten several of Temer’s closest confidants, including chief of staff Eliseu Padilha, who has played a key role in pushing unpopular austerity measures through Congress.

The president has said he will suspend any ministers charged with corruption, but it may take months before prosecutors bring charges, given the stack of new cases landing on their desks.

Temer’s ministers of foreign affairs, trade and agriculture also are under investigation, as well as former presidents Fernando Henrique Cardoso, Luiz Inacio Lula da Silva and Dilma Rousseff. All of those under investigation have denied wrongdoing.

With the biggest names in Brazilian politics under the cloud of the widening corruption scandal, major parties may be left with few untarnished names for the 2018 presidential election, raising the odds of a successful run by an outsider candidate.

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